As we discuss our suggested portfolio allocations for 2014, we begin with a reminder that the most important characteristic of your portfolio — the factor that influences the performance of your portfolio more than any other — is the way you divide your money between investments in which you are an owner (stocks) and those where you are a lender (bonds). The more you put into stocks, the greater the potential for growth but also the greater the risk.

In determining your stock/bond allocations, it's important to carefully consider your personal goals and risk tolerance. To help you balance your need for growth against the importance of preserving your capital, we provide our suggestions in Table 1 below.

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