Managing Your Investment Assets Asset allocation is the decision of how you divide your investment portfolio between various assets. Typical asset categories include cash or short- term securities (Treasury bills, CDs, etc.), bonds (municipal bonds, corporate bonds, etc.), and equity funds or equities (stocks, stock mutual funds, etc.). The following table illustrates several model portfolios that you can use as a basis for your own investment plan, depending on such factors as your time horizon, risk tolerance, and investment philosophy. 11+ Years 100% Equities Model Portfolios and Time Horizons Risk Tolerance/Investment Philosophy 0-5 Years 6-10 Years High Risk/Aggressive 10% Cash 20% Bonds 30% Bonds 80% Equities 60% Equities Moderate Risk/Moderate 20% Cash 10% Cash 40% Bonds 30% Bonds 40% Equities 50% Equities Low Risk/Conservative 35% Cash 20% Cash 40% Bonds 40% Bonds 20% Bonds 80% Equities 10% Cash 30% Bonds 60% Equities 25% Equities 40% Equities Suppose that Robyn is using an investment program to save money for a down payment on a condominium. Therefore, she will need to use her investment money within the next 3 years. Although Robyn doesn't mind taking on a small amount of risk, her primary investment goal is the preservation of her investment capital. Robyn is investor with a time horizon of Using the model portfolios provided, what is the ideal asset allocation for Robyn's portfolio, based on her time horizon and investment philosophy? If no funds are recommended to be allocated toward an asset, enter "o" into the numeric entry box for that asset. Recommended asset allocation for Robyn's portfolio: Cash: Bonds: Equities: % % If you In general, if you have a longer time horizon and a higher risk tolerance, then a higher percentage of your portfolio should be in are investing for a shorter time horizon, or if you have a more conservative investment philosophy, then you should invest a greater percentage of your portfolio in