Investment experts often assert that younger individuals can afford to take more risks given their longer timeline until retirement. But what if this conventional wisdom is flawed?

Typically, it’s suggested that younger investors embrace higher risk due to their extended horizon to weather market fluctuations. Conversely, older investors, with the need for accessibility in the near future, are advised to avoid such risks.

This advice seems questionable on several fronts.

If you’re just starting out with a relatively small investment, any loss can be significantly discouraging, potentially deterring future investment endeavors.

Further, suggesting high-risk tolerance to novice investors who lack substantial market knowledge and time to manage complex portfolios seems imprudent.

Advising newcomers to venture into high-risk assets is akin to having a beginner pianist perform Mozart’s Rondo Alla Turca; it’s more sensible to build proficiency gradually.

On the flip side, older investors might have greater investment knowledge and more time to manage their portfolios, especially post-retirement. Directing them exclusively toward low-risk options could be limiting.

Conventional advice correlates risk aversion with increasing age, symbolized by a downward sloping line on a risk-age chart.

My initial investment years adhered to this advice, with my riskiest choice being an investment trust in frontier markets. The experience, though educational, didn’t yield favorable financial returns compared to a standard tracker fund.

Perhaps, instead of this linear approach, a bell curve model might be more fitting. Start with caution, increase risk with experience and wealth, and then reduce risk, but not entirely, upon nearing retirement.

For new, young investors, starting with a low-cost ready-made portfolio via major investment platforms might be prudent. These portfolios, comprising various tracker funds, balance risk across assets like equities, bonds, and property, providing stability. A regular small investment, such as £50 monthly, can set a foundation.

At my mid-thirties, it’s time according to this bell curve model to increase risk. My current equity-focused portfolio is globally diversified but could benefit from further diversification within investment trusts focusing on regions like Asia and India, without overloading on risky funds.

Eventually, introducing bonds into the portfolio can offer a counterbalance to equities, beneficial both in retirement for regular income and for younger investors through reinvestment opportunities.

Traditional strategy often advises exiting the stock market by retirement to avoid risking savings. However, this might be the time to apply expanded investment knowledge and engage in hobbyist investing, exploring individual stocks.

Therefore, consider individualizing your risk strategy. It’s not solely about age; it involves your knowledge, experience, and the effort you’re willing to invest. Your investment journey might not align strictly with age-based advice and should cater to your personal growth curve.