4 Asset Allocation Rules You Should Know by Heart
Your assets can come in a few different forms -- stocks, bonds, and even cash, to name some popular ones. But how much of your money should you allocate to each category? The ultimate answer depends on your personal goals (meaning what you want to use that money for) and appetite for risk, but here are a few general rules that will help you narrow down your choices.
The stock market is extremely volatile, which means that if you buy stocks and then need to sell them within a few years, you'll risk taking losses. That's why it's generally not a good idea to invest money you plan to use within seven years in stocks. Though the market has a solid history of rebounding from downturns, that may not be a long enough window to see that recovery through without taking losses.
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Source Fool.com
