A&I Wealth Management > Blog > Investment Advice > How Much Should I Have in the Stock Market?

“How much money should I have in the stock market?”

Get some advice about how much to invest in equities. Also, what the big secret sauce to investing? Timeless advice originally posted in April, 2021.

The market is even better than we thought!

A recent past US equity rally over 12 months was the third-best 12 months in history. In 1933 and 1934 US equities did even better! Click the graph to see more detail.

Best 12 Months in US Equity Markets History

So how much should I have in the stock market?

We often hear questions about how much money a person should put in equities. The answer is different for every person, of course. And the reasons are manifold. But there are some general rules of the road.

First, have you taken care of your short-term financial stuff?

  • Do you have enough money tucked away for emergencies?
  • What if you lost your job?
  • What if you have a health problem?

You want to set aside this money and don’t put it in equities. Today, interest rates are low! You have to make a decision to not worry about the rate of return on this safe money.

Second, diversify. You may want to talk with an expert about where to invest your money and how much to put into each. This is called asset allocation. Click here to learn how we make these decisions.

Women and investing

Stacey Frank and Marla Mason discuss how COVID-19 changed things for women and their finances. They share good news about women and money. In particular, women save more and tend to do better with their investments than men! On the other hand, women face unique challenges, like longer life expectancies and lower average income compared to men. Learn how to manage your money like a boss!

With a little humor and a lot of great analogies, Marla and Stacey make it real.

What is the

Secret Sauce to Investing?

Here is the secret sauce to investing. First, more than anything else, investor behavior determines an investor’s return. If you can stick with it, you can earn these high average rates of return. Second, asset allocation determines a huge amount of overall return. The more you have in equities, for long periods of time, the better you will do. And finally, investment selection and timing help determine an investor’s performance.

Asset Allocation and Portfolio Management

The SP500 is a popular measurement of the stock market, equities. It has averageed about 10% annual returns since inception. More than 90% of an investor’s returns depend upon the amount of money in equities. The average investor is underperforming their own investments by between a half-percent to five percent per year!


Learning about the different types of investments can be interesting and rewarding. For more information, contact your advisor. Or, if this sounds like a major drag, just talk to your financial advisor and they will be happy to create an asset allocation in alignment with your long-term financial goals.

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    About the author

    Karl Frank, Certified Financial Planner ®, MSF, MBA, MA, is the President of A&I Financial Services LLC, a local business that specializes in wealth management, insurance planning, and retirement planning. Karl cares for business owners and the businesses that care for them. Learn More about Karl.