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I'm trying to come up with a simple lifetime financial asset allocation strategy. My original one was: Take your age, subract 10, and put that much in FIIs (fixed income investments), and the rest in equities (US stocks, foreign stocks, a dash of REITs)

But I want a strategy I would actually follow, not just one that sounds good. And the fact is at age 31, and with interest rates so low, I am not going to put 21% of my wealth in FIIs.

So my new thought is, assuming a retirement age of 65:

Under age 55: 100% stocks
At age 55: Switch to 75% stocks, 25% FIIs
At age 60 Switch to 50% stocks, 50% FIIs

And remain 50/50 until death.

OTOH, Dave Braze's take has always been 5 years of net living expenses in FII at retirement and the rest in stocks. See, most recently:

You can factor interest rates into this as well- if long term bonds were yielding a real 10%, for example, I'd happily own some FIIs.

There needs to be an asset allocation strategy that the average person can use. It seems most people either follow their own muse (tech stocks when the market is high, cash when it's low), or fall prey to stockbrokers or insurance salesmen who don't have their best interest at heart.


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