Since 2009, both the S&P 500 and the US aggregate bond market have performed well. This article will look at the best asset allocation of stocks and bonds by age in detail. I’ve been asset allocation since 1995 and used to work in investment banking from 1999 – 2012. Today, I’m an early retiree who is trying to help as many people as possible reach financial freedom sooner, rather than later.
To determine the best asset allocation of stocks and bonds by age, you should ask yourself the following three questions:
1) What do I think comes next for stocks and bonds?
2) Why are both stocks and bonds at near record highs?
3) As I age, what should my asset allocation be to match my risk tolerance?
In this article, I want to not only show you recommendations of different asset allocations. I want to also teach you the why. The more you can understand why these asset allocations makes sense, the more you can invest with confidence.
Don’t blindly do something without understanding the logic, especially when it comes to investing your money.