For advice on how to fold those disparate investments into your asset-allocation plan, see below . The mix you derive after running through the worksheet is not meant to be set in stone. The more experience you get investing, the more you'll be able to fine-tune your investments to fit your needs and investment style. The longer you have to save and invest, the less you have to cut back your exposure to equities. Over time spans of 20 years or more, the ups and downs of global stock markets always favor the ups.
Average equity returns eventually leave bond and cash returns in the dust.
As you age, equity strategies remain an important part of wealth building. But wealth preservation becomes increasingly important as you near retirement. Most people find it a lot easier to accept extra risk if they have a steady flow of new savings each year. That's because new money gives you the chance to make up for losses if your portfolio takes a hit. It also makes it easier to readjust your allocation.