Stock markets continue to go sideways. I am waiting to complete a makeover of my portfolio to allow for less active management and reduce volatility. That usually means more fixed income. One point to be aware of is that the effect of having a portfolio that is more “balanced” is to reduce the potential returns.

It’s a simple calculation. Just look at the weighted-average returns using some assumed rates of return on equities and fixed income, whatever they might be. The result is that even a 50/50 balanced portfolio will make it very difficult to grow your portfolio. But it’s the same old story. Risk and return are inversely proportional.

In the end, it’s necessary to look at your risk tolerance as well as your cash flow needs. It then gets back to budgeting to make the numbers work as best you can. Budgeting is not complicated; it doesn’t need fancy software or an elegant bookkeeping software package. But it does need a commitment to keeping this routine of tracking stuff consistently. In the absence of being consistent, it’s just a waste of time.

“Microsoft Excel Built-in Templates: Open Excel, go to ‘New,’ and search for ‘Budget.” The “Simple Annual Budget” or “Personal Monthly Budget” are excellent for beginners, providing summary charts and expense tracking.

Check out these free templates to get started. It’s not that difficult.