I’m 76 with $73,000 in an investment account that has not increased in 2 years. Should I abandon the 50/50 strategy?

My investments are split 50% stocks and 50% bonds. It seems like the stocks have made money, but the bonds have lost money. My investments have remained around $73,000 for the past two years, in spite of the $100 a month I’ve invested.

Does the old adage still hold true that at this age — that it’s best to split investments 50/50 in stocks and bonds? It appears that had I had more in stocks, I would have made more money over the past couple of years. Given the market these days, is there a better way to diversify investments?

See: I want to retire at 55 in a country with free health care. My spouse will draw Social Security, and I have $160,000. Are we crazy?

Have a question about your own retirement savings? Email us at HelpMeRetire@marketwatch.com

Dear Reader,

Actually, at your age, the old adage would probably be to have more in bonds than in stocks, as the former tend to be more conservative. That said, it isn’t the right move for everybody and your investments should be allocated to best fit your interests and goals.

Many people have been upset with the way their investment portfolios performed in the last couple of years, so you’re certainly not alone. But it is best not to act on past performance when investing, particularly over the short term, so don’t change your portfolio for that reason alone. 

It is healthy, however, to do a checkup on your asset allocation. Conduct a deep dive into your stocks and bonds. What are you exactly invested in? Then circle back to your financial plan. If you don’t have one, get started immediately.

Take account of your assets and liabilities, review how much money you spend (or need to spend) every year, and where that fits in with your income. Take into consideration how those expenses may change in the future, for both short-term and long-term purposes.

Attempt to figure out how much money you need for the rest of your life. It is a hard exercise, and not a number you can pinpoint, but try this rule of thumb: Multiply your expected monthly expenses by 12 and then multiply that figure by 25. That is a very broad calculation. Keep in mind there are many factors that would affect that figure, including inflation, interest rates, emergencies, medical expenses, and so on. 

Risk tolerance vs. risk capacity

Even if you are leaning toward riskier options, you might not be able to do so and realistically or reasonably achieve your goals. There are two terms to know here: risk tolerance and risk capacity. The former is how much risk you can stomach, such as emotionally handling a drop in your retirement account balance after a bad year. The latter is how much risk your finances can handle without going off course for your financial needs and goals.

It is fantastic that you’re able to save some of your income. If you don’t want to rock the boat on your current investment portfolio, open a separate investment account where you contribute a small portion of your excess income every month, and choose a higher allocation toward stocks.

Just be sure that this account, or any other endeavor you consider, does not take away from the plan that will keep you financially afloat and comfortable in your old age. Your retirement assets are not something you want to gamble. 

Consult a qualified and trustworthy financial planner who can walk you through specific investment options and create a more customized asset allocation for you. Perhaps the 50/50 strategy is right for you, but the sooner you determine that, the better for your future and finances.

Also see: I’m 62 and single with a ‘mountain of debt,’ and a desire to start a business. Am I in a position to take a financial risk?

Readers: Do you have suggestions for this reader? Add them in the comments below.

Have a question about your own retirement savings? Email us at HelpMeRetire@marketwatch.com