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How your clients allocate their money among equities, fixed-income investments and short-term reserves is an important factor in determining the long-term return and volatility of their portfolios. You can advise them on the importance of selecting specific investments only after you've helped them decide on the right asset mix.

To see Vanguard's sample asset allocations, have your clients answer the questions that follow with a specific long-term goal in mind, such as retirement. Don't use this questionnaire for short-term goals that require clients to spend all the available money within the next two years. Your clients can fill it out as many times as they like, with a different goal and asset allocation in mind each time.

This questionnaire and the sample asset allocations are designed to help investors think about allocating their assets among different classes (stocks and bonds) for different goals. The sample allocations provided are based on generally accepted investment principles. Of course, there is no guarantee that any particular asset allocation will meet clients' investment objectives or goals. All investments involve risks, and fluctuations in the financial markets and other factors may cause declines in the value of an investor's account.

Please read the Limitations found below. This questionnaire and the sample asset allocations do not provide investment or financial advice. The sample asset allocations presented are not tailored to any particular investor's circumstances. Investors should speak with a financial advisor for help in selecting an appropriate asset allocation for their particular circumstances and carefully consider all options before investing.

 

Your suggested mix

Asset Allocation Chart

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Important information

Limitations

As you use the questionnaire, keep the following limitations in mind:

The sample asset allocations within the questionnaire depend on subjective factors such as your risk tolerance and financial situation. For this reason, you should view them only as broad, sample illustrations for how you might consider investing your savings. It's important to review historical returns of short-term investments, bonds and stocks carefully over various holding periods to see if you can accept the level of risk in a given investment mix.

The asset allocations are limited to two broad classes of investments: equities and fixed income. They don't include other assets, such as real estate, personal property or precious metals.

Any modifications to your current mix of investments should be made gradually to lessen the impact of significant market changes and potential tax effects.

The investor questionnaire is intended to help you think about your savings and investment program. It is not investment advice and should not be considered the sole or primary basis on which you make investment decisions. Contact your financial advisor or broker before making an investment.

Your financial projections greatly depend on your assumptions, especially for inflation rate, investment expenses, taxes and investment return. It's difficult to forecast such rates and returns accurately, especially over long periods. Therefore, it's critical that you update your projections periodically to accommodate any changes in your assumptions.

The longer your time horizon, the more likely any change in your assumptions will have a significant impact on your results. Even small changes can lead to substantial variations in results over time. A 1% change in your investment return can have a significant impact on your ability to meet your retirement goals over the long term.

Financial projections aren't mistake-proof and can't ensure specific future results. Changes in tax or benefit laws, investment markets, or your own financial situation can cause actual results to deviate substantially from your projection. To address this uncertainty, you should create several scenarios, with various sets of assumptions, to evaluate a wide range of possible outcomes.