FINRA - Investor Information - Smart 401(k) Investing

Hypothetical Portfolios

Your age, risk tolerance, and other retirement assets will affect the type of asset allocation you choose for your portfolio. Although you can reallocate your portfolio when your situation changes, you should consider the long-term impact of asset allocation on your portfolio.

Take a look at the pretax value of these three hypothetical portfolios over 20 years, through 2006.

Click on the aggressive, moderate, and conservative allocation models to compare their performance over the long term.

Source: Ibbotson Associates, 2007

Aggressive Portfolio

Moderate Portfolio

Conservative Portfolio

Portfolio Value: $549,139
Stocks: $434,043
Bonds: $94,415
Cash: $20,681

An allocation model weighted heavily towards stocks is considered aggressive. This investing style might suit a younger investor willing to assume more investment risk.

Portfolio Value: $426,532
Stocks: $217,021
Bonds: $188,830
Cash: $20,681

This moderate allocation model is weighted towards both bonds and stocks. This investing style might suit an investor with a willingness to assume some investment risk in order to secure income, as well as some growth.

Portfolio Value: $290,842
Stocks: $72,340
Bonds: $94,415
Cash: $124,087

This portfolio concentrates on cash and bonds. This investing style might suit investors nearing retirement who are focused on capital preservation, rather than growth.

Investing Strategies

Hypothetical Portfolios