Retirement & Guidance > Retirement Resource Center >

Retirement Saving and  Investing     Overview Starting to Save   Reasons to Start Early   Getting a Late Start?   Finding Money to Invest Making Your Plan   Steps to Get Started   Investing Strategies   When You Change Jobs Putting Your Plan Into Action   Retirement Account Options at Fidelity		Investing Strategies
		For the retirement investor, time can be your best ally. Typically, the longer your investments have to grow in an IRA, SEP, SIMPLE, 401(k), Self-Employed 401(k), or annuity, the better off you may be when you're ready to retire. Planning Your Asset Allocation But time is not the only factor that affects the growth of your accounts. Asset allocation — the way you distribute your money among stocks, bonds, and short-term investments — can affect the returns you may achieve. A thoughtfully allocated plan can help reduce the risk that the returns in your retirement savings portfolio don't depend on the performance of any one type of investment. Find the mix that fits your tolerance for risk and your timetable for when you'll need the money. Once you've made that crucial decision, choose your specific investments and stick to your plan. Choosing Your Investments Most employer-sponsored retirement plans offer a selection of investment options spanning the risk/return spectrum from aggressive to conservative. IRA and small business retirement plan assets can typically be invested in mutual funds, stocks, bonds, or more conservative investments like CDs or treasuries. When choosing your investments, ask yourself three questions. 1.   How long until I need the money? The longer your time horizon, the more aggressive you may want your target asset mix to be, depending on your risk tolerance. 2.   How well can I handle the market's ups and downs? If every twist and turn keeps you up nights, you may find more peace-of-mind in a more conservative allocation. 3.   How does this investment fit into my overall financial picture? For most investors, their retirement assets are the largest amount of money they will manage. The sample portfolios below are examples of asset allocations arranged according to time horizon.   Most Aggressive Portfolio Time Horizon: More than 10 years This target asset mix may be appropriate for investors who seek very aggressive growth and who can tolerate very wide fluctuations in market values, especially over the short term. Aggressive Growth Portfolio Time horizon: more than 10 years This target asset mix may be appropriate for investors who seek aggressive growth and who can tolerate wide fluctuations in market values, especially over the short term. Growth Portfolio Time horizon: more than 5 years This target asset mix may be appropriate for investors who have a preference for growth and who can withstand significant fluctuations in market value. Balanced Portfolio Time horizon: less than 5 years This target asset mix may be appropriate for investors who want the potential for capital appreciation and some growth and who can withstand moderate fluctuations in market value. Conservative Portfolio Time horizon: less than 5 years This target asset mix may be appropriate for investors who want to minimize fluctuations in market values by taking an income-oriented approach with some potential for capital appreciation. Short Term Portfolio Time horizon: n/a This target asset mix may be appropriate for investors who want to preserve their capital and can accept the lowest returns in exchange for price stability. Asset Allocation and Earnings Consider two hypothetical investors. By the time they were age 35, Mark and Nancy had each had $30,000 invested in an IRA earmarked for retirement. Nancy never made another contribution, but her investments returned 9% a year. Mark continued to contribute $3,000 each year, but was more conservative than Nancy and only achieved a 4% return each year. Although she had not made additional contributions, after 30 years, Nancy had accumulated more money in her account. How? Since Nancy's more aggressive asset allocation (and greater risk), earned her 9% a year, it has allowed her initial deposit to not just keep up with Mark's account but to actually surpass it. Imagine how much more her assets could have grown if she had also made annual contributions! This hypothetical example demonstrates the impact asset allocation can have on your investment returns.* It's not just the amount of money you save; how it is allocated among investment types also makes a difference. A widely cited study of pension plan managers shows that 91.5% of the difference between one portfolio's performance and another's is explained by asset allocation (Brinson, Singer, and Beebower, Financial Analysts Journal, 1991). Of course, past performance is no guarantee of future results. *The hypothetical example is for illustrative purposes only and is not intended to imply the performance of any Fidelity product. Your investments may earn more or less than this example. Tools and Services to Help From seminars at our branches to online tools and resources, Fidelity can help you establish an investment strategy that fits your needs. Retirement Seminars Seminars on a variety of topics are held at Fidelity branch offices around the country. Find the seminar near you. Money Management Services Explore whether professional management of your retirement investments could be right for you. Fidelity's Portfolio Advisory ServicesSM.* Tools to Create an Investment Strategy •   Portfolio Review - In this tool, Fidelity offers straightforward, specific guidance — including analysis of your portfolio, asset allocations, and mutual fund recommendations — so you can fine-tune your portfolio to help meet your financial goals. •   Portfolio Analysis (requires login) - Get a better idea of how your portfolio is diversified. This tool categorizes your investments into asset classes, including "look through" for mutual funds, giving you a more detailed analysis. Additional Resources •   Contribute to an IRA Automatically •   Recharacterize IRA Contributions •   Convert to a Roth IRA *Portfolio Advisory Services is a service of Strategic Advisers, Inc., a registered investment adviser and Fidelity Investments company. Portfolio Advisory Services may be offered through the following Fidelity Investments companies: Strategic Advisers, Inc., Fidelity Personal Trust Company, FSB ("FPT"), a federal savings bank and a registered investment adviser or Fidelity Management Trust Company ("FMTC")		Related Links    Open an IRA    Choose Investments for Your IRA
		Copyright 1998–2009 FMR LLC All rights reserved. Terms of Use  Privacy  Security  Site Map