What should a 70-year-old's asset allocation be?

According to the popular "rule of 110," a 70-year-old should have about 40% of their portfolio in stocks or stock-based funds, with the other 60% in fixed income investments like bonds.

What is the average return on a balanced portfolio?

The average return on a portfolio depends on the particular investments chosen, such as individual stocks versus ETFs and mutual funds. But in general, a balanced portfolio can be reasonably expected to deliver 7% to 8% annualized returns over the long term.

What is the best month to rebalance your portfolio?

There's no ideal month to rebalance your portfolio, but it's worth noting that selling high-performing investments may have tax implications.

What is the best portfolio balance by age?

The popular "Rule of 110" states that subtracting your age from 110 helps determine the proper allocation to stocks and stock-based funds, with the rest in fixed-income investments like bonds. For example, a 50-year-old should have about 60% of their portfolio in stocks and 40% in fixed income.

What happens if you don't rebalance your portfolio?

If you don't rebalance your portfolio, certain investments or asset classes can come to make up too much of it. For example, as stocks rise in value over time, a stock-bond allocation can become unbalanced.

Balancing Your Portfolio: How, When, and Importance

Here's what it means to construct a balanced portfolio and how to make sure your portfolio stays that way.

By Matthew Frankel, CFP – Updated May 2, 2026 at 1:41 AM EST | Fact-checked by Frank Bass

Key Points

Balancing your portfolio aligns it with your risk tolerance and goals.
Rebalance by selling or buying assets to maintain your risk level.
Regular rebalancing helps avoid emotion-driven investment decisions.

Balancing your portfolio means constructing a portfolio that aligns with your risk tolerance and investment goals. But it isn't enough to just "set it and forget it." You also need to make sure your portfolio stays balanced.

The process of maintaining your portfolio's desired allocation is known as rebalancing.

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Rebalancing a portfolio FAQ

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About the Author

Matt Frankel, CFP, is a contributing Motley Fool stock market analyst specializing in the real estate and financial sectors. Prior to The Motley Fool, Matt taught high school and college mathematics. He holds a bachelor’s degree in physics from the University of South Carolina, a master’s degree in mathematics from Nova Southeastern University, and a graduate certificate in financial planning from Florida State University. He won a SABEW award for coverage of the 2017 Tax Cuts and Jobs Act. He is also regularly interviewed by Cheddar, Globe St, The National Desk, and other TV networks and publications for his real estate, financial, stock market, and investing expertise.

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Matt Frankel, CFP has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool has a disclosure policy.

We're generally fans of the second option, since rebalancing by contributing new funds lets you leave your winners alone to (hopefully) continue outperforming. However, this might not be practical in all cases -- for example, if your IRA is out of balance, your ability to add new money is limited by the annual contribution limit.

Building a balanced portfolio

There's no perfect way to construct a properly balanced investment portfolio. We'll discuss a popular asset allocation rule of thumb in the next section, which will help you determine how much of your portfolio should be invested in bonds and stocks.

Within those two categories, there are a lot of different directions you can go. Do you want to invest in individual stocks, exchange-traded funds (ETFs), or mutual funds? Should you buy individual bonds like Treasuries or stick with a bond fund?

The point is that portfolio balancing means something different to different investors. For example, I invest in individual stocks primarily, but don't like to have more than 5% of my portfolio in any single investment. For example, when my Apple (AAPL +1.18%) investment soared a few years ago, I had to sell some to rebalance my portfolio.

Balanced Investment Strategy: When to Rebalance

Here's what it means to construct a balanced portfolio and how to make sure your portfolio stays that way.

Key Points

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Rebalancing a portfolio FAQ

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Rebalancing a portfolio FAQ

What should a 70-year-old's asset allocation be?

What is the average return on a balanced portfolio?

What is the best month to rebalance your portfolio?

What is the best portfolio balance by age?

What happens if you don't rebalance your portfolio?

Why is balancing and rebalancing a portfolio so important?

Determining how a balanced portfolio looks for you

When should you rebalance your portfolio?

Related investing topics

One big advantage of portfolio rebalancing for long-term investors

FAQ

How to rebalance your portfolio

Building a balanced portfolio