Inventory the household balance sheet
Income, property, pensions, business interests and existing savings all influence appropriate risk.
Reserve capital for known needs
Emergency reserves and near-term obligations should be separated from long-term capital.
Set a strategic allocation
Broad allocations among growth assets, income assets and liquid reserves determine much of portfolio behavior.
Use allocation ranges
Ranges acknowledge that markets move and create objective rebalancing thresholds.
Review the whole household
A holding may look reasonable alone but create excessive concentration when combined with employment or property exposure.