There is a simple rule of thumb to figure out how much to invest in stocks, subtract your age from 100–so a 45-year-old would put 55% (100 minus 45) in stocks. However, simple rules are only base guidelines and won’t help most investors meet their goals. Instead, decide what return you need to reach your goal and how much volatility and fluctuation you can bear. Then create an asset allocation that has consistently produced that return over long periods of time. The wealthier you are, the more conservative you can afford to be.
Under 30
Investment Allocation.
Equity (Stocks, Funds) – 75%
Bond/Income (Bonds, Funds) – 5%
Other (REITs, Commodities) – 10%
Cash (Money Market and CDs) – 10%
30 to 39
Equity (Stocks, Funds) – 70%
Bond/Income (Bonds, Funds) – 10%
Other (REITs, Commodities) – 10%
Cash (Money Market and CDs) – 10%
40 to 49
Equity (Stocks, Funds) – 65%
Bond/Income (Bonds, Funds) – 15%
Other (REITs, Commodities) – 10%
Cash (Money Market and CDs) – 10%
50 to 59
Equity (Stocks, Funds) – 45%
Bond/Income (Bonds, Funds) – 35%
Other (REITs, Commodities) – 5%
Cash (Money Market and CDs) – 15%
60 and Up
Equity (Stocks, Funds) – 35%
Bond/Income (Bonds, Funds) – 40%
Other (REITs, Commodities) – 5%
Cash (Money Market and CDs) – 20%
Portfolio Breakdown:
This area will be unique and designed specifically for each individual investor based on their investment goals, personality, character, investment knowledge, and risk tolerance. You should work with a registered investment adviser and manager to determine your investment goals, risk tolerance, and asset allocation strategy.
Earnings and Commitments at Different Life Stages.
Equity (Stocks, Funds)
Mid Caps
Small Caps
International
Bond/Income (Bonds [ST, INT, LT], Funds)
Government
Inflation-Protected
Municipal
Corporate
High-Yield
Floating Rate Notes
Foreign
Other
REITs
Commodities
Cash
Money Market Accounts and CDs
