I believe that investing is a crucial step in your plan to become financially secure. So I recommend putting as much as you can into an investment portfolio like a 401(k) at work, or (especially) a Roth IRA that you create yourself. 15% of your pay is a good round number.
But allocating money is only the first step. Once the money is in there you have many options on what to invest the money in.
Those who recommend these things recommend a mix of stocks and bonds (which remember can all be in mutual funds; you’re not picking individual stocks here). The most famous of these adages says something along the lines of “own your age in bonds“. So if you’re 30 years old, you should own 30% of your portfolio in bonds.
Personally, I think that’s garbage advice. We need all the growth we can get, and bonds just ain’t gonna cut it.
Regardless of what allocation you’ve decided on, one suggestion that everyone seems to make is to rebalance your portfolio periodically.
I’m not doing this. I haven’t rebalanced pretty much ever. Am I making a mistake?