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How Much Risk?

To determine the right allocation for your portfolio, you need to know how much risk you can take.

That is tough to quantify, but we can look back at the past 80 years and get a decent idea of how frightening investing has been.

Here are approximate worst 12-month declines (total annual return) for a portfolio that is:

100% fixed income: about -5% in 12 months (imagine $1 million becoming $950,000)

20% equity/80% fixed income: about -10% (imagine $1 million becoming $900,000)

30% equity/70% fixed income: about -20% (imagine $1 million becoming $800,000)

50% equity/50% fixed income: about -30% (imagine $1 million becoming $700,000)

70% equity/30% fixed income: about -40% (imagine $1 million becoming $600,000)

100% equity: over 50% loss in 12 months (imagine $1 million dropping below $500,000)

Of course, these numbers are based on past performance of hypothetical portfolios.
There is NO way to know what kind of loss the future can bring. We just want you to invest "risk-first."