Build Your Perfect Portfolio

With the proper mix, your combined investments will be less risky and tailored to meet your goals.

EDITOR'S NOTE: This article is from Kiplinger's Mutual Funds 2008 special issue. Order your copy today.

The most important decision you'll make as an investor isn't which fund to buy. More vital to your long-term financial success is how you split money among different types of stocks and bonds. This asset selection will have the most effect on the two things you want to control most in your portfolio: thetotal return and the level of volatility. A smart, well-diversified portfolio gets you both a good return and low volatility. It's the financial equivalent of having your cake and eating it, too.

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Staff Writer, Kiplinger's Personal Finance