How Much of Your Portfolio Should Be in Stocks?

February 19, 2015

How much of your portfolio should you invest in stocks or stock funds? This is a crucial question that all investors must answer for themselves. If you have too little in stocks, you may not generate enough return to achieve your goals. But if you have too much in stocks, you may not have the stomach to stay invested—and long-term gains are how most investors build wealth.

It can help to consider how different allocations to stocks and bonds have performed over time. The chart below shows the returns of 11 different allocations ranging from 100% bonds (far left) to 100% stocks (far right). The dots represent the returns for that allocation for every calendar year from 1926 through 2014. The table, below, shows the median return for each allocation over the full time period.

allocations-feb2015

Allocations with more exposure to stocks had a wider range of returns than allocations with more exposure to bonds. But in most years, returns fell within a somewhat predictable range. Years of extreme gains and losses do happen, but they’re relatively rare.

To determine if one of these allocations would work for you, consider how these gains and losses could affect your portfolio and your long-term goals.  If you have questions or want to talk to an advisor, we’re here to help. Just call us at 1-800-763-8639 and ask to speak with a portfolio manager.

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Robin Greg February 19, 2015 at 7:04 pm

What is your fee for managing my profolio? Roth IRA Account, 225 k all in FundX allocations 2&3 with TD Ameratrade

noloadfundx February 20, 2015 at 12:43 pm

The management fee is 1% annually. We are compensated only through asset management fees, and receive no payments from fund companies or brokers. Give us a call at 800-323-1510and we can discuss ways we could help you with an account less than $500,000.

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