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Your asset allocation isn’t set-and-forget. It evolves with your life 👇
Asset allocation is how your money is divided between different types of investments, mainly growth assets like equities and more stable assets like bonds.
The fundamentals:
📈 Equities have historically offered higher potential growth, but with bigger swings along the way
🛡️ Bonds have historically been less volatile, but with lower potential returns
⏳ Your time horizon is key. The longer until you need the money, the more time you have to ride out downturns
🧠 Risk capacity (what you can afford to lose) and risk tolerance (what you can stomach) are not the same thing
Why it changes with age:
Earlier in life, you have more time to recover from falls in the market. As you get closer to needing the money, a big drop matters more, so many people gradually shift towards lower-risk assets. This is often called a “glide path”.
There’s no universal split. It depends on your goals, timeline, circumstances and how you’d react to a 30% fall.
Save this and send it to someone who’s never thought about their allocation, follow @michelle.huangyy for more financial education.
⚠️This is general education, not personal advice or a recommendation. Capital at risk. The value of investments can go down as well as up, and you may get back less than you invest. Past performance isn’t a guide to future returns.
#investingmadesimple #assetallocation #etfinvesting #personalfinanceuk #investingforbeginners
Asset allocation is how your money is divided between different types of investments, mainly growth assets like equities and more stable assets like bonds.
The fundamentals:
📈 Equities have historically offered higher potential growth, but with bigger swings along the way
🛡️ Bonds have historically been less volatile, but with lower potential returns
⏳ Your time horizon is key. The longer until you need the money, the more time you have to ride out downturns
🧠 Risk capacity (what you can afford to lose) and risk tolerance (what you can stomach) are not the same thing
Why it changes with age:
Earlier in life, you have more time to recover from falls in the market. As you get closer to needing the money, a big drop matters more, so many people gradually shift towards lower-risk assets. This is often called a “glide path”.
There’s no universal split. It depends on your goals, timeline, circumstances and how you’d react to a 30% fall.
Save this and send it to someone who’s never thought about their allocation, follow @michelle.huangyy for more financial education.
⚠️This is general education, not personal advice or a recommendation. Capital at risk. The value of investments can go down as well as up, and you may get back less than you invest. Past performance isn’t a guide to future returns.
#investingmadesimple #assetallocation #etfinvesting #personalfinanceuk #investingforbeginners
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