5. 100 - Age = Your Allocation to Stocks

More often than not, performance of a portfolio is decided by its asset allocation and not the returns earned. So, it is important for you to make sure that you have a balanced mixture of various financial products in your portfolio. According to experts, you should have an equity amount of - 100 minus your age. So, if you’re about 32, 68 percent of your asset should be equities. As stocks are finicky, at 54, you should not invest more than 46 percent in stocks. So, when you retire, you should not invest more than 30 percent in stocks. This is not a fixed rule but applying it in reality is very easy.