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Looking at my investment portfolios, I have a 401k, Roth IRA, and a savings account. Optimum portfolio allocation could be used to assess the risk level of each going forward. “Portfolio models are used to determine the percentage of the investment funds that should be made in each asset class. The goal is to create a portfolio that provides the best balance between risk and return” (Anderson, et al., 2016). The goal in using the optimum portfolio is to minimize the risk invested in my retirement plans. I could use this type of modeling to determine which areas I should allocate my funds and likely receive my best return in the end, or at least minimize the risk my money will be exposed to. There are two types of portfolio models that I could use to: conservative models, and moderate risk models. The conservative portfolios have a strong aversion to risk, while the moderate risk takers are hoping to get a little bit better in returns by taking their chances on some risk exposure. Currently, I have my Roth IRA as a conservative approach just because I wanted to get started at a young age and did not have a lot of money to invest at the time. I figured a little is better than nothing. I do plan to open up another Roth IRA in the future when there is more comfortability money wise to go after a little more risk. With a moderate risk model, the idea is to set a minimum return rate in order to invest in ways that will maximize the return. In the future, when I go about making a moderately risky portfolio, I will likely look back at this section to help with creating an optimum model based off the rate of return I hope to achieve in my investments. This will help me pick the best investments in order to achieve the desired return at a tolerable level of risk. I do not see myself going about a maximin portfolio unless I find myself a very wealthy individual in the future. To me, I do not ever see myself ever comfortable with risking a lot of money on investments as I do not have money to throw away now and may not ever.

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