The following graph illustrates the long-term (15 years) risk/reward relationship between stocks and bonds. The addition of stocks to a bond portfolio initially diversifies the portfolio and increases the long-term return while reducing the long-term risk. Once the asset mix reaches 5% stocks/95% bonds, the addition of more stocks continues to increase long-term returns but risk begins to increase. A portfolio that has an asset allocation of 10% stocks/90% bonds will offer a higher long-term return with a similar amount of risk as a 100% bond portfolio. A portfolio invested entirely in stocks has historically produced the greatest return but it also exposes the portfolio to the greatest risk and volatility