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QuestionsCategory: Portfolio ManagementPortfolio Allocation – Growth vs Income vs Markets
LS asked 1 month ago

I am looking for some tips on suitable portfolio allocations. Based on my age and stage in life, I am planning for a split of 50% growth and 50% income.
If I also plan to invest in some ETFs that track market indices, like S&P500 (VOO), China A50 (2822), etc. Where should I “allocate” that? Towards the growth portion or income? Or should I have a separate split entirely, for example, 40% Growth, 20% Market Indices, 40% Income?
Also, should I extract out the allocation of a particular company if it has a relatively large portion of the Index ETF? For example, if I hold AAPL as one of my growth counters, and AAPL is one of the top few counters in VOO, should I count that towards diversification risks?
Thanks in advance.

1 Answers
Victor Chng answered 1 month ago

Hi LS,
You can based your allocation on the “Rule of 100”. For instance if your age is 30 years old, based on Rule of 100, you should put 70% in growth (100 minus 30) while 30% in income or other assets. 

Index ETF stocks allocation may change over time. You should treat ETF as individual stock, so if the ETF is more toward growth then it should be under your growth portion. 
Hope this helps :)

LS replied 4 weeks ago

Thanks! I wish I was 30b :) haha

Victor Chng replied 4 weeks ago

Welcome LS :)