As I began writing the How to Make the Most of Morningstar series, it occurred to me that one of the biggest reasons to use Morningstar for investing in mutual funds is to build a diversified investment portfolio through proper asset allocation. So to put into better perspective the tools at Morningstar, this series looks at asset allocation and picking mutual funds.
I’ll try to keep each post short so you can read it in just a few minutes. I’ll also link to posts from other sources and books that are relevant to each topic. Throughout this series, it is important to keep three things in mind:
- Asset Allocation and Picking Mutual Funds is Easy: You can build a diversified investment portfolio with just a couple of mutual funds, and you don’t need to know the difference between a value and growth fund, what an emerging market is, or what REIT means. We will look at all of these things, and more, but if your eyes glaze over when we start talking about an actively managed micro cap value fund, don’t sweat it. We will cover the easy way to build a diversified portfolio.
- Asset Allocation is Not an Exact Science: There is no one right asset allocation. There are some general guidelines that most investing professionals agree on, but within those guidelines, there are a lot of sound options. We’ll discuss those options throughout this series.
- I am Not an Investment Professional: I’ve read and studied a lot on asset allocation and invested for about 15 years, but I am NOT an investment professional, nor am I providing investment advice. You need to make your own decisions, and if you want investment advice, seek guidance from a professional.
With that said, here is the Table of Contents for this series:
- Stocks vs Bonds
- Large Cap v. Mid Cap v. Small Cap Funds
- Value v. Growth Funds
- Foreign v. Domestic Funds
- Emerging Market funds
- REIT funds
- Index v. Actively Managed funds
- Asset Allocation in Action: Why Bother?
- Allocating Between Stock and Bond funds
- Allocating Between Domestic and International funds
- Allocating Between Large and Small Cap funds
- Allocating Between Value and Growth funds
- Allocation and REIT funds
- Allocation and Emerging Market funds
- Asset Allocation for Generation X (20s & 30s)
- Asset Allocation for Mid-Lifers (40s & 50s)
- Asset Allocation for New Retirees
- Target Date Funds
Asset Allocation in Action
Putting it All Together
As each article is posted, I’ll link it back to this Table of Contents, so you can easily jump to any topic. I hope this series will prove helpful to you, and if there is some asset allocation topic of interest to you that I don’t cover, please let me know.
Published or updated March 30, 2012.