Asset Allocation Over Time

Experts recommend holding safer assets the closer you get to selling or cashing out. This reduces the probability of selling assets at a loss. For retirement accounts this normally amounts to reducing holdings of stocks with age (see exceptions down below). A simple and often quoted rule is holding a percentage of stocks equal to 110 minus your age (i.e. 90% if you're 20, 60% when you're 50 and 45% when you're 65). Some experts recommend more aggressive allocation. E.g. the Vanguard Target Retirement 2030 fund (aimed at people set to retire in 2030, many over 50 years old) consists of over 75% stocks!

Unfortunatey there's no one optimal rule. E.g. if you plan on passing a set of assets to your grandkids, who won't need/use them for a long time, the 110 rule is probably too conservative. On the other extreme, if you're 20 but will need to sell your assets soon to buy a house, it's probably too aggressive.