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3 simple steps to building a balanced portfolio

Use our tools and resources to create an investment portfolio
that fits your risk tolerance and investing style.
Assess your
risk tolerance
Consider your
asset allocation
Find the right

1. Assess your risk tolerance

As you build a portfolio, it helps to understand your risk tolerance by determining your investor profile. These range from conservative (seeking lower investment risk) to aggressive (able to tolerate greater investment risk). Higher-risk investments may have the potential for higher returns, but they also have greater potential for losses as illustrated below.
These historical returns charts illustrate how the asset allocations for the five investor profiles have performed from 1950 to 2017. Conservative bar chart shows Best year: 31.2%, Average year: 8% and Worst year: -8.1%. Moderately conservative bar chart shows Best year: 40.8%, Average year: 9.3% and Worst year: -15.2%. Moderate bar chart shows Best year: 45.8%, Average year: 9.9% and Worst year: -22.4%. Moderately aggressive bar chart shows Best year: 50.9%, Average year: 10.5% and Worst year: -29.5%. Aggressive bar chart shows Best year: 55.6%, Average year: 10.9% and Worst year: -36.2%.

2. Consider your asset allocation

Each investor profile has an associated asset allocation—the percentage of investments including stocks, bonds and cash that a portfolio holds. Asset allocation is a strategy that can help you balance portfolio risks and rewards.Footnote 2
The asset allocation by investor profile is as follows: Conservative is 20% Stocks, 55% Bonds, 25% Cash; Moderately Conservative is 40% Stocks, 50% Bonds, 10% Cash; Moderate is 60% Stocks, 35% Bonds, 5% Cash; Moderately Aggressive is 70% Stocks, 25% Bonds, 5% Cash; Aggressive is 80% Stocks, 15% Bonds, 5% Cash.
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3. Choose the right investments

Merrill offers a full range of investment choices, including stocks, bonds, ETFs, options and thousands of well-known mutual funds. By logging into your account, you can access tools to help you choose the investments that may be right for your investment strategy.
Narrow your investment choices with our stock, bond, ETF and mutual fund screeners.
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Invest in a single Target Allocation Fund aligned to your risk tolerance or a single Target Date Fund Footnote 3 managed to your investment time horizon, such as your retirement date. Please call us for more information.
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Past performance does not guarantee future results.

Footnote 1 Results shown are based on indexes and are illustrative; they assume reinvestment of income, no transaction costs or taxes, and the allocation for each model remaining consistent. The allocation models shown are strategic allocations established by the Research Investment Committee. Merrill Lynch has changed the models in the past and may do so in the future. Past performance does not guarantee future results. Index sources: Stocks — S&P 500 Index; Bonds — BofA Merrill Lynch US Broad Market Bond Index; Cash — BofA Merrill Lynch 3-Month T-Bill Total Return Index. Direct investment cannot be made in an index. Source: Merrill Lynch Investment Management & Guidance.

Footnote 2 Merrill Lynch has changed the allocations for each model in the past and might change the allocations in the future, depending upon research and investment strategy recommendations. These target allocations were determined in August 2013 and remain in effect in October 2017.

The investments or strategies presented do not take into account the investment objectives or financial needs of particular investors. It is important that you consider this information in the context of your personal risk tolerance, investment time horizon, liquidity needs and investment goals. Neither the information nor any opinion expressed constitutes a specific recommendation or a solicitation by us to buy/sell any securities or commodities.

Asset allocation does not assure a profit or protect against loss in declining markets.

Footnote 3 The target date for these funds is the approximate date when an investor plans to start withdrawing the assets from their retirement account. The principal value of these funds is not guaranteed at any time, including at the target date. These funds are designed to become more conservative over time as the target date approaches.

The Merrill Edge Select® Portfolios are part of the Merrill Edge Advisory Program and require participation in the program to invest. In addition the Merrill Edge Advisory Program is sponsored by Managed Account Advisors (MAA) an affiliate of MLPF&S. MLPF&S and Managed Account Advisors LLC (MAA) are registered investment advisers. Investment Adviser registration does not imply a certain level of skill of training.

For full fee details, please see the Merrill Edge Advisory Account ADV brochure (PDF). Program fees include portfolio management and trading costs. In addition to the annual program fee, funds within each portfolio have their own expenses, as would individual securities. Other fees may include those mandated by the SEC; transfer, exchange and fund-redemption fees; conditional deferred sales charges; and markups or markdowns.