How to Build Your Own Investment Portfolio
Create, manage and build your portfolio
Looking to put your money to work for the future? An investment plan is a critical step. Whether you’ve already begun saving or are just starting out, it’s important to have a target in mind. That will help determine how much you need to put away, what level of risk you should take and what investments you choose.
Here’s a four-step framework to help you build your own personalized investment portfolio.
1. Define Your Financial Goal(s)
Know what you're investing for—is it for your retirement, college education for yourself or a child, general investing to grow your current savings, or some other goal?
Determine your time frame for when you'll use the proceeds of your investment. Different goals may require different timelines and strategies for your investment plan.
Estimate the Amount
Add up how much you may need for each goal. Our calculator can help you determine how much you may need to invest depending on your timeline and goal amount.
2. Design or Modify an Investment Portfolio
Evaluate Your Risk Tolerance
The level of comfort with risk can be different for each person. Our Investment Planner tool can help you determine how much of the market's ups and downs you're comfortable with and which mix of investments might suit your situation, depending on how conservative or aggressive you want to be.
Remember that not taking enough risk with your investments is a risk in itself. For goals that are many years in the future, such as retirement for a person in their 20s and 30s, a portfolio that leans more aggressive may align with the longer timeframe until needing the money.
Diversify Your Investment Portfolio
Think about spreading your investments across different types of assets. Markets are unpredictable. The purpose of combining different asset classes is to be better prepared for various market conditions in an effort to provide more consistent, less rocky returns over time.
Diversification should go beyond the general categories of stocks, bonds and cash. Each of these can be split further into more specialized categories to take advantage of different parts of the market.
For example, in the stock portion of your portfolio, you can choose funds that invest in companies of various sizes or locations (U.S. or non-U.S.). You can also choose funds that select companies based on a particular investing style, such as growth or value.
Know Your Decision-Making Style
How will you manage your investment plan? Will you do the research and regular portfolio reviews yourself, or will you also consult a professional for advice and recommendations?
Run the Numbers of Retirement
3. Execute Your Plan
Invest in new funds, rebalance or readjust existing investments to align your portfolio with both your risk tolerance and goals.
Whether you like the convenience of having a portfolio that is managed for you, choose to build a diversified portfolio with our no-load mutual funds, or prefer the benefits of using a brokerage account to invest in a variety of investment types, you have choices.
Our Diversified Portfolios
If you don't have the time or expertise to research and make all of your own investing decisions, you can put our professional money managers to work for you.
Our Full List of Mutual Funds
You can create a complete, diversified portfolio with our broad lineup of no-load mutual funds. View our complete list of funds, including stock, bond, asset allocation and money market funds.
4. Maintain the Plan
Make It Automatic
Stay on Track
Letting winners run too long can lead to a lopsided portfolio. This increases the risk that your fortunes rise and fall based on the performance of one country, sector, company, or even one stock style. Learn how rebalancing can help you manage risk in your portfolio.
Do you have money in several different accounts—two or more investment companies or your bank? Consolidating investment accounts may give you a clearer picture of your overall financial standing, including whether you’re properly diversified.
Don’t just set it and forget it. Did you marry, divorce or have a baby? Do you want to dial back your level of risk? Would you like to retire earlier than you originally planned? Your investment plan may need adjusting to reflect these new realities.
Keep a Long-Term View
It’s never too early to get started on building your own investment portfolio. The more time you have for your investment to grow and compound, the more likely you are to reach your goals. And we’re here to help you along the way.
This information is for educational purposes only and is not intended as a personalized recommendation or fiduciary advice. There are different options available for your retirement plan investments. You should consider all options before making a decision. Our representatives can help you evaluate all of your distribution options.
Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.
Diversification does not assure a profit nor does it protect against loss of principal.
You could lose money by investing in a mutual fund, even if through your employer's plan or an IRA. An investment in a mutual fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Rebalancing allows you to keep your asset allocation in line with your goals. It does not guarantee investment returns and does not eliminate risk.