First of all…its not THAT precise…the answer is usually a combination of both stocks and bonds. How you or (your financial advisor)divide between the two will depend on several factors including your risk tolerance and your age. For example, as you get older, you will move further to less risky investments. This means more of your investment portfolio will be focused on investments like, let’s say, bonds. They may pay you less than a stock, but since they pose less risk they are usually preferable later in life.
I could not agree more! A portfolio constructed to maximize returns may not be as effective at generating consistent income for life. You have to keep in mind that, as your goals in life change, your portfolio needs to change as well!! If you are close to retirement, you'll want to check out some alternative approaches, as retirement investing need to be done differently at this stage of life. For example, in retirement, you might calculate the amount you need to withdraw over the next five to ten years, and that becomes the portion of your portfolio to allocate to bonds, with the remainder invested in stocks.
I think that you have to be patience, especially if you have just started. For everyone, it can be easy to get caught up in the latest trend, such as moving funds to gold, or technology stocks, or real estate and son on. There is a great benefit to have a portfolio designed on purpose rather than a portfolio designed on the latest fad. Stick with an allocation model, and you'll keep your portfolio out of trouble, which is at the end of the day, what REALLY MATTERS!
I’m sorry mate, but what really matters here is to make money £££...this is what this is all about, if not where is the trill and the risk? Go have a shop if you want to be “out of trouble”!
For some reason, most of the people think stocks are much riskier than bonds, but that is an illusion caused by focusing only on short term volatility as a measure of risk. If you are a long term investor - and only long term investors should be messing with stocks and long-dated bonds - then short term volatility does not matter!!! Start focusing on the investment that you SHOULD be doing!!!