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What to consider when building a custom portfolio
What to consider when building a custom portfolio
Updated over 3 weeks ago

π–¨π—‡π—π–Ύπ—Œπ—π—†π–Ύπ—‡π— π–Ίπ–½π—π—‚π—Œπ—ˆπ—‹π—’ π—Œπ–Ύπ—‹π—π—‚π–Όπ–Ύπ—Œ π–Ώπ—ˆπ—‹ π–¦π—Žπ—‚π–½π–Ύπ—…π—‚π—‡π–Ύβ€™π—Œ 401(𝗄) (𝗐𝗁𝖾𝗇 3(38) π–Ώπ—‚π–½π—Žπ–Όπ—‚π–Ίπ—‹π—’ π—Œπ–Ύπ—‹π—π—‚π–Όπ–Ύπ—Œ 𝖺𝗋𝖾 π–Ίπ—‰π—‰π—ˆπ—‚π—‡π—π–Ύπ–½) 𝖺𝗇𝖽 𝖲𝖀𝖯 𝖨𝖱𝖠/𝖨𝖱𝖠 π—‰π—‹π—ˆπ–½π—Žπ–Όπ—π—Œ 𝖺𝗋𝖾 π—ˆπ–Ώπ–Ώπ–Ύπ—‹π–Ύπ–½ 𝖻𝗒 π–¦π—Žπ—‚π–½π–Ύπ—…π—‚π—‡π–Ύ π–¨π—‡π—π–Ύπ—Œπ—π—†π–Ύπ—‡π—π—Œ, 𝖫𝖫𝖒, 𝖺𝗇 𝖲𝖀𝖒-π—‹π–Ύπ—€π—‚π—Œπ—π–Ύπ—‹π–Ύπ–½ π—‚π—‡π—π–Ύπ—Œπ—π—†π–Ύπ—‡π— π–Ίπ–½π—π—‚π—Œπ–Ύπ—‹. π–±π–Ύπ–Ώπ–Ύπ—‹π–Ύπ—‡π–Όπ–Ύπ—Œ π—π—ˆ β€œπ–¦π—Žπ—‚π–½π–Ύπ—…π—‚π—‡π–Ύβ€ β€œπ—π–Ύβ€ π—ˆπ—‹ β€œπ—ˆπ—Žπ—‹β€ 𝗂𝗇 π—π—π—‚π—Œ 𝖺𝗋𝗍𝗂𝖼𝗅𝖾 π—Œπ—‰π–Ύπ–Όπ—‚π–Ώπ—‚π–Όπ–Ίπ—…π—…π—’ 𝗋𝖾𝖿𝖾𝗋 π—π—ˆ π–¦π—Žπ—‚π–½π–Ύπ—…π—‚π—‡π–Ύ π–¨π—‡π—π–Ύπ—Œπ—π—†π–Ύπ—‡π—π—Œ, 𝖫𝖫𝖒. π–₯π—ˆπ—‹ π—†π—ˆπ—‹π–Ύ π—‚π—‡π–Ώπ—ˆπ—‹π—†π–Ίπ—π—‚π—ˆπ—‡ 𝗋𝖾𝗀𝖺𝗋𝖽𝗂𝗇𝗀 π–Ώπ–Ύπ–Ύπ—Œ 𝖺𝗇𝖽 π—Œπ–Ύπ—‹π—π—‚π–Όπ–Ύπ—Œ, π—Œπ–Ύπ–Ύ π–¦π—Žπ—‚π–½π–Ύπ—…π—‚π—‡π–Ύβ€™π—Œ 𝖠𝖣𝖡 2𝖠 π–‘π—‹π—ˆπ–Όπ—π—Žπ—‹π–Ύ 𝖺𝗇𝖽 π–₯π—ˆπ—‹π—† 𝖒𝖱𝖲.


While Guideline offers six managed portfolios, which offer diverse pre-selected funds for different ages and risk tolerances, you can also choose to build a custom portfolio.
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Building a custom portfolio will allow you to select the individual investments from our fund menu for your 401(k) or IRA and set the allocation percentage for each.
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Here are some major factors you might want to consider when building a custom retirement portfolio.
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Age and time until you retire

The amount of time left until you retire, also known as your time horizon, may be one of the most important factors to consider when deciding how to allocate your portfolio investments. Volatility, or the change in a given security’s value over time, is generally a bigger risk in the short-term than in the long-term.
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For example, if you’re retiring in 30 years, the volatility of your investments would likely have less of an impact than if you were to retire within the next few years. With a long time horizon, your portfolio may have time to recover from market downturns.
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Risk tolerance

Risk tolerance considers how your emotions affect your investment-making decisions. Knowing your comfort level can help you avoid some investing mistakes, such as reacting to short-term volatility.
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Riskier portfolios tend to see high returns when times are good, but severe losses during challenging times. If you’re risk averse, then it may be suitable to sacrifice a bit of long-term returns by investing in less volatile assets.
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Diversification

When it comes to investing, you may not want to hold all your eggs in one basket. Instead, you may want to diversify your portfolio – or invest over a wide range of asset classes and markets.
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The goal of diversification is to reduce risk and volatility of a portfolio by offsetting losses in one asset class with gains in another asset class. And rebalancing means making regular adjustments to ensure you're still hitting your target allocation over time. All are important tools in managing investment risk.
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For more information, see this guide by The Securities and Exchange Commission regarding asset allocation, diversification, and rebalancing.
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Cost

When choosing specific investments for your custom portfolio, you’ll want to consider the cost, known as the expense ratio of the fund.
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Expense ratios are fees mutual funds or other investment providers charge for managing investments in the funds, and are usually charged as a percentage of assets. The higher the expense ratio, the more the investments will cost you over time.
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How to build a custom portfolio with Guideline

If you’re ready to create your custom portfolio, simply navigate to the Portfolio section of your Guideline dashboard, then select the β€œBuild a Custom Portfolio" option.
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You can find step-by-step instructions for building a custom portfolio here.
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Remember, it’s important to do your research on any funds you select for your portfolio. If you have questions about your unique situation, consider consulting with a qualified financial adviser.
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​The information above is provided for educational purposes only and should not be construed as personal investment advice or a guarantee of performance.
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Diversification and asset allocation do not ensure a profit or guarantee against loss. Stock markets are volatile and can fluctuate significantly in response to company, industry, political, regulatory, market, or economic developments. Investing in stock involves risks, including the loss of principal.
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You should choose your own investments based on your particular objectives and situation. Be sure to review your decisions periodically to make sure they are still consistent with your goals.


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