Asset allocation by life stage

Asset allocation — how you split money across asset classes like fixed income, equities, real estate and international assets — drives most of your long-term result, far more than picking individual investments. The right mix changes as you move through life.

Why allocation dominates

A portfolio's behaviour is mostly determined by how much is in risky vs safe assets, not by which stock or bond you chose. Get the allocation roughly right and you are most of the way there. Diversification across uncorrelated assets reduces risk without necessarily reducing expected return — the closest thing to a free lunch in investing.

A life-stage sketch

These are illustrative, not prescriptions — your profile and goals override any template:

• 20s–30s (accumulation) — long horizon, so a larger tilt to growth assets (equities, including international) is defensible; volatility is tolerable because there is time to recover.
• 40s–50s (consolidation) — gradually increase fixed income and diversification as goals near; protect gains while still growing.
• Near and in retirement (preservation) — shift toward stability and income, prioritizing capital preservation and predictable cash flow, while keeping enough growth to outpace inflation over a long retirement.

Rebalancing

Over time, winners grow and your mix drifts from target. Rebalancing — periodically trimming what has grown and topping up what has lagged back to your target weights — keeps risk in check and quietly enforces "buy low, sell high." Once or twice a year is usually enough.

There is no single correct allocation. Anchor it to your investor profile, your goals and horizons, and review it as life changes. When in doubt, a qualified, fee-transparent advisor can help you set it.