Want to know the one tip that will make you a successful investor? No, this isn’t a sales pitch for some get-rich-quick stock trading program. It’s a bit of good investing advice from Business Week on the factor that most separates excellent investors from average Joes.

The answer, experts say, is asset allocation. Dozens of investment studies show that one basic decision–how you divide funds among such broad asset classes as large- and small-company stocks, domestic and foreign shares, corporate and government bonds, and cash–will determine, on average, 90% of your success as a money manager. The impact of a diversified-asset mix swamps the effects of hot stock picks or great calls on market turns.”

So suppress that inner Warren Buffet you’ve been fighting and tell that guy at the office with the “hot stock tip” that you’re not interested. Instead, concentrate on getting your portfolio mix balanced with the acceptable risk you’re willing to take and how long you’re planning to invest for.— FREE MONEY FINANCE

Time to Reshape Your Portfolio [Business Week]
(Photo: physis3141)

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.