Answer 8 questions about your age, time horizon, risk tolerance, and income stability to get a personalized portfolio allocation recommendation. This quiz uses established financial planning principles to suggest a starting stock/bond/cash mix.
1. How old are you?
2. When will you need this money?
3. Your portfolio drops 25% in one month. You would:
4. How stable is your income?
5. Do you have an emergency fund (3-6 months expenses)?
6. Your primary investment goal is:
7. Your investment experience level:
8. For the best return, you'd accept:
Understanding Portfolio Allocation
Asset allocation is the single most important investment decision you'll make — research shows it accounts for over 90% of long-term portfolio performance variation. Getting the right mix of stocks, bonds, and cash for your risk tolerance and time horizon matters more than picking individual securities.
Common Allocation Profiles
Conservative (20-40% stocks): best for near-retirees or low-risk-tolerance investors. Moderate (40-60% stocks): balanced growth and stability. Growth (60-80% stocks): long time horizon, higher risk tolerance. Aggressive (80-100% stocks): young investors with decades to recover from downturns.
FAQ
What is asset allocation?
Asset allocation is how you divide your investment portfolio between different asset classes — primarily stocks, bonds, and cash. Stocks offer higher growth with higher volatility; bonds provide stability and income. Your allocation should match your risk tolerance, time horizon, and goals.
What is the 60/40 portfolio?
The 60/40 portfolio (60% stocks, 40% bonds) has been a traditional balanced allocation for moderate-risk investors. It historically provided solid returns with less volatility than a 100% stock portfolio. In recent years, some advisors have moved toward 70/30 or 80/20 for long-term investors.
How often should I rebalance my portfolio?
Most financial advisors recommend rebalancing annually or when allocations drift more than 5-10 percentage points from targets. Rebalancing too frequently incurs trading costs and taxes; too rarely allows allocations to drift far from your risk profile.
Should I change my allocation as I age?
Generally yes. A common rule of thumb is to hold your age in bonds (e.g., 30-year-old = 30% bonds). More modern approaches suggest 110 or 120 minus your age in stocks. Target-date funds automatically shift to more conservative allocations as you approach retirement.