Portfolios must change over time to reflect an investor's needs and goals, but selecting, rebalancing and keeping up the proper mix of investments can be time-consuming and confusing for many individuals. Asset allocation funds aim to accomplish the dual goals of creating diversification and meeting growth or income needs in one fund.

But, as with any investment, these aren't meant to be put on autopilot. Investors still have to watch the performance of the fund, even if the portfolio was constructed to meet risk tolerance or a target retirement date.

There are several different types of asset allocation mutual funds, but the most common are referred to as life-cycle funds and lifestyle funds:

● Life-Cycle: Created with a future date in mind, the portfolio rebalances to become more conservative as the investor gets closer to the target date.
Lifestyle: A portfolio of cash, stocks and bonds that remains fixed and is designed to meet the risk tolerance of the investor.

● Life-Cycle: Target Date Funds

Life-cycle funds are created with a specific future date in mind, such as retirement. "For example, a 2030 target date would mean the investor expects to retire in that year," says Kevin Morris, director of

LOS ANGELES (Reuters) - Starbucks Corp said on Wednesday it would slash U.S. coffee store openings through 2011 to cut costs in the face of weak U.S. sales and to focus more on growth abroad.

The company, which warned last week of the worst economic environment in its history, said U.S. customer visits had slowed but estimated growth in international business profit margins over the next few years.

Investors and analysts have been pushing for Starbucks to cut plans for U.S. expansion.

"It's not really surprising that they've slowed their store growth. The fact that they are making plans to slow it is certainly better than what they were telling us before," said John Langston, an analyst at Hodges Capital Management.

On Wednesday, the coffee shop chain posted fiscal second-quarter net income of $108.7 million, or 15 cents per share, compared with $150.8 million, or 19 cents per share, a year earlier.

Results from the most recent quarter included restructuring-related charges of about 3 cents per share.

Prior to its warning last week, analysts had been looking for a second-quarter profit of 21 cents per share. The results matched lowered estimates, according to Reuters Estimates.

Total revenue rose 12 percent to $2.53 billion. The company said revenue was lower than expected due

WASHINGTON (AP) -- The bruised economy limped through the first quarter, growing at just a 0.6 percent pace as housing and credit problems forced people and businesses alike to hunker down.

The country's economic growth during January through March was the same as in the final three months of last year, the Commerce Department reported Wednesday. The statistic did not meet what economists consider a definition of a recession -- which is a contraction of the economy. This means that although the economy is stuck in a rut, it is still managing to grow, even if slightly.

Many analysts were predicting the gross domestic product (GDP) would weaken a bit more -- to a pace of just 0.5 percent -- in the first quarter. Earlier this year, some thought the economy would actually lurch into reverse during the opening quarter. Now, they say they believe that will likely happen during the current April-to-June period.

"The economy is weak but not collapsing," said Lynn Reaser, chief economist at Bank of America's Investment Strategies Group. "A recession can't be ruled out, although the stars are not lined up at this point to definitively say one way or the other."

On Wall Street, the Dow Jones industrials closed down 11.81 points.

Gross domestic product measures the value of all goods and services produced within the United States

WASHINGTON (AP) -- Scrambling to shore up the faltering economy, the Federal Reserve cut interest rates to the lowest point in nearly four years Wednesday as the nation teetered on the edge of recession.

Wall Street rallied at first but then pulled back, concerned that the reduction might be the last for a while.

In fact, the Fed's trim was smaller than those of recent months amid indications the central bank might pause to see if months of powerful rate-cutting medicine and billions of dollars in stimulus checks will be enough to lift the country out of its slump.

Chairman Ben Bernanke led a divided Fed, in an 8-2 vote, in slicing its key rate by one-quarter percentage point to 2 percent.

In turn, the prime lending rate for millions of consumers and businesses fell by a corresponding amount, to 5 percent. The prime rate applies to certain credit cards, home equity lines of credit and other loans. Both rates are the lowest since late 2004.

The Federal Reserve, which has been dropping rates since last September, turned much more forceful early this year when housing, credit and financial problems worsened. Rate reductions in January and March alone marked the most aggressive intervention in a quarter-century in an effort to re-energize consumers and businesses.

"The substantial easing of monetary policy to date ... should help to promote moderate growth over time

Don’t lose faith in your planner just because he keeps you invested in a down market. Ask yourself these questions first.

