Gail Bebee is the author of No Hype — The Straight Goods on Investing Your Money. She can be reached at gbebee@gailbebee.com ; her website is www.gailbebee.com. This is part seven of a 12-part series for people that are new to investing on their own.

How you put these building blocks together to create a portfolio is a critical determinant of your investing success. In this article, I’ll examine the process of portfolio building and offer some sample portfolios.

New to direct investing? The series

More from Gail Bebee:

• Let’s Talk Investing video: Investing: Riskier than you might think
• Let’s Talk Investing video: Dangerous investments: Don’t go there
• Let’s Talk Investing video: How much investing risk can you stomach?

The first step of portfolio building is to decide on your personal investing goals, short term and long term, and your desired timelines to achieve these goals. Whether it’s saving for your first house, your kids’ education, your retirement or your rainy day fund, you should decide on, and preferably commit to paper or electronic file, your personal financial goals with a timeline for each.

If you want to test out different scenarios to meet a goal such as saving to buy a house, there are calculators available online to help. For example, CIBC Investor’s Edge goal funding calculator lets you experiment with the goal amount, return rates, marginal tax rate, inflation rates, amount already invested and years until money is needed. You can test different retirement savings and post-retirement withdrawal scenarios using The Globe and Mail’s retirement planner .

The next step is to work out your personal risk profile which will help you decide the weighting of asset classes in your portfolio. This means deciding things like the amount of money you are willing to lose in the short term in pursuit of long-term profits. While this sounds difficult, several discount broker websites feature education and tools to help you. Credential Direct has a portfolio planner calculator ; RBC Direct Investing offers an asset mix calculator while iTrade offers an asset allocation optimizer .

Our Online Investing series:

• Rise of the kitchen table traders
• Stop-loss is designed to save your skin
• Five tips for managing your investments
• The rapid rise of an indie brokerage
• Only a group effort can prevent investor fraud
• Like investing, teaching it is best done early, often
• Park your cash here while you learn the ropes