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Majority of investors decide to manage their money between bonds and stocks. General rule
with investors is that percentage of your portfolio which are bonds needs to equal your age. For
Example a 29 year old investor would be advised to have 29% bonds in his or her portfolio.

Typical scenario is that the older you get the less tolerant you become to risk. More aged you
become the less time you have to wait for your portfolio to recover. Secondly when you’re older you
may be more likely to need to spend the money you’ve invested and can afford to sell investments amid
a downturn.

Main reason investors would split their portfolio between stocks and bonds are a good strategy,
this has to with the fact that bonds have historically been much less volatile than most other
investments. Secondly with age saved income may need to be more responsive than usual.

Second section of spitting your portfolio between stocks and bonds is a good strategy has to do
with the act that bonds have historically been much less volatile than most other investments. Bonds
are much less risky than stocks. Compare the bond data with stocks. The standard & poor’s500 index
has posted an average annual return of 9.5% since 1928. On the other hand the risk of standard
deviation is much higher than bonds at 19.29% points. That means stock investors can expect to earn
anywhere between a gain of 28.8% or loss of 9.8% or something in between.

After it all the value of gold tracked by the SPDR gold shares ETF (GLD) is up 40.4%. Since 1979
the S&P GSCI Gold index returned 6.4% a year on average, according to data collected by Morningstar.

Gold has had some risk, or standard deviation, of 21.3% points, says Morningstar. Gold is 232%
more risky than bonds and even riskier than large US socks. Therefore shifting into gold for protection
can still have an element of risk in your portfolio.