Rule of 100 Minus: If you want to properly balance your investment portfolio in 2025, the Rule of 100 Minus can help you the most. It is a simple and effective formula, which guides you in proper asset allocation. According to this rule you will have to reduce your age from 100. Whatever the result is, that will be the percentage of your portfolio invested in equities. The rest should go into debt or fixed income instruments.
How does this formula work?
Suppose your age is 30 years.
100 – 30 = 70
According to this formula, you should invest 70% of your portfolio in equities (stocks, mutual funds) and the remaining 30% in debt instruments (FDs, bonds, PPF).
Why is this formula so special?
1.
Reduces the risk age of your portfolio balance. The risk decreases as you age.
2. Long term development
Investing more in equities when you are young helps your wealth grow faster.
3. Safety Net
Investing more in debt instruments near retirement gives you stability
understand through calculations
Case 1
If you are 25 years old
Equity Investment: 100-25= 75%
Debt Investment: 25%
Your portfolio will look like this: Rs. 1,00,000 investment = Rs. 75,000 (Equity) + Rs. 25,000 (loan)
case 2
If you are 50 years old
Equity Investment: 100-50 = 50%
Loan investment: 50%
Your portfolio will look like this: Rs. 1,00,000 investment = Rs. Rs.50,000 (Equity) + Rs. 50,000 (loan)
case 3
If you are 60 years old,
Equity Investment: 100-60 = 40%
Loan investment: 60%
Your portfolio will look like this: Rs. 1,00,000 investment = Rs. 40,000 (Equity) + Rs. 60,000 (loan)
Is the 100 Minus Rule for Everyone?
This rule is a solid guide for every investor. However, this may vary depending on your financial needs, goals and risk appetite.
1. For the youth
– This rule gives an opportunity to take risks and increase money quickly.
2. Retirement is near
As a rule, investing more in debt instruments will give you stability.
3. Customization
– If you can take more risk, you can increase the percentage of equity.
What do the experts say?
The Rule of Minus 100 is a simple but effective asset allocation tool. This helps you make a suitable investment plan according to your age. But each investor should customize it according to his own needs and goals. The 100 minus rule helps you invest in the right direction. If you get it right, in 2025 your portfolio will be not only safe, but also full of profits. So what are you waiting for? Balance your portfolio and move towards profit.
