answersLogoWhite

0


Best Answer
Answer

General Rule of Thumb: 100 - Your Age = Percentage Investment in Stocks.

Why? Over long periods of time, stocks return more than bonds. On average, stocks have returned 12.00% vs 5% on long-term government bonds (loans > 5 years).

So, the younger you are, the more time you have for the stock market to cycle through upturns and downturns, and allow you to share in historically attractive returns.

Note this is a rule of thumb for long-term investing, and this is exactly why your time horizon matters so much when you think about where to put your money.

Hypothetical $1,000 Asset Allocation for a 30-Year-Old:

  • 70% : $700 in Stocks (Equities)
  • 30% : $300 in Government or Highly Rated Bonds

Of course, you need to decide if the recommended allocation meshes with your personal risk tolerance and market views.

This recommendation is the same as saying you that yoou should look at your timeline for the investment: the longer you invest, the more time you have to ride out market volatility, so you can increase the amount of riskier assets you hold, such as stocks.

If you want to trade stocks efficiently you should learn the basics of trading. This website will help you out. http://www.stocks-simplified.com

User Avatar

Wiki User

โˆ™ 2013-03-13 21:20:16
This answer is:
๐Ÿ™
0
๐Ÿคจ
0
๐Ÿ˜ฎ
0
User Avatar
Study guides
๐Ÿ““
See all Study Guides
โœ๏ธ
Create a Study Guide

Add your answer:

Earn +20 pts
Q: How should you split your investment portfolio between stocks and bonds?
Write your answer...
Submit
Related questions

What is meant by the term portfolio investment?

Portfolio investment refers to investments in foreign countries that are withdrawable at short notice, such as investment in foreign stocks and bonds.


If you are a member of an investment company how can you get stocks in your portfolio?

The same way the rest of us do: You buy them.


What kind of stocks should one put in a diversified stock portfolio?

It is important to have quite a few different kinds of investments (such as stocks, bonds, and real estate) in an investment portfolio, in order to protect against loss. If one is only concerned with diversification of stocks, however, then it is imperative to have a variety of stocks. In order to be diverse, one should include stocks from different industries, from companies of varying sizes, and possibly even from companies in different countries.


Should you buy stock in General Motors?

Different people have different investment needs, but a diversified stock portfolio should have a few trustworthy big board stocks, and GM would not be a bad choice.


What is a stock portfolio?

A stock portfolio is all the stocks that you own. I would venture to say that if you had one stock in any company, you would have one stock in your portfolio. If you had 5 different stocks, you would have a total of 5 stocks in your portfolio.


What is equity exposures?

Equity exposures refer to measurements used for investment portfolios. These explain the investment amounts in a portfolio used for different items like stocks and equity compared to a fixed income.


There are 20 stocks in portfolio with a total beta of 1.65 you sell 5 stocks from portfolio with a total beta of 2.0 each stock weighs 5 after selling the 5 stocks what is the beta?

Say, you hold 1,000 shares of Bharti Airtel, 300 shares of Infosys, 500 shares of Reliance Industries and 700 shares of Hindustan Unilever. In order to completely hedge the portfolio, you need to arrive at the total beta value of your holdings. To begin with, get the beta of individual stocks against the index (available in NSE monthly newsletters). Now, multiply individual beta value of stocks to the current value of investment in that stock. Then, divide the sum of all these numbers with the total value of your investment (current) to arrive at the overall beta of your portfolio.


The Big Bull investment club has a portfolio that contains only two stocks At the end of the year stock A had gone up 8 percent and stock B had gone up 10 percent The total portfolio which had a?

4000.00


What is the purpose of portfolio management software?

Portfolio management software is a type of software used by medium and large-scale businesses. This software's purpose is to organize and keep track of the investment portfolios of a given business, such as stocks and loans.


What type of stocks should I buy in Canada?

Purchasing stocks is always a risky, and tricky investment. Most first time buyers should contact an investment advisor. Some well known stocks are those of large chains, such as grocery stores and retail stores.


What investment has the lowest risk and lowest rate of return between savings bonds stocks collectibles or real estate?

stocks


Diversify your Portfolio?

Investment is one of the key methods for increasing wealth. One option to consider is gold, which has been steadily increasing in value and is poised to remain strong on the market. An investment in gold would be a wise choice as the foundation for a solid portfolio. While stocks and bonds may rise and fall, gold is the "gold standard" for investment when considering stability and overall value.


How can one get rich from buying penny stocks?

Penny stocks are cheap, because that's their value. However, many investors don't realize that penny stocks can grow to become high in value. The next time you create an investment portfolio, throw in a few penny stock and you will be surprised on the growth.


Which is more profitable keeping money in banks or investing in stock market?

Depends on your capacity to absorb risk. Investment in stocks will yield better returns over a long period. The draw back of stock investment is either you need a good, capable advisor or should have time to monitor your portfolio in a professional manner


Should you invest in stocks or bonds?

A balanced investment portfolio would include both stocks and bonds as well as cash and mutual fund. The mix would depend on your investment objectives and tolerence for risk. If you had to pick just one investment, it would depend on how liquid you want your funds and how much risk you are willing to take. Stocks are riskier and therefore give a higher expected return in the long term. Also it is important to take into consideration your stage in life, older folks, with little income, should stay conservative and stick to bonds, while younger people can assume more risk.


Is stocks of other corporations included in the balance sheet investment account?

Yes investment account in balance sheet shows the investment in stocks of other companies only.


What areas does commonwealth securities cover?

Commonwealth Securities Ltd is Australia's largest online stockbroker and covers all aspects of investment and portfolio management from cash and stocks to managed funds.


What has the author Matt Seto written?

Matt Seto has written: 'The whiz kid of Wall Street's investment guide' -- subject(s): Stocks, Investments, Portfolio management


How long did it take to have full return of investment?

It depends on what you are investing in. If you're not a professional investor it should take about 5 years to double your investment in stocks.


What does it mean to diversify your accounts?

Different kinds of stocks in your portfolio.


What is pdf in the stock market?

PDF in the stock marketworld is about your stock market profile. More information on the stock market and investment related terms can be referred to your portfolio.


What is a diverse investment portfolio?

An investment portfolio can only be considered "diverse" if it consists of multiple different types of investments. When thinking of investments, the most common types that come to mind are stocks, bonds, and mutual funds. It's important not to forget to have other types in your portfolio. For example, do not forget about cash investments. Usually shorter term investments, or something as simple as putting money in a savings account, it's important to keep a small amount invested in cash.


What are ETFs in connection with the Canadian stock market?

An ETF is an Exchange Traded Funds. It allows an investor to purchase a large portfolio of stocks, diversifying an investment. Many of these securities are available on the Canadian stock exchange.


What is the dominance principle?

A portfolio manager who examines the expected rate of return & risk statistics for many bonds & stocks may select assets worthy of investment by using a dominance principle


Why are preferred stocks a high yielding investment?

Preferred stocks are a much better investment because the return is much greater then that of other stocks. Although they are often long-term, the yield is often worth it!