As we discuss our suggested allocations for 2013, 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).

This is true whether you use a "dynamic" (flexible) allocation, as described in this month's cover article, or a more traditional "static" (fixed) allocation as we'll discuss in this column. The more you put into stocks, the greater the potential for growth but also the greater the risk.

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