Investing

Rule of 110

The rule of 110 suggests putting a percentage equal to 110 minus your age into stocks, and the rest into bonds.

Formula: Stock allocation (%) = 110 − age

It's a starting heuristic that reflects how time horizon shrinks with age, and with it the ability to recover from a downturn.

It should be adjusted for income stability, available net worth and psychological tolerance; it doesn't replace a full risk-profile assessment.

Put it into practice

Related terms

Risk profile — Risk profile is the level of loss an investor can bear without jeopardizing their goals (capacity) and without selling in a panic (tolerance).
Diversification — Diversification means spreading investments across assets, sectors, countries and currencies whose behavior isn't perfectly correlated.
Rebalancing — Rebalancing is periodically adjusting a portfolio back to its target split between asset types.

Bring it to your own numbers

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Educational content. netclariq does not provide financial, investment, tax or legal advice.