Choosing Your Stock and Bond Mix

Your split between stocks and bonds is the biggest single decision in a portfolio. Here is how time horizon, goals and your tolerance for losses shape it, with common starting mixes.

The most important choice

How much you put in stocks versus bonds and cash does more to shape your results, and your worst years, than which individual funds you pick. More stocks means more growth potential and deeper drops. More bonds means a smoother ride and lower expected returns.

A simple three-fund portfolio: U.S. stocks, international stocks and bonds.

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The rest of this lesson, its chart examples and quiz are part of Investing School. Start free with Stock Market Fundamentals and the first lesson in every category.