How do I set an asset allocation for a goal that's 5 to 10 years away, like a home purchase?

Medium-term goals sit in an awkward middle: too soon for an all-stock portfolio, too far off for pure cash. A balanced mix, often something like 40-60% stocks with the rest in bonds and cash, is a reasonable starting range, tilting more conservative as the target nears. The idea is to capture some growth while limiting the odds that a crash right before you need the money forces a bad outcome.

As you enter the final couple of years, shift the money you'll actually spend into safe vehicles like high-yield savings, CDs, or short-term Treasuries, so a downturn can't derail the purchase. For a hard deadline like a down payment, certainty matters more than squeezing out extra return. Match the risk to the runway: the closer the goal, the more the money should be protected rather than exposed to market swings.