10 Retirement Pitfalls: Investing Too Conservatively

June 19th, 2007  |  Published in Investing

The general rule is that you should be aggressive when you’re younger and conservative when you’re older. Being too conservative when you’re young doesn’t take advantage of the one asset you are slowly losing, time; by being aggressive, you try to get the high returns while risking some losses. If you are young and your portfolio takes a hit, you have plenty of time to let it grow back upwards. If you’re older and your portfolio takes a hit, you have less time and so you want to minimize the downside.

The rule of thumb for how much of your portfolio to hold in stocks is 120 minus your age, that value is the percentage you should hold. The rest should be in more stable investments such as bonds.

Source: Yahoo Finance

  

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