When planning your retirement, would it help you to see what portions of your savings and investments you might want to devote to international stocks, small-cap and large-cap domestic stocks, or bonds and bills?
The folks at Fulcrum Inquiry thought so. The handy visual calculator they've created asks you for your age and your risk score, then gives you a little quiz to help determine your risk tolerance. After that, voila! -- you'll be able to see your recommended asset allocation.
If you find yourself balking at its recommendations, that's fine. There's no single perfect allocation for you -- this is simply one informed guess. Still, the calculator's worth a try. You might not like the idea of investing in bonds, given their historically low returns compared to stocks. But as we get older, a bigger proportion of bonds can do our portfolios some good.
You might also be uneasy imagining a big chunk of your portfolio entirely in stocks, but remember that over long periods, stocks tend to perform much better than bonds. Even if you're 60 years old now, you may well live to age 90. Why not have a good chunk of your nest egg -- at least, the money you don't expect to tap for 10 to 15 years -- in the stock market?
For conservative stock investors, prominent blue chips can serve you well, often growing steadily over decades. Coca-Cola
Don't let allocation decisions seem too complex, either. You can invest in each of the main asset categories via simple index funds.
We'd love to help you with your retirement planning. Our Rule Your Retirement newsletter service distills what you really need to know into a manageable volume each month. A free trial will give you full access to all past issues, allowing you to gather valuable tips, and even read how some folks have retired early and well. It regularly offers recommendations of promising stocks and mutual funds, too.
