Most experts agree that in order for
your investments to grow at a rate that significantly outpaces inflation,
you'll need to allocate a significant portion of your portfolio
to stocks.
Aggressive investors are willing to accept considerable
volatility in their portfolios in the short term, have
little need for current income from their investments,
and have a significant number of years ahead of them to
meet their financial goals. They might allocate 80% or
more of their portfolio to stocks and other potentially
volatile investments such as options and REITs.
Since the focus in an aggressive allocation model is growth,
bond investments play only a supporting role to help lower
volatility, while cash investments provide liquidity for
emergencies and other investment opportunities.
While an aggressive allocation model isn't for the faint
of heart, history has shown that this approach, combined
with a well diversified portfolio,
and the patience to stick to a long-term buy-and-hold investing
strategy through inevitable market downturns, can be the
most profitable in the long run.
Professor
Roger Ibbotson, Yale University, chairman and founder
of Ibbotson Associates
Professor
Roger Ibbotson, Yale University, chairman and founder
of Ibbotson Associates 
