How do you arrange assets in your portfolio?

How you arrange the assets in your portfolio is called asset allocation. Depending on your age and the number of years you have until you retire, the recommended asset allocation looks very different. Here's a look at asset allocation through life's various stages.

How do you allocate assets to a portfolio based on age?

Others include time horizon, risk tolerance, income, and financial goals. You can allocate assets to your portfolio based on age using the ‘100 rule’ or 120 rule.’ Redefining your asset allocation may be necessary for the event of new information, lifestyle changes, and wrong risk tolerance assessment.

What are age-based asset allocation guidelines?

You may have heard of age-based asset allocation guidelines like the Rule of 100 and Rule of 110. The Rule of 100 determines the percentage of stocks you should hold by subtracting your age from 100. If you are 60, for example, the Rule of 100 advises holding 40% of your portfolio in stocks.