Is Rule of 100 Investing Strategy Still Relevant?
Rule of 100 has widely been used to determine the percentage of asset allocation into stocks by subtracting your age from 100. If you are 30 this year, then 70% (100-30) allocation into stocks.
But the key question here is how relevant is this investing strategy in the current market? With increasingly sophisticated investors, there are various ways that we can enhance rule of 100:
1. Risk Adjustment. Depending on your risk appetite, you should adjust the stock allocation accordingly. Rule of 100 is just a guideline, not a one size fits all investing solution!
2. Inclusion of Digital Assets in the asset allocation. For investors that view crypto as a generational wealth asset, they might want to allocate 5% or 10% to crypto before applying rule of 100 on your remaining assets.
3. Growth vs Value stocks allocation. For absolute stocks lover, your asset allocation might be 100% in stocks. In this case, rule of 100 can be tweaked to determine the percentage of asset allocation into growth stocks by deducting your age from 100. If you are 30 years old, 70% (100-30) can be allocated into growth stocks and the remaining 30% into value stocks.
All in all, always do your own due diligence before investing!
Diversified risk - $Vanguard Total Stock Market ETF(VTI)$, $SPDR S&P 500 ETF Trust(SPY)$
Crypto related - $Coinbase Global, Inc.(COIN)$
Growth - $Tesla Motors(TSLA)$, $Alphabet(GOOG)$
Value - $SINGTEL(Z74.SI)$
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Thbaks