The “100 minus age” rule has been an oft repeated guideline for investing. According to this rule the result of subtracting your age from 100 shows you how much you should invest in equity. So if you are 30, you should invest 70% in equity.
Experts are, however, no more so sure that this rule applies anymore. According to this rule a 60 year old should invest only 40% in equity. What if the older gentleman actually has no liabilities and has a greater risk appetite?
What should I do:
Your allocation to equity should depend on the riskiness of your financial goals and the time you have to achieve them. So the lesser time you have towards a goal, the more you should think about equity.
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