We all know the rule: Younger = More Stocks, Older = More Bonds. But there’s a second layer most people miss: How much of your stock portfolio should be in broad ETFs versus individual "conviction" picks?
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NOTE: This is made for the broader investor group of people. Not most of us on Getquin, who spends more time watching stockgraphs and balance sheets than watching nature outside. ;)
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The goal is to balance the safety of a global index with the alpha (market-beating potential) of picking winners. Here is a breakdown of how that ratio usually evolves:
1. The "Aggressive Builder" (Age 20–35)
Target Equity Split: 70% ETFs / 30% Individual Stocks
Strategy: You have the most valuable asset in the world—time.
Why: Use a broad ETF (like $VWCE (+0,59%) or $VTI (+0,75%) ) as your "Safety Net." The 30% individual stock portion is your "Satellite" where you can take bigger swings on growth or tech stocks. Even if a few of your stock picks go to zero, your 70% core keeps your retirement on track.
2. The "Wealth Optimizer" (Age 35–50)
Target Equity Split: 85% ETFs / 15% Individual Stocks
Strategy: Protect what you've built while still "playing the game."
Why: Life gets busy. Between career and family, most investors have less time for deep-dive research. Shifting more into ETFs ensures you don't underperform the market due to a lack of oversight, while the 15% allows you to keep a few high-conviction "blue chips" or dividend growers like $VICI (+0,42%) or $AAPL (-0,56%) .
3. The "Legacy Guardian" (Age 50+)
Target Equity Split: 95% ETFs / 5% Individual Stocks
Strategy: Simplicity and preservation.
Why: At this stage, a 50% drop in one "hot stock" can actually hurt your retirement timeline. Most veteran investors shift to 95% "boring" ETFs. The 5% in stocks is often just for fun or to stay connected to companies you truly love.
The "Golden Rule" of Diversification
If your individual stock picks aren't outperforming your broad market ETF over a 3-year period, you aren't "investing"—you're paying for an expensive hobby.
I'm currently: 65% Stocks, 35% ETFs at 21 years old.
Any thoughts?
