What are some examples of asset allocation models by age?

Let's look at some examples of asset allocation models by age. Using [age minus 20] for bond allocation, a starting age of 20, and a retirement age of 60, a one-size-fits-most allocation would be 80/20. This fits a young investor with a low risk tolerance and a middle-aged investor with a moderate risk tolerance.

What is asset allocation?

Asset allocation refers to the mix of stocks, bonds and other financial instruments in a portfolio. Deciding on your asset allocation is one of the most important decisions any investor makes. But how do you choose the breakdown of which assets — and how much — to put in a portfolio? Source: BlackRock. For illustrative purposes only.

What is a good asset allocation model?

We can divide asset allocation models into three broad groups: Income Portfolio: 70% to 100% in bonds. Balanced Portfolio: 40% to 60% in stocks. Growth Portfolio: 70% to 100% in stocks. For long-term retirement investors, a growth portfolio is generally recommended. Whatever asset allocation model you choose, you need to decide how to implement it.