University of Illinois Extension

Saving and Investing in Turbulent Times


Review your net worth statement to see what cash assets you could draw on in an emergency, how much money is in investments that have restrictions on accessing their value (such as retirement accounts, a business, or real estate), and how your assets compare to your debts.

Compare your current asset allocation with allocations suggested for your situation or risk tolerance. Creating these suggested allocations is not an exact science, so try a couple of different versions to see the range of recommendations you get. You might start by comparing your results from these two online tools with your current asset allocation:

Conservative portfolios (lower risk) have more money in cash and bonds. Aggressive portfolios (higher risk) have a greater proportion in stocks, especially small cap stocks or emerging foreign markets. Conservative portfolios expect a lower return. They also have less risk of loss and experience less fluctuation in value, compared to aggressive portfolios. If you invest conservatively, you will have to save more to reach your goals. If you invest aggressively, the value of your investments will fluctuate, and there is a chance you could lose money. 

In general, the sooner you will need your money, the more conservatively you should invest. The longer it will be before you need your money, the more aggressively you can invest. The value of stocks is unpredictable in the short term. Over longer periods of time (i.e, 5, 10 or 20 years), stocks have historically given better returns than bonds or cash.

You may decide that your current asset allocation is too risky or too conservative for your situation. The process of bringing your allocation back to the desired percentages is known as rebalancing. It can be accomplished by buying and selling existing investments, directing new money into underweighted asset classes, or selling investments in an overweighted asset class to generate income.

Your asset allocation will show you whether you’re appropriately diversified across asset classes. But also check to see that you don’t have more than five to 10 percent of your money invested in any single company – including your employer, and that your investments are not overly concentrated in any single industry.

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