Portfolio Vs Age - Portfolio and Age Relationship

The age of a person determines what would be the best investment portfolio for his or her future. Whether to invests more in equities and less in fixed income or less in equities and more in fixed income depends on the age of the person.

As a simple rule, the less the age the more risk a person can take because he or she has more years to earn money.

Portfolio Vs Age
The more the age, the less risk a person must take. So, portfolio management depends on age and risk profile. However, one must remember that fixed income cannot compete with ever-rising inflation. It is equities that can compete with the increasing inflation and hence everyone must have some equity in his or her portfolio. Also it is important to diversify fixed income investment to different tools like government bonds, fixed deposits and debentures etc.

Below table will explain how to manage portfolio based on age:


Above 60 40% in Stocks and Mutual Funds
10% in Cash
50% in Fixed Income
50 to 60 50% in Stocks and Mutual Funds
10% in Cash
40% in Fixed Income
40 to 50 60% in Stocks and Mutual Funds
10% in Cash 

30% in Fixed Income
30 to 40 70% in Stocks and Mutual Funds
10% in Cash

20% in Fixed Income
Below 30 80% in Stocks and Mutual Funds
10% in Cash

10% in Fixed Income

Resources & References:


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