After all the ups and downs in the market over the last couple of years, it's important that you review your investment accounts to make sure you are not taking more risk than you should be.

We've seen dramatic growth in international and emerging market stocks and stock funds. If you hold these asset classes, it is likely that you have more invested in them right now that you should due to their tremendous growth of late. The emerging markets fund that JATAJ Wealth Management uses, for example, was up over 83.58% in 2009, while the international developed fund we use was up over 39%. (The U.S. total market fund we use was up 29% in 2009.)

We currently target about 5% emerging market and 20% developed international exposure in the stock portion of client portfolios. So if the emerging market asset class, for example, has grown to 7% then the client may be exposed to more risk than they desire. We then sell off the excess 2% and buy into an asset class in their portfolio that is underallocated. (The total allocation always equals 100% so if one asset class is above its target, something else is below its target.)

If you have not done this with your investments it is important that you do this now. If emerging markets, for example, have hit their high and begin to fall, you'll lose more money in your account with a 7% exposure than you would with a 5% exposure. Of course we don't know if emerging markets has hit their high which is why we will maintain a 5% exposure and let the market do what it does.

Take a look at your accounts and see if a little rebalancing is in order. It can mean a lot more money in your pocket in the long run!

Author's Bio: 

Janet Tyler Johnson is author of the book "Finding Financial Fulfillment, for a Life Filled with Money and Meaning" and is a Certified Financial Planner(R) professional with over 25 years of experience in the financial services industry. Prior to opening her own fee-only financial planning and investment advisory firm in 2005 she was in charge of the financial planning and investment management division of the country's 12 largest CPA firm. You can learn more about Janet and the services she offers at

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