A primordial take on asset allocation

To find the right use of all of your precious assets, take a step (way) back.

Christine Benz 20 April, 2018 | 5:00PM

What comes to mind when you hear the words asset allocation? Stocks, bonds and cash, right? Maybe commodities, real estate and a dash of precious metals thrown in for good measure. Perhaps alternative investments for those who are so inclined.

Those are certainly the main assets in the conventional asset allocator's toolkit. But I think investors spend too much time on this type of asset allocation -- and the smaller-bore issues that follow from it, such as selecting specific funds, ETFs and stocks -- while ignoring even more basic asset-allocation issues.

What do I mean by more basic -- so basic that they're downright primordial -- asset-allocation issues? I'm talking about really big-picture allocations, like how you how you allocate your financial assets across your total opportunity set: spending versus saving, investing versus debt pay-down. Whether you've invested enough in yourself and are maximizing your human capital. How you spend your money, and your time, too.

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About Author

Christine Benz

Christine Benz  Christine Benz is Morningstar's director of personal finance and author of 30-Minute Money Solutions: A Step-by-Step Guide to Managing Your Finances and the Morningstar Guide to Mutual Funds: 5-Star Strategies for Success. Follow Christine on Twitter: @christine_benz.

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