From the course: Behavioral Finance Foundations
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Big picture selling rules
From the course: Behavioral Finance Foundations
Big picture selling rules
- [Instructor] Outside of individual stock selling, there are sometimes big picture trends, like a recession or faster growth in the broader economy, that should motivate your buying and selling. Let's take a look at 10 rules that you should consider as you think about investing. Rule number one is the rule of 100 or 110 depending on your perspective. The rule of 110, to start with, simply says subtract your age from 110, and that determines the proper percentage of your assets to have in stocks versus bonds. So if you're 20 years old, 110 minus 20 means you should have 90% of your assets in stocks and 10% in bonds. If you're 50 years old, 110 minus 50 equals 60, so you should have 60% of your assets in stocks. If you want to be a little safer, you want to avoid some risk, use a hundred instead of 110. Depending on kind of how safe or risky an individual you think you are, the rule of 100 or 110 can really help you with…
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