Comments on: The 120 Minus Your Age Stock Allocation Formula

By: Need Help Investing - Page 3 - The Warpath

Need Help Investing - Page 3 - The Warpath — Fri, 12 Mar 2010 19:39:08 +0000

[...] your 401K, that you focus on as a young person saving for the future. Thanks! Follow the "120 Minus Your Age" rule and you'll be alright. __________________ If the Redskins cut a kicker don't never [...]

By: mlgreen1976

mlgreen1976 — Wed, 09 Sep 2009 19:11:18 +0000

It’s really a relative decision. There is no set formula as to how much a person should invest because there are always different financial factors affecting individuals. I personally focus my attention on passive businesses outside of the stock market, but when I see a stock in a company that I am passionate about, I don’t mind investing in it. For example, I am looking at a company called Mentor Capital. It is the primary funding source for a biotech company with FDA clinical trials underway for a new breast cancer treatment. Mentor Capital has a 20% claim in the biotech company and the stock is currently only $2.65/share. Because I have a soft spot for what the biotech company is doing, and I know that if the treatment hits the market there is the potential for the value of the stock to climb dramatically, I don’t mind investing my money in such a company.

By: Everything You Ever Wanted To Know About Asset Allocation | Moolanomy

Everything You Ever Wanted To Know About Asset Allocation | Moolanomy — Fri, 05 Sep 2008 13:02:21 +0000

[...] The 120 Minus Your Age Stock Allocation Formula at No Debt Plan [...]

By: MITBeta @ Don't Feed The Alligators

MITBeta @ Don't Feed The Alligators — Sat, 23 Aug 2008 13:40:10 +0000

The reason for the switch to bonds as you age is to take your profits from your stocks over the years and move them into something safe. When you retire, you should still have some exposure to stocks, but not nearly the 70% some have suggested here.

@LivingAlmostLarge:

You’re supposed to eat into the principal in retirement and die poor. That’s the whole point of the game. Also, have you checked the markets lately? Who’s making 8% this year? This is precisely why if you are relying on your investments to provide income on which to live, you better make darned sure that those investments are safe.

By: Housing, Retirement, Investing… and Michael Phelps!

Housing, Retirement, Investing… and Michael Phelps! — Wed, 20 Aug 2008 13:29:58 +0000

[...] The 120 Minus Your Age Stock Allocation Formula Here’s a quick rule of thumb to determine how much you should hold in stocks versus bonds. At age 29, it ends up pretty close to our current allocation. [...]

By: Livingalmostlarge

Livingalmostlarge — Fri, 15 Aug 2008 15:43:51 +0000

Not necessarily, it doesn’t matter what the number is. What matters is how you draw on it and how long you want it to last. With a 4% withdrawal and assuming you can make 8% with a 70/30 mix you’d be in good shape. With 4% withdrawal and a 5% return you might eat into principal.

By: Kevin

Kevin — Fri, 15 Aug 2008 14:08:33 +0000

Yea, but Buffett is the second richest man in the world and all he does is work on his investments. He’s a professional.

For the rest of us that may not be the best idea, no?

By: LAL

LAL — Thu, 14 Aug 2008 21:42:17 +0000

I like aggresive moves and buffet still has a very aggressive personal portfolio. I think something like 70/30 in retirement. His take is that it depends on the person, amount to live on, and what you have saved. Also if you have a pension there is less risk.

By: Kevin

Kevin — Thu, 14 Aug 2008 14:46:09 +0000

@LAL: I don’t have a set percentage in my head. 70/30 would seem right getting closer to retirement. As Matt noted, it depends on when you’re retiring and the size of the portfolio.

For example, Suze Orzman has something like 90% of her investments in bonds rather than stocks. Why? Because it’s millions of dollars and she is comfortable with just living off the smaller returns.

By: Matt

Matt — Wed, 13 Aug 2008 04:14:55 +0000

As long as you’re in decent health and plan on working into your 60s, there is little worry of ignoring bonds all together until you are 40. The only caveat would be maintaining a stable emergency fund.

Even when you hit 40, I would suggest moving into the higher risk bonds unless your investments have done phenomenally well or you choose to take early retirement.

Therefore, my vote says the old “age & asset allocation” theory is purely academic and of little value.