Sharing Knowledge in Smallcaps

[BullNBear52]

Last week I attended a bond webinar an d they mentioned the 120 Rule.

What Is the 120-Age Investment Rule?
The 120-age investment rule states that a healthy investing approach means subtracting your age from 120 and using the result as the percentage of your investment dollars in stocks and other equity investments. Any remainder should become investments in low-risk assets, including certificates of deposit (CDs), bonds, Treasury bills and fixed annuities.

For example, if you’re 30 years old, subtracting your age from 120 gives you 90. Therefore, you would invest 90% of your retirement money in stocks and 10% into more consistent financial instruments. This rule creates a portfolio that gradually carries less risk.

On the other hand, if you’re 75, the rule’s formula gives you 45. So, you’d have 45% of your portfolio in stocks and the rest elsewhere.

https://smartasset.com/retirement/what-is-the-120-age-investment-rule

An interesting concept they mentioned in passing.