Portfolio Investor Questions

portfolioLike many other financial questions, the answer to how many investments you need in your portfolio is, ?It depends.? The solution is contingent on several different things including the type of account you?re working with, the amount of money you have, and the time you?re willing to commit to it. As a result, the right number of investments may range anywhere between one investment and forty.

For those just starting out and with $10,000 or less in their retirement plan, one asset allocation fund may serve as the ideal scenario. Asset allocation or target date funds offer investors the opportunity to focus on establishing the habit of saving and investing early on while also providing the necessary asset allocation to hit the major asset classes including large-cap, mid-cap, small-cap, and international options as well as fixed income or bonds.

As investors accumulate more funds and seek greater returns, more income, or access to alternative options, the number of investments that can make sense in your portfolio jumps from one to twelve. Now twelve isn?t a definitive number, but a dozen different funds is a useful number that?s easy to remember and perceive in a portfolio. Once again, this number allows investors to hit the major asset classes as well as tilt their portfolio to meet their life stage or personal preferences. Filling twelve spots means an investor can not only hit the popular equity asset classes such as large-cap, mid-cap, small-cap, and international but also for them to decide whether they want those areas to be growth or value focused. Additionally, the number allows access to lesser known areas such as emerging markets, specialized funds that target areas such as health care or technology, and even real estate or gold.

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