But there are two key reasons a portfolio's asset allocation can be too risky. The first is if the portfolio is so volatile that the investor could be inclined to retreat to a more defensive position at an inopportune time. The second is if the portfolio's asset mix exposes it to violent swings in value (especially downward) when the investor is getting close to needing the money. Circumventing that risk is the key reason that most retirement portfolio "glide paths" begin to skew more bond- and cash-heavy for people in their 50s, 60s, and beyond. Morningstar's X-Ray tool can help you see your portfolio's true asset allocation. 

Question 3: Will inflation take a big bite out of returns?

This risk factor goes hand-in-hand with the portfolio's asset allocation. Inflation isn't generally a big deal for portfolios with high equity weightings; over long periods of time, stocks will usually deliver a return that's comfortably above inflation, and when inflation is on the move, stocks are often trending up, too. But inflation risk looms large for portfolios with sizable allocations to bonds. Because bonds' income is what it is, regardless of inflation, it will buy less and less if the costs of goods and services trend up. Thus, bond-heavy investors should work hard to ensure that their portfolios include ample exposure to investments with the ability to keep up with, if not out-earn inflation, including stocks and Treasury Inflation-Protected Securities, which have a built-in hedge against inflation. This article details some of Morningstar's favorite inflation-fighting investments.

Question 4: Is the portfolio riding on a single outcome?

Stocks? Check. Bonds? Check. All-weather portfolio? Not so fast. Even portfolios that are dispersed across these two major asset classes may not be all that well-balanced. That's because lower-quality bond types respond to the same forces that stocks do--specifically, the overall health of the economy. That's fine as long as GDP growth is increasing and unemployment is on the decline. But when investors are feeling skittish about the economy, they tend to dump credit-sensitive bond types right along with their stocks. In the financial crisis, for example, categories like high-yield, bank-loan, and emerging markets bonds all tumbled, because investors worried about the creditworthiness of their issuers in a weakening economy. These bonds' losses weren't as high as equities, but nor did they provide any ballast for investors' depressed equity holdings. Thus, another check on your portfolio's overall risk level is the complexion of your fixed income holdings, as discussed. Even though credit-sensitive bonds typically provide better yields, high-quality bonds are the better way to diversify stock-heavy portfolios.

Question 5: Is the portfolio overly concentrated?

Packing too much into an individual holding won't be a big risk for most for most mutual fund or ETF investors, assuming they don't go overboard with a single concentrated fund or two. Rather, it's more of a risk factor for investors who own at least some individual securities. Newer investors often start out with just a small handful of stocks; sometimes they get lucky, but oftentimes they learn the hard way about the dangers of underdiversification. Concentration risk can be particularly problematic for holders of company stock, as Morningstar Investment Management's head of retirement research David Blanchett discussed.

Question 6: Are you a risk factor?

Last but not least, one of the biggest risk factors for many portfolios doesn't lurk inside. Rather, it's the chance that despite your well-laid plans, you'll undermine your results by falling into the fear-greed cycle, or one of the many other behavioral traps discussed in this article. Such mistimed buying and selling can exact an even bigger toll than investment fees over time. We're all wired differently as investors, so unfortunately there's no one-size-fits-all way to short-circuit behavioral risk factors. However, a few simple steps can help. First, follow Jack Bogle's advice and "don’t peek" at your portfolio or its value; assuming the plan you started with was reasonable, a policy of benign neglect will tend to beat one that's overly busy. Second, consider an all-in-one investment type that allows you to be truly hands-off. While it's still early days for target-date funds, Morningstar's investor return data paint a promising picture of investors' propensity to use such funds well--that is, they tend not to jump in and out of them so they're able to take home a good share of their returns. Not only does such a program instill discipline in your saving and investment habits, but it creates barriers that you'll need to jump over if you decide you want to stop investing when the market gets rough.