Here are some things you may want to try:
Try a "common sense" approach: start out with high return/high risk investments at the beginning, and then move toward more conservative investments as you get near the end.
Try some custom portfolios with the following values of return and risk:
| Stocks|| Bonds|| Cash|
(Clicking sets the input fields for the "custom" portfolio, above.)
These are the values suggested by the asset allocation page, for "risk efficient" portfolios that combine stocks, bonds, and cash.
And here are some things to notice:
- Volatility doesn't just cause short-term fluctuations; it also causes significant swings in your final balance.
- A volatile investment really may "pay off in the long run"; but if the volatility is high enough, the long run may be longer than you've got.
These are reasons why people try to find strategies to predict and control the effects of volatility.
Also see the main article for more information on volatility and asset allocation.