How to Build a Better Portfolio

The key to successful investing is in how you divvy your assets between U.S. stocks, foreign stocks, bonds, cash and other types of investments.

This is shaping up to be a tough year for investors. Year-to-date through September 9, the U.S. stock market was off about 7%, and foreign stocks were down even more. But if you owned, say, T. Rowe Price Personal Strategy Balanced (symbol TRPBX), a well-diversified fund that holds stocks, bonds and cash, you’d have lost only 4%.

The fund’s long-term results have been even more impressive. Over the past decade, it gained 5.8% annualized, compared with 2.6% for Standard & Poor’s 500-stock index. And the fund beat the index while being 30% less volatile.

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Bob Frick
Senior Editor, Kiplinger's Personal Finance