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Guess what?

As an investor in your retirement savings plan, you are already practicing the fine art of asset allocation.

What Is Asset Allocation?
Just as a painter has a palette of colors, an investor has a palette of investment types — called "asset classes" — to choose from.

Why Is Asset Allocation So Important?
Securities within an asset class will tend to behave similarly. Most stable value and money market securities are considered low-risk, low-return investments. Many large company stocks offer the opportunity for higher returns, but with more risk attached.

When it comes to making investment decisions, the asset class you choose actually has more impact on your long-term earnings than your individual fund choices.

For example, if your savings are invested mostly in money market or stable value funds, your risk of loss is quite low. But keep in mind that your rate of return may also be low. You may need to save more than investors who are comfortable with the increased risk of bonds and stocks.