The perfect investment is the investment you can sleep with. The perfect investment is that which provides the most return and the most sleep is most likely not the investment providing the highest return.

Far too many investors have taken on far too much risk and of course, that only shows during tough economic and market conditions.

The rule of thumb is your age as a percentage in fixed income (bonds, preferred stocks, CD's) and the balance in equities.

I think the guy who devised this rule of thumb is pretty smart and looking smarter every day. He must have lived through some tough times and stock market declines, as we are now.

I think in the zeal for greater return and an over reliance on so called investment professionals has far too many older investors far too exposed to the stock market.

Using the rule of thumb a 55 year old should be approximately asset allocated in 55% bonds and CD's and 45% in the stock market.

A 30 year old should have 30% in fixed income which I am sure would be considered stogy and too conservative but consider that bonds have beat stocks over the last decade and over many five year periods in history.

So remember that the perfect investment is that which provides the most return AND the most sleep!

Author's Bio