What is the "Right" Mix?

Determining which mix of assets your clients hold in their portfolios is dependent on two things: their time horizon and risk tolerance.

Time Horizon¹
Your clients' time horizon is the expected number of months or years they'll invest to achieve a particular financial goal.  An investor with a longer time horizon may feel more comfortable taking on riskier, or more volatile, investments because they can tolerate the inevitable ups and downs of the markets.  By contrast, an investor with a shorter time horizon would likely take on less risk.

Risk Tolerance¹
Risk tolerance is the degree of uncertainty an investor can handle with regard to the value of their portfolio.  An aggressive investor, or one with a high-risk tolerance, is more likely to risk losing money in order to get better results. A conservative investor, or one with a low-risk tolerance, tend to favor investments that will preserve their original investment.