Question

Imagine that you are investing with long term horizon as private individuals for your retirement. You can invest funds only in bonds and shares.

So, from the perspective of an aggressive investor what would be the proportion between bonds and shares in your portfolios?

Your answer should be precise and with details.

Answer 1

If I am investing for the long term perspective and I also assume that I am a young investor as I have a long time horizon, so I will always be looking for investing a high proportion of my portfolio into stocks, because stocks have an ability of capital appreciation through growth and expansion in the long run, and I would be wanting to appreciate my capital by being a shareholder in the long run and that will help in generation of the return.

I would be less keen on adding bonds to my portfolio, because I would not be risk averse because my duration is always for long period of time and bonds are always for those investors who are investing in for shorter periods and they are highly risk averse and looking for uniform stream of payments, but I am looking for aggressive investment and always be inclined towards investing in stocks.

My proposal would be 80% of my portfolio into stocks and 20% of my portfolio into bonds, because it will provide me with the ample aggressiveness and hedging to a little extent as well.