Asset Allocation Strategy for Young Investors

Jessica is a financial planner working with a young couple, Mark and Lisa, who are looking to start investing. They currently have a combined income of $150,000 and modest savings of $20,000. They are interested in building a long-term investment portfolio and want advice on how to allocate their initial investment to achieve growth while managing risk.

Jessica explains that one fundamental approach to asset allocation is based on the proportion of equities versus fixed-income securities. She suggests considering their risk tolerance and investment time horizon when deciding how to split their investments.