Secrets of 6 top financial advisers

Some of the financial planning profession's most respected veterans reveal their favorite strategies for tough times.

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The secret to creating the right mix
The secret to creating the right mix
Years in business: 39
Client assets: $500 million
Known for: Wrote the textbook "Personal Financial Planning;" teaches at Pace University
Tailor the averages to who you are

Lew Altfest - The teacher
L.J. Altfest & Co., New York City

Start out with a portfolio that's 65% stocks and 35% bonds and cash. That's my clients' average asset allocation. That's moderate: It gives you the upside of stock with significant protection for times such as now.

Then you have to take into account your personality and your circumstances. How safe is your job, how much money have you accumulated, can you afford to take risks?

If you're young and have decent risk tolerance, you could go to 80% stocks. If a lot of your money goes toward debt repayment, shift more toward bonds. But if your portfolio is less than 50% stocks, be prepared to accept a lower standard of living in retirement.

You can make tactical moves too. I think you should be overweighted in stocks now because you have the potential for above-average returns. Pull back when everybody says, "Why did we ever doubt the market?"

People want to tilt a portfolio toward that which has performed well and away from the areas that have not performed well. You should be doing the opposite. The thing that you should do robotically is rebalance and get back to your original allocation every quarter or once a year.

NEXT: The secret to saving more money

Last updated December 10 2008: 1:46 PM ET
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