This Is the Big One
Here's a secret Wall Street doesn't advertise: picking stocks matters way less than how you divide between stocks, bonds, and other stuff. Research shows allocation drives 90%+ of your results. Nail this and the rest is details.
The Building Blocks
Stocks: ownership in companies. Higher potential returns, more volatility. Bonds: loans to governments or companies. Steadier but usually lower returns. Cash: safety and flexibility. Beyond these, you can add real estate, commodities, maybe crypto if you're feeling adventurous. Each behaves differently.
Finding Your Mix
Old rule of thumb: subtract your age from 110, that's your stock percentage. A 30-year-old? 80% stocks. But this is just a starting point. Depends on your goals, when you need the money, how you'd handle a 40% drop. There's no universal right answer.
Don't Forget the World
America isn't the whole market. International stocks give you exposure to different economies with different cycles. Consider 20-40% of your stock allocation outside the US. When America zigs, sometimes others zag.
What Matters
- Allocation matters more than individual picks
- Mix different types of investments
- Adjust based on your age and goals
- Go global—don't just own US stocks
- Rebalance when things drift too far