A Good Time for Financial House-Cleaning

Thanks to upward-roaring stock prices during the first quarter of 1998, its time to take a hard look at your financial portfolio, experts say.

Market gurus have a technical term for it: "asset allocation." That simply means the mix of stocks, bonds, and cash that matches your goals.

"After a good quarter, as we've had recently, there's always the danger of ... being top-heavy" in stocks, says Russel Kinnel, an analyst at Morningstar in Chicago.

Or, if you've been dancing around the edge of this bull market, your need may be the reverse: to gradually boost your exposure to stocks. Each year, or after a big quarterly change, "check out your portfolio to get your investments back to your basic goals," Mr. Kinnel says.

The chart to the right, from mutual-fund company Vanguard, shows four model portfolios, depending on your goals.

Most experts stress that people should put at least half their assets in stocks right up to retirement. And even during retirement, some assets should be in stocks to offset inflation.

Different types of funds - foreign, small-company, and real estate, for example - can help reduce volatility in your portfolio, because they won't all move in sync. "Don't go overboard in any one area," Kinnel says.