Multiple choice

As per Boggle, asset allocation for younger investors in accumulation phase should be

  1. 20% equity; 80% debt

  2. 70% equity; 30% debt

  3. 50% equity; 50% debt

  4. 80% equity; 20% debt
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

As per the asset allocation principle (often called the '100 minus age' rule), younger investors in the accumulation phase can and should take more risk. An 80% equity and 20% debt allocation allows for maximum growth potential while still maintaining some stability. The other options (20/80, 70/30, 50/50) are too conservative for young investors with long time horizons.

Keep practicing — related questions