[This post is part of the Financial Rules of Thumb series.  Check out the rest here!]

Today’s rule of thumb is:

“100 minus your age equals the allocation you should have to equities in your portfolio”

The Upperline:  It’s far more important to know how much risk you’re comfortable with, than to use this as a guideline.

Test Quote Style — A creative man is motivated by the desire to achieve, not by the desire to beat others.

Test Quote Style — A creative man is motivated by the desire to achieve, not by the desire to beat others.

The strategies themselves aren’t important.  The goals that the strategies help you accomplish for your life are all that matters.

Bottom line:  Don’t use a rule of thumb to build your portfolio.  Take the time to understand yourself, your goals, and use that information to help you create a plan that can achieve your goals in a way that you can live with throughout all market cycles.