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$ BY PAUL D. GUERRA ALTHOUGH MANY INVESTORS under- stand that they should invest in a variety of securities, they often stumble when it 's time to choose an asset a llocation that's right for them. The allocation that you choose should be based on how much risk you are willing to assume, why you are investing and when you will need to tap your investments. However, as you experience changes in your life, it can be appropriate to redistribute your assets. To ma inta in ba la nce in your portfolio, you should reeva luate your a llocation strateg y at least once a year or when you ex perience a major life change such as marriage or the birth of a chi ld. It 's not a lways necessa r y to ma ke a fundamenta l change to the a llocation, but you need to ma ke that eva luation on a regular basis. Sometimes your portfolio might just need a twea k to reba lance assets that have either increased or decreased in va lue. For exa mple, a booming stock market may mean that the va lue of the stock portion of your portfolio exceeds your original allocation. If that occurs, you may want to consider selling some stocks to br i ng your por t folio back into line with your initia l a llocation. Reba la ncing is a strateg y that ever y investor should ta ke advantage of as a way to ensure their portfolio reflects t hei r cu r rent i nvesti n g goa ls, ti me horizon, and tolerance for risk. Further changes to your a llocation a lso may be appropriate depending on your particu- lar investing style. Strategic investing. Most inves- tors ta ke a strategic approach to asset a llocation, meaning they have at least 10 years before they anticipate needing the money they are investing. Strategic investors look at the long term and typi- ca lly do not make frequent changes to their a llocation strateg y. A strategic i nvestor wou ld cha nge t he way h is or her money is invested if there was a funda menta l shif t in the economy (recession) or i f i n f lation bega n to outpace the ea rnings that his or her investments were generating. Cyclica l investing. Because the economy is cyclica l, some investors cha n ge t he way t hey a l locate t hei r a ssets, ever y three months to three years, based on the cycle of the economy. For example, a cyclica l investor might i nve s t heav i ly i n s t o ck s when t he economy ex per iences g row t h a nd , conversely, would invest more dollars in bonds when the economy experiences a period of contraction. Tactical investing. The third type of investor looks at the short term — a period of one year or less. The tactica l investor cha nges his or her por tfolio based on trends in the market. A tactical approach to asset a llocation isn't for ever yone a s it t y pica l ly requires a n investor to trade rather actively a nd sometimes trade with greater risk. Each investor has unique goals for his or her money and a distinctive invest- ment style. It is best to ta lk with your fina ncia l advisor about what kind of asset a llocation would be right for you and how often you should redistribute your assets. Bear in mind that although asset allocations diversifies your assets, it does not protect against fluctuating markets and uncertain returns. Paul Guerra is the Managing Principal of Brookshire Wealth Management in Canton Ohio. For more information visit brookshirewealth.com or e-mail G uerra at pguerra@wfafinet.com. ■ Investment products and services are o™ered through Wells Fargo Advisors Financial Network , LLC ( W FA FN), Me m b e r S I P C . B r o o k s h i re We a lth Ma n a g e m e n t i s a s e p a ra t e e n t i t y from WFA FN. Wells Fargo Advisors does not provide legal or tax advice. Be sure to consult with your tax and legal advisors before taking any action that could have tax consequences. Please consult your legal advisors regarding your fiduciary duties. We l l s Fa rg o A d v i s o r s F i n a n c i a l Ne t w o rk , L LC , Me m b e r S I P C , i s a registered broker-dealer and a sepa- rate non-bank a§liate of Wells Fargo & Company. F I N A N C I A L P L A N N I N G ❰❰❰❰❰ 2 7 ? F I N A N C I A L P L A N N I N G ? F I N A N C I A L P L A N N I N G ❰ ? ❰❰ ? ❰❰ ? ❰❰ ? ❰❰ ? ❰ 2 7 ? 2 7 $ from WFA FN. $ from WFA FN. Wells Fargo Advisors does not provide $ Wells Fargo Advisors does not provide legal or tax advice. Be sure to consult $ legal or tax advice. Be sure to consult with your tax and legal advisors before $ with your tax and legal advisors before taking any action that could have tax $ taking any action that could have tax consequences. Please consult your legal $ consequences. Please consult your legal advisors regarding your fiduciary duties. $ advisors regarding your fiduciary duties. We l l s Fa rg o A d v i s o r s F i n a n c i a l $ We l l s Fa rg o A d v i s o r s F i n a n c i a l Ne t w o rk , L LC , Me m b e r S I P C , i s a $ Ne t w o rk , L LC , Me m b e r S I P C , i s a registered broker-dealer and a sepa $ registered broker-dealer and a sepa- $ - rate non-bank a§liate of Wells Fargo $ rate non-bank a§liate of Wells Fargo & Company. $ & Company. Guesswork H e lp T a k e th e Out of CHOOSING INVESTMENTS M D N E W S . C O M /// M D N E W S C L E V E L A N D /A K R O N / C A N T O N ■ M A R /A P R 2 016 2 7