Asset Allocation for age 48

Reader's Query: Recently a reader asked me that, What should be the Asset allocation for age 48?

Well, according to the Rule of Asset Allocation, “Equity Allocation = 100 – Your Age & Rest in Debt and other Assets”

Some people use the Formula = 120 – Your Age.

So 100 – 48 = 52. So roughly 50% in Equity & rest of he 50% in other Assets such as Debt, Gold, Real Estate…etc….

Another Rule is that MAXIMUM 10% Allocation for Gold. If you don’t want to invest in gold at all than its fine but if you want to invest in it than it should not be more than 10% of the Total Portfolio net worth.

So for the Age of 48 years, your Asset Allocation should be 50% in Equity & rest 50% in Debt, Gold and Real Estate. Many people believe that after the retirement means after the age of 60 years, one should not invest in Equity but rather one should invest in Debt only. But this is the old concept. According to the new concept, to beat the inflation and to cop up with the reducing the purchasing power of Money, one should invest in Equity as long as he/she alives.

So at the age of 60 according to the rule of Asset Allocation, One should invest 40% in Equity (100-60) and 60% in other Assets such as Bonds, Fixed Deposits, Gold & Real Estate.