Money MythBuster: 100 minus age = equity

Asset allocation is more than a formula

Ruth Saldanha 22 October, 2019 | 2:32AM

 

 

Mr. Morningstar Money Man: 100 minus age equals equity, which means if you are 30 years old, you take 70% of your portfolio invested in equities and the rest in fixed income. Right? Wrong. Asset allocation is not a formula. It's a highly complex decision that takes into account your personal situation, including, your risk tolerance, financial goals, income, resources, your entire financial picture.

Reducing this process into a formula might not necessarily work for you and can be dangerous. Like this guy allegedly said, everything should be as simple as possible, but not simpler. This myth busted.

About Author

Ruth Saldanha

Ruth Saldanha  Ruth Saldanha is Senior Editor at Morningstar.ca