How Your Asset Allocation Changes as You Do

An opportunity to recap on Morningstar's guidelines as to asset allocation at various stages of the investor's life

Holly Cook 23 September, 2011 | 1:54PM
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Earlier this year Morningstar supported Financial Planning Week, hosted by the Institute for Financial Planning. As part of our ongoing efforts to educate investors on portfolio planning and asset allocation, Brook Sweeney, investment consultant with Morningstar Associates Europe, provided asset allocation guidelines for individuals who’ve successfully managed to plan their finances and want to put their hard-earned cash to good use. In accordance with Financial Planning Week’s five ‘life stages’, Sweeney first addressed those in their late teens through to their late 20s, who for this purpose we tared with the same brush and called the ‘young, free and singles’. He next outlined why little need change when you approach your thirties, though 'making commitments' may mean your saving ans spending habits change. Young families, again, need not necessarily make dramatic changes to their asset allocation as the goal--a financially-independent retirement--is still some way away, but as the big 5-0 birthday draws near pre-retirees may want to carry out some portfolio tweaks. Finally, for those in retirement, and hopefully enjoying this period for several decades, Sweeney outlines some key changes that retirees may need to consider.

Catch up on all five 'life stages' below. The final installment, that aimed at those in retirement, also contains a summary of Sweeney's broad stock/bond mix guidelines.

Asset Allocation for the 'Young and Carefree'

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Holly Cook

Holly Cook  is Manager, Morningstar EMEA Websites

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