Formula for Asset Allocation according to Age

Asset allocation is the key of successful Portfolio Building. There is a Formula of Asset allocation according to Age. Here is the Formula.

Formula of Asset Allocation according to Age -

- Equity Allocation (%) in Any Portfolio = 100 – Your Age and rest should be in  Debt and other Asset Classes.

Modified Formula of Asset Allocation -

- Equity Allocation (%) in Any Portfolio = 120 – Your Age and rest should be in Debt and other Asset Classes.

So if your age is 20 years today than according to first formula, your Equity Asset allocation in your over all portfolio should be 80% and 20% Asset allocation should be in Debt and other Asset Classes (Gold & Real Estate).

The second formula is more aggressive. And according to this formula, if you are 20 than your Equity Allocation should be 100% and Debt allocation should be 0%. Because 20 is the age which is the Best time of Investing in the stock market because you don’t have any dependants on you.