Asset Classes (The Building Blocks of a Diversified Portfolio)

most professionals insist every investment portfolio should include these asset classes:

US Stock Blend (broad exposure, large cap focus, mix of growth & value)
International Stock Blend (broad developed-nation exposure, large cap focus, mix of growth & value)
US Government Bond Blend (conservative focus; short term & intermediate term maturity)

most professionals agree that the following asset classes add diversification benefits:

US Mid Cap, Small Cap, & Micro Cap Stocks
(real estate investment trusts)
International Small Cap Stocks
Emerging Market Stocks
(inflation protected bonds)
Value Stocks
(large & small cap, US & International)

there is some controversy among professionals about whether these asset classes are necessary (or in some cases,
worth the risk). Many feel, if they are included in a portfolio they should be added sparingly with no single group exceeding
more than perhaps 5-10% of a typical portfolio:

Corporate Bonds
Hi Yield Bonds
International Bonds
Emerging Market Bonds


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