2998: The “Minus Your Age” Rule of Thumb for Asset Allocation by Craig Stephens of Retire Before Dad

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16d ago 12:12

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Episode 2998:

Craig Stephens explores various "minus your age" rules for determining a balanced stock-to-bond portfolio allocation. By adjusting the formula constants (100, 120, 130, or up to 140), investors can align their strategy with personal risk tolerance and investment horizons. With a flexible and data-backed approach, Stephens emphasizes that these rules of thumb serve as guidelines rather than strict laws, highlighting the importance of adjusting allocations over time as circumstances change.

Read along with the original article(s) here: https://www.retirebeforedad.com/minus-your-age-rule-asset-allocation/

Quotes to ponder:

“Personal finance is littered with rules of thumb but devoid of concrete laws.”

“Age should influence stock-to-bond allocation, and we should increase bond holdings as we age.”

“Even if you reach your target asset allocation, the next day it will change when the market opens.”

Episode references:

The Little Book of Common Sense Investing by Jack Bogle: https://www.amazon.com/dp/0470102101

Vanguard Research: https://investor.vanguard.com

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