The 120 rule of investing is a popular benchmark for investing. It was first popular in the late 1980s and 1990s. The idea was that you should invest seventy-five percent of your savings in stocks, resulting in a ninety percent return over the long run. Today, however, the 120 rule is outdated, and the world is moving towards more diverse and balanced investments.
The 120 minus your age rule of investing
The 120 minus your age rule of investing is a common rule of thumb that can help investors decide how much of their portfolio should be allocated to stocks and bonds. In essence, the rule states that you should invest a certain percent of your age in stocks and other equities and invest the rest in safe money products, like bonds. This rule is very useful in determining asset allocation, but you should keep in mind that your individual circumstances and risk tolerance may determine whether the 120 minus your age rule is a good fit for you.
One important caveat with the Rule of 120 is that you should never invest all of your money in stocks. The Rule of 120 is particularly useful for investing for retirement, …