Recommended Asset Allocation for Young Investors

Posted by Grace under Investing on January 26, 2016

There are many recommended asset allocation you can find internet. Today, let me share to you some suggested ways on how to allocate your assets based on your age and risk tolerance.

The recommended diversification strategy of young investors is different to the asset allocation of a investors age 65. Asset allocation is simple. Asset allocation is easy to understand. You don’t have to be an investment expert to understand what it is all about.

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Should You Follow Recommended Asset Allocation Found Online?

It is up to you if you will follow the recommended asset allocation that you can found on the internet like blogs and forums. However, please be aware that not all suggestions or recommendations should be follow.

When looking for recommended asset allocation, you should consider the following;

  • Investor Risk Profile
  • Investor’s Investment Goal
  • Investor’s Age

Recommended Asset Allocation for Young Investors

Assuming you are an investor age 20 to 30 years old? How should you allocate your assets? How should you invest your money? What are the recommended types of investments for you to make your money grow overtime?

Proper asset allocation will help you know how much percentage of your total assets should invest in a high, moderate or low risks types of investments.

Recommended Asset Allocation for 30 Year Old Investor

Percentage Investment
5% Cash Investment
5% CDs/T-Bills and Short/Medium Term Bonds
40% Equity Mutual Funds and other High-Growth Securities
20% Balanced Mutual Funds and Blue Chip Securities
20% Business Ownership
10% Real Estate Properties and/or Fixed Income Long-Term Bonds
100% Total Investments
  • Low Risk Investments: Cash, CDs/T-Bills and Short/Medium Term Bonds, Real Estate, Fixed Income Long-Term Bonds
  • Medium Risk Investments: Balanced Mutual Funds and Blue Chip Securities
  • High Risk Investments: Business Ownership, Equity Mutual Funds, and other High-Growth Securities

Reference: Making Your Money Work 2, by Francisco J. Colayco, Colayco Foundation for Education, Inc., Anvil Publishing, Inc. 2005-2012, page 150

Do you know any other recommended asset allocation for young investors? Share it in the comment box below. I hope you find this guide useful.

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