March 07, 2008


It was only a month ago that I posted about the turbulent beginning to the 2008 year in the stock market - since then, the roller coaster of volatility hasn't let up. The more you see and hear in the news each day, the more obviously critical proper diversification and asset allocation become. The real challenge is actually doing it. It's definitely easier said than done. One of the best tools I've come across to aid an individual investor in this effort is a free Morningstar resource called 'Portfolio X-Ray' ... located at:

To use the X-Ray tool, simply enter your holding(s) (stocks, mutual funds, ETFs, etc.), their current value(s), and click to "Show instant x-ray" ... the results are nicely organized and straightforward allowing you to see how your money is "spread out" among sectors, asset classes, foreign vs. domestic, stock vs. bond, etc. In addition to getting a more clear picture of how you are "actually" allocated [rather than perceived], it also allows you to see any "overlap" in your holdings. Overlap is an issue that occurs commonly in investing; it is when an individual has investments with different objectives in mind, but the reality is that the investments do much of the same thing (how similar will define exactly the degree of overlap). Performing an "X-Ray" on your portfolio will help you to avoid the common problem of overlap.