'100 minus your age' is the old rule. It's also wrong for most people now living into their 90s. Allocation deserves more thought than a one-liner.
Ask ten experts and you will get twelve answers. The underlying math, thankfully, only has one. '100 minus your age' is the old rule. It's also wrong for most people now living into their 90s. Allocation deserves more thought than a one-liner.
90% of long-term return variance comes from your stock/bond split, not which stocks you hold.
120 minus age in stocks. 30-year-old → 90% stocks. 60-year-old → 60% stocks. Reflects longer life expectancy.
Long-duration bonds can lose 20%+ in a single year when rates rise. Match duration to your time horizon.
Set a target. Drift more than 5%? Rebalance. Forces buy-low-sell-high without thinking.
What about gold or crypto? Cap at 5–10% combined. Diversifier, not core.
Should I time the market? Almost certainly not. Time in the market beats timing the market in every long backtest.
If you only remember one thing from this post, make it that the inputs matter more than the calculator.