Embarking on the journey of investment in your 20s or 30s can be both thrilling and daunting. Insights from business leaders will guide you through the maze of asset allocation and portfolio diversification. Learn why starting with a 70-30 split could be beneficial and why tolerating more risk with ETFs might be the strategy to consider. Discover 8 expert insights to help you make informed decisions and build a robust investment portfolio.
- Start With A 70-30 Split
- Use A 90/10 Split For Growth
- Build A Strong Foundation
- Diversify Beyond The Stock Market
- Align Allocation With Risk Profile
- Take More Risk In Your 20s
- Follow Eugene Fama’s Advice
- Tolerate More Risk With ETFs
Start With A 70-30 Split
Being a financial expert for over a decade, I’ve found that starting with a simple 70-30 split between low-cost index funds and bonds gives you a solid foundation without getting overwhelmed. I always tell my newer investors to use apps like Vanguard or Fidelity to set up automatic monthly investments of even just $100, which helped me build my first $10,000 without stressing about market timing.
Adam Garcia
Founder, The Stock Dork
Use A 90/10 Split For Growth
From working with countless young investors, I’ve found that starting with a 90/10 split between stocks and bonds through low-cost index funds is often the sweet spot for long-term growth in your 20s and 30s. I typically suggest my clients automatically invest monthly in broad-market ETFs covering US, international, and emerging markets, which helps many of them stay consistent even during market downturns.
Jonathan Gerber
President, RVW Wealth
Build A Strong Foundation
For someone in their 20s or 30s just starting to diversify their investment portfolio, my advice is to focus on building a strong foundation with a long-term mindset. Start with a growth-oriented asset allocation, such as 80-90% in equities and the rest in bonds or other fixed-income investments, as your time horizon allows you to weather market volatility. Diversify across sectors, geographies, and asset classes, including index funds or ETFs, to minimize risk while capturing market returns.
As you gain more confidence, consider incorporating alternative investments or real assets like REITs for additional diversification. Most importantly, stay consistent, invest regularly, and avoid emotional decision-making during market fluctuations.
Chad Lively
Lead Financial Planner, Lively Financial LLC
Diversify Beyond The Stock Market
If you’re in your 20s or 30s and starting to diversify your portfolio, don’t put all your eggs in one basket—and don’t be afraid to look beyond the stock market. Your biggest advantage right now is time, so use it to take some smart risks that can set you up for the long haul. Start with the basics: some equities for growth and fixed income for stability. But then, branch out into alternatives like private equity, venture capital, real estate, or even commodities. These kinds of investments aren’t tied to the same market swings as stocks, so they help balance things out while still offering solid upside.
As for asset allocation, think about your goals. If you’re aiming for growth, maybe 60-70% in equities, 20% in alternatives, and 10% in fixed income could work. But the key is to stay flexible and keep learning. The more you understand your options, the better positioned you’ll be to make decisions that build wealth over time.
Kelly Ann Winget
CEO / Fund Manager / Founder, Alternative Wealth Partners
Align Allocation With Risk Profile
No matter your age, your investment portfolio needs to have an asset allocation that aligns with your risk profile and goals. Those with a longer time horizon, like investors in their 20s and 30s, have the advantage of time when saving for retirement and might be more comfortable with a larger percentage of their portfolio invested in equities.
A common rule of thumb to get you started is the “100 minus age” rule. By subtracting your age from 100, you can determine the percentage of your accounts that should be in stocks with the remaining portion allocated to bonds and cash.
Applying this rule, your accounts should increase in fixed-income investments as you age and become more conservative. While this rule can help get you started, it is not written in stone and does not replace professional guidance.
Nicole Cannone Wegman
Wealth Manager, Modera Wealth Management
Take More Risk In Your 20s
In your 20s, it makes sense to take more risk, to be more aggressive, and to get as much invested as you can. Chances are, you’ll set yourself up beautifully for later in life. If not, you have ample time to course correct, make up the difference elsewhere, and get back on your feet. Point being, you simply might not have the same opportunities in your 30s and beyond.
As such, when I think about asset allocation and diversification for young people, I am generally imagining being fully overweight different growth investments. That would be venture capital, early stage private equity, Nasdaq stocks, Bitcoin, and various other speculative ideas. I would work with a professional that has a proven track record of building growth portfolios, and I would intend to actively monitor the portfolio to make sure I am being compensated adequately for the level of risk that I am taking.
That said, worrying about diversification and asset allocation might be overdoing it if you are getting started in your 20s. The important thing is to start early, invest often, and stay the course. Many people don’t even start—just by doing so from a young age, you’ll be ahead of 90+% of the rest of the world!
Geoff Sokol
Private Wealth Advisor, GT Investment Management
Follow Eugene Fama’s Advice
I’d listen to Nobel Prize winner Eugene Fama who is known as the father of modern finance. He would suggest reducing risk by diversifying your portfolio and focusing on low-cost index funds or ETFs that offer broad market exposure and discourages relying on speculative methods to try to outperform the market.
Jeffrey Kropp
Financial Advisor, Brandywine Financial Advisors
Tolerate More Risk With ETFs
Someone in their 20s to 30s can tolerate more risk so I would go all in on an ETF such as VOO covering the S&P 500 with 90 to 100% allocation. Use the remaining 10% to venture into something of interest such as watches, wine or anything else that is of interest, even crypto. If you are a seasoned professional, put your money where your mouth is and put 50% in the ETF and play around with other ETFs of interest or directly invest in private companies or fractional funds.
Shanka Jayasinha
Founder & Chief Investment Officer, S&J
