There's no universal 'correct' mix of stocks and bonds — it depends heavily on time horizon and risk tolerance. Asset allocation is simply how an investor divides their portfolio among broad categories like stocks, bonds, and cash. Historically, stocks have delivered higher long-term returns with more volatility, while bonds have generally been steadier but with lower long-term returns.
A common shorthand is something like a '60/40' portfolio — 60% stocks, 40% bonds — though that specific split is a starting reference point, not a universal rule.
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