Matching investments to your situation

When should you consider having a larger portion of your portfolio in stocks, bonds or cash?

Consider stocks when:

  • You have a relatively long investment time frame — 5 to 10 years or longer.
  • You want the potential to make substantial returns on your investments to reach your goals.
  • You have the risk tolerance to handle major ups and downs in the market.

Consider bonds when:

  • Your goal is to preserve your assets.
  • You have a mid- to long-term investment timeframe.
  • You can withstand some fluctuation in asset values on the way to achieving your goals.
  • You need an income stream from your investments.

Consider cash when:

  • You don’t mind a minimal return on your money.
  • You may need to access a significant portion of your money in the near term.

Note: A savings account or a certificate of deposit (CD), may be better suited to meet a short-term goal (buying a car), while stocks, bonds, and mutual funds are best for long-term planning and saving (retirement).

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