The Easiest Asset Allocation Rule

Your asset allocation may be the most important decision you make as an investor. In fact, studies have found that asset allocation accounts for more than 90% of the variation in portfolio returns. In other words, get your asset allocation right, and the rest is largely semantics.

Asset allocation refers to how your investment capital is spread across different asset classes, particularly in stocks and bonds. Finding the right balance between these asset classes is one of the keys to successful long-term investing.

But how to determine the right asset allocation for you is a question that can quickly send an investor into a tailspin. Luckily, the easiest asset allocation rule, also known as the "100 Minus Your Age Rule," is so easy even a first grader can do it.

This post originally appeared at Kiplinger.