Beware Conflicting Opinions On Your Asset Allocations



Search “how to allocate your portfolio” on your favorite search engine, and you’ll be treated to more than 17 million results. If you looked at each one of those search results for a second, it would take you almost 200 days to get through all of them.

Even if you did have 200 days, you’d still have to determine which opinion makes sense for you and your investments.

Many have heard any one of a few old rules of thumb on how your portfolio should be allocated. Some old adages revolve around your age: for example, one common tenet is to take 100 minus your age to determine your equity component.

Based on that rule, if you’re 35, then you should have 65% in stocks and 35% in bonds. If you’re 65, then you should have 35% in stocks and 65% in bonds. A modern version of this axiom says to start with 120 instead of 100.

While there is some truth behind these old-fashioned ideas, they’re not a fit for everyone.

In general, younger investors have a greater capacity for risk, but not all the time. In general, older investors need to lower their risk and focus on stability – but beware investing allocations that use the term “in general.”

In reality, your capacity to take on risk depends on your financial situation. When you’re deciding how aggressive or conservative to be, age is one of many factors to consider. But there are plenty more considerations: how much you’re investing, how long until you need to access your investments, whether you need income from the portfolio, how worried are you when the markets go down, your goals with assets…the list goes on and on.

Who do you listen to? Ask yourself:

  • Are you considering key factors when developing your asset allocation?
  • Does your portfolio work with or against your financial plan?
  • Does your advisor use a cookie-cutter approach based on an “old reliable” rule of thumb?

If you need help, Annex Wealth Management can assist you in identifying and defining your personal asset allocation. We’ll ask important questions, listen closely and rely on our expertise and technology to have your asset allocation align with your financial plan and your risk capacity.


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