When investing you need to decide on the level of risk you want to take

This might differ for different pots if they have different goals and timeframes involved

In deciding on the risk you are willing to to take you need to ask a few questions that I cover in this thread

Timeframe - the longer you have as a general rule the more risk you can take

If the pot in question is for retirement and that’s 20+ years away you could comfortably invests 100% in stocks

Need the money in 5 years time you might not want 100% in stocks

How comfortable will you be when your investments fall in value and would you panic sell?

In your investment journey you are going to see the value of your investments fall considerably

If 100% in stocks this could be 30-50%

40% stocks & 60% bonds might fall 10-20%

As long as you’re well diversified these will be temporary declines but could last for a number of years

If you would freak out & sell with a 30-50% fall, a 100% stock portfolio probably isn’t suitable for you

Instead you might need to pull it back & include bonds which are generally lower risk & lower return

What level of return do I need? If you have built yourself a robust financial roadmap you should know the return you need to achieve your goals

If the return you need is 6%pa or higher you are probably going to need a 100% stock based approach to achieve it over the long term

Need a 4%pa return and you might be able to opt for 60% in stocks and 40% in bonds

How flexible is your goal?

So lets say you have a core of more certain income for your retirement from rental income or guaranteed pensions like final salary schemes.

These sources might cover all of your basic expenditure needs and some of the fun stuff in life.

You might then have a pot of money to invest that will provide the 'icing on the cake' for extra 'wild living' spending

You will not be relying on this pot so you can potentially afford to take a high degree of risk with it, as if it went wrong you would be fine