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How do I use asset allocation?
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The ABC Investment Plan® is a great way to allocate assets, because it only requires a small investment amount each month. A dollar-cost averaging program like the ABC Investment Plan® simplifies the investment process, since the investments are done automatically. The discipline of the ABC Investment Plan® can fit neatly into your asset allocation plan. A program of regular investing doesn't assure a profit or protect against loss in a declining market. You should evaluate your ability to continue in such a program in view of the possibility that you may have to redeem fund shares in periods of declining share prices as well as in periods of rising prices.
Also, remember that asset allocation is designed to help reduce a portfolio's volatility. Retirement and education planning are two common long-term investment goals. Individual retirement accounts (IRAs), Coverdell education savings accounts (formerly known as Education IRAs) and Uniform Gift to Minor Act (UGMA) accounts are appropriate vehicles for asset allocation. Since these types of accounts require either no minimum or small minimum investments, they can provide a flexible way to diversify assets.
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Investment Professionals 