Quote:
Originally Posted by J1ceasar
Theres a rule of 100 for investing. Take your age subtracted from 100 the remaining amount is what you can invest in the stock market. Or think of it this way if you lost everything you have invested in the stock market what will you have left to live on comfortably.
While it is true the stock market has averaged about 8% over its life there have been long periods of minimum growth. Well most of us no longer will be going to work there is no true opportunity 2 have wages deposited in the future so risk tolerance is truly what you have to think about
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When most of us only lived to about 65 the rule of 100 made sense but now that we live longer we do need growth and the vast bulk of money earning 2% or so will not cut it. After inflation and taxes that 2% means over time your funds have less value.
Someone 65 will be around another 20 years or more and their funds must last for at least that much time.