Investments are categorized into different asset classes. How your investments are divided, or allocated, among those classes is an important investment consideration. Asset allocation is an effective method for analyzing your portfolio and creating an investing strategy based on the amount of growth you want and the level of risk youÆre comfortable with.

Work with Money to determine a target asset allocation. Then use this target to help make decisions about investments youÆre buying and selling. Consult with your financial advisor to refine your strategy.

Asset classes for mutual funds. Money downloads the asset class for mutual funds in your portfolio based on the Morningstar classification of the fund. If you choose not to download, you can specify a single asset class for each of your mutual funds.

1. Create investment accounts and enter all your investments. Make sure theyÆre all associated with an asset class.
2. On the Investing menu, click Asset Allocation.
3. Click Learn.
4. Work through the Asset Allocation pages. These include reviewing your current asset allocation, customizing your allocation to risk levels you are comfortable with, comparing your current asset allocation with a target, and creating an action plan (see Figure 6-6).

After you set your target asset allocation in Money, review and update it periodically to stay on track.

1. On the Investing menu, click Asset Allocation.
2. Review the Compare current and target asset allocations page.
   • To change current allocation amounts, click Reallocate assets in plan in the left pane.
   • To change your target allocation, click Customize your asset allocation in the left pane.