Here’s an excerpt from the posting 4 Rules that Can Save You $40,000: A Beginner’s Guide to Investing. Click the title for the full story.
Stocks vs. Bonds: The Rule of Thumb
The simple rule of thumb is 110 minus your age = the percentage of your portfolio that shoul d be in stocks. If you’re 35, this means 110-35= 75% of your portfolio in stocks, and 25% in bonds.
If you have a high risk tolerance, increase that to number to 120 minus your age. So if you have the stomach to withstand more volatile returns, and you’re 35 years old, put 120-35= 85% of your portfolio in stocks, and 15% in bonds.
If your risk tolerance is low, drop the number to 100 … so if you’re 35, 100-35 =65% of your portfolio goes to stocks, and the rest to bonds.
What is your risk tolerance? Take this quiz.
Make Work Optional
Get free updates on building wealth and living to the fullest. Zero spam.