Purely from a risk perspective, here’s a handy list i like to use. Starting from the least risky asset classes, and building-up. This works very well if one has a source of income apart from the investments themselves.
Another aspect to consider is whether to adopt the philosophy of Seneca’s barbell that was most recently popularized by Nicholas Taleb’s Anti-Fragile.
Basically, If investing in various instruments to maximize returns, while…
- …lowering overall risk
- …ensuring predictable-income / future-assets
…then the barbell approach can be of relevance in this context/scenario.
Attempting to extract a few additional points of return
by investing in a “middle-of-the-road” somewhat riskier proposition
is usually worse than explicitly splitting one’s investments into 2, and,
- ,continue investing the fraction that one cannot afford to lose.
- at zero risk (as near zero in reality as possible).
- ,investing the fraction that one can afford to lose.
- at a significantly higher-risk (as high as one wishes/expects overall returns to be)
PPS: This barbell approach is also applicable outside of purely financial scenarios.