Question: I saw many signs in 2007 that indicated that this would be a tough year in the market. But when I mentioned my concerns to my adviser, he resisted my suggestion to move into more conservative investments. His recommendation has cost me a lot of money, so I’m wondering: Should I stick with an adviser who only seems to have a pat answer of buy and hold? Shouldn’t he be managing my investments and giving me advice based on market conditions? –Rod G., Lexington, Ohio

Answer: First, let me say that it’s not at all clear to me that your adviser has done anything wrong. Frankly, I’m more suspicious when advisers are eager to dump existing investments and buy into new ones. After all, making more buy and sell recommendations is usually in the adviser’s financial interest, since more moves can generate more commissions, or at least make it appear that the adviser is on top of the situation.

So the fact that your adviser didn’t play yes-man to your urge to move into more conservative investments doesn’t automatically suggest to me that he’s incompetent or lazy. Quite the opposite. As long as you were going into 2008 with a reasonably diversified portfolio that made sense given your particular situation, then it seems reasonable to me that he would want to caution you against making any big moves.

That’s not to say that an adviser shouldn’t be ready to re-evaluate a strategy in light of market

LOS ANGELES (AP) -- Countrywide Financial Corp. said Tuesday it lost $893 million in the first quarter, as rising loan defaults amid a deepening housing downturn forced the nation's largest mortgage lender and servicer to sharply increase its provision for loan losses and book other credit-related charges.

The latest results marked the third consecutive quarterly loss for Countrywide, which reaped a windfall during the housing boom but has been struggling since last summer, despite predictions last fall by CEO Angelo Mozilo that his company would turn a profit in 2008.

The Calabasas, Calif.-based company, which agreed in January to sell itself to Bank of America Corp. for about $4 billion in stock, did not conduct an earnings conference call with analysts, citing the proposed sale.

The company said its loss amounted to $1.60 per share for the quarter ended March 31. A year earlier, it earned $434 million, or 72 cents per share.

Revenue plunged 72 percent to $679 million from $2.4 billion in the year-ago quarter.

Analysts polled by Thomson Financial, on average, forecast earnings of 2 cents per share on sales of $1.5 billion.

Countrywide shares rose 2 cents, less than a percent, to $5.85 Tuesday after falling as low as $5.63

Buffett says he 'got a call' about Bear Stearns, but bailing out the investment bank with only two days for due diligence, he says, 'took some guts that I didn't want to match.'

(Fortune Magazine) -- If Berkshire Hathaway's annual meeting, scheduled for May 3 this year, is known as the Woodstock of Capitalism, then perhaps this is the equivalent of Bob Dylan playing a private show in his own house: Some 15 times a year Berkshire CEO Warren Buffett invites a group of business students for an intensive day of learning. The students tour one or two of the company's businesses and then proceed to Berkshire (BRKA, Fortune 500) headquarters in downtown Omaha, where Buffett opens the floor to two hours of questions and answers. Later everyone repairs to one of his favorite restaurants, where he treats them to lunch and root beer floats. Finally, each student gets the chance to pose for a photo with Buffett.

In early April the megabillionaire hosted 150 students from the University of Pennsylvania's Wharton School (which Buffett attended) and offered Fortune the rare opportunity to sit in as he expounded on everything from the Bear Stearns (BSC, Fortune 500) bailout to the prognosis for the economy to whether he'd rather be CEO of GE (GE, Fortune 500) - or a paperboy. What follows are edited excerpts from his question-and-answer session with the students, his lunchtime chat with the Whartonites over

CHICAGO (AP) -- The Oracle of Omaha is betting that the country's candy jar is recession-proof.

With financing from Warren Buffett, candy maker Mars Inc. on Monday said it is buying confectioner Wm. Wrigley Jr. Co. for an estimated $23 billion in cash. The deal would marry brands that sweet-toothed Americans have munched on for decades: Mars owns Snickers and M&Ms; Wrigley's gum brands include Juicy Fruit, Orbit, Extra and Big Red.

"A good time to buy a really great business is when you can do it," Warren Buffett said on CNBC Monday, adding that he understands Mars and Wrigley better than the balance sheets of most major banks.

Buffett's Berkshire Hathaway Inc. will purchase a $2.1 billion minority equity interest in the Wrigley subsidiary once the deal is completed. The Omaha, Neb.-based company also offered $4.4 billion of subordinated debt to fund the deal.

"In terms of Warren Buffett's sweet spot, these are exactly the kind of brands that he wants," said Jet Hollander, a former candy industry executive who is president of the snack food consulting firm Pre-Eminence Strategy Group.

If the buyout receives regulatory and shareholder approval, the combined companies would leapfrog over Britain's Cadbury Schweppes as the world's largest confection maker -- a move that's already fueling