You've heard the saying, "don’t put all your eggs in one basket." Well, that sums up asset allocation. It is the process of diversifying your money among different types of asset classes such as stocks, bonds, real estate and cash. Asset allocation is one of the most basic principles of investing. While it cannot guarantee positive performance, it does help you balance risk and reward, diversify your holdings, and plan for the long term.

The Morningstar Asset Allocator

The Morningstar Asset Allocator from Morningstar Associates, LLC (Morningstar), is a free portfolio-planning tool designed to help you build a mix of investments to match your personal goals and risk tolerance. It recommends the balance of investment categories that, based on historical performance, will provide you with the highest expected returns given the amount of risk you're willing to accept.

Grounded in sound statistical research and seasoned judgment, this compact and simple portfolio-planning tool can make it easier to choose from our large selection of investment options. Using our tool you can:

• formalize your retirement goals,
• formulate reasonable expectations and time horizons, and
• evaluate your short- and long-term attitudes toward risk and return.

Based on these answers, you’ll discover your investment style and receive an asset allocation model. Next you determine the appropriate investments for each category.

Once you’ve created your asset allocation model, you should not need to change them in response to short-term market fluctuations because asset allocation options are intended to be long-range investment choices. For extra peace of mind, Morningstar regularly reviews the investment options.

Morningstar Associates, LLC is not an affiliate of the UNIFI Companies.