Age and investing: where to invest money at 20, 40, or older.

Age and investing: where to invest money at 20, 40, or older.

You can start investing at any age, but the strategies will differ: what is acceptable to invest in at 20 is not recommended to do in 40 and older. We tell you which portfolios are appropriate for different ages.

Investment strategy depends on the goal.
Beginning to invest, a person must decide: what goal he wants to achieve, what time frame, and how much he is ready to risk the money. The strategy depends on the answers to these questions. For example, a 20-year-old investor who wants to make money can take risks: actively buying stocks on the decline and selling them on the rise. A 50-year-old investor is more likely to have the goal of saving for a comfortable retirement, and his portfolio will be mainly in safe securities.

Investing in their 20s and 30s
Young people can invest in any securities, try different strategies, take risks, actively sell and buy shares or mutual fund units. If the system proves unsuccessful and the 20-year-old investor suffers a loss, it is not as critical as, for example, at age 60 because there is time until retirement to earn more.

If investing for the long term – for example, saving for retirement or receiving the passive income in 30 years. To calculate how much and where to invest, you can use a simple formula: subtract your current age from 100. The resulting number is the acceptable level of risk. For example, at 25 years, you can invest 75% of your budget in any securities, and the remaining 25% – only in reliable securities.

If the investment goal is short-term, it is essential to achieve it, for example, to save up for an apartment in a few years. In this case, it is necessary to save your money, and you should act vice versa: invest 75% of your budget in shares of the first tier and Eurobonds, and 25% – in any, even high-risk instruments.

Possible portfolio of a 25-year investor

20% – government bonds;

70% – shares of different risk levels;

10% – mutual funds, ETFs, gold.

Investing at 30-40 years
In addition to risk and terms of investment, the family situation should be taken into account when investing.

The investor lives alone; there are no obligations. Until the age of 35, you can act like a 20-year-old – pursue an aggressive strategy and take risks, buy and sell shares of different companies, trying to win on the difference in rates. You can change the system to moderately aggressive – invest 60-70% of the budget in various stocks and the rest in OFZ.

You have a family or obligations, such as a mortgage. In this case, risks should be reduced, and the portfolio should be mixed. You can put 50% of your budget into a financial cushion – these are reliable OFZs and Eurobonds, and invest the remaining 50% in bonds of smaller companies but with higher yields.

A 35-year-old investor’s possible portfolio


30-40% – OFZs, corporate bonds;

60-70% – stocks;

10% – PF, ETF.

With liabilities:

50% – OFZs, Eurobonds;

40% – stocks;

10% – PF, ETF.

Investing at age 40-50
At this age, it makes sense to reduce risks and move to a conservative strategy because if the market declines, you can lose all the savings, and accumulating again will take a long time.

It makes sense to increase the number of safe securities in your portfolio gradually. As an option, you can move 50% to an emergency reserve and the remaining 50% to invest in various financial instruments – stocks, shares, ETFs, corporate bonds.

Closer to age 50, it is prudent to reduce risks as much as possible and remove all high-risk securities from the portfolio in favor of medium and low-risk securities.

Possible portfolio of a 45-year-old investor

50% – OFZs, Eurobonds;

50% – stocks, shares, ETFs.

Investing at 50+
At age 50, it’s essential to preserve what you’ve accumulated and keep your money from depreciating due to inflation. To do this, you need to reconsider your portfolio and make it more conservative: get rid of all risky instruments and leave only low-risk ones, such as OFZs and Eurobonds.

By age 60, it makes sense to hold 90-100% of low-risk securities in your portfolio. At this age, you can invest in bonds that mature in a few years using the laddering method:

1- Buy bonds with maturities of one, two, and three years.
2- After one year, some bonds mature, two-year bonds become one-year bonds, three-year bonds become two-year bonds.
3- In exchange for the redeemed bonds, buy new, three-year bonds, thereby renewing the “staircase.”
4- Another option is not to invest anymore but to receive passive income from savings or spend those savings.

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