Calculating Your Asset Allocation

Own a lot of mutual funds? Here's how to figure out what percentage of your investments is in stocks vs. bonds.

I own Dodge & Cox Balanced, T. Rowe Price Capital Appreciation and Vanguard Star mutual funds, as well as five pure stock funds and one bond fund. When I calculate the percentage of my investments in stocks and bonds, should I include the portion of bonds in my balanced funds as part of my total allocation?

Absolutely. Think of it this way: If you have $1,000 in a pure stock fund and $1,000 in a fund that's 60% in stocks and 40% in bonds, you effectively have $1,600 in stocks and $400, or 20% of your portfolio, in bonds.

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Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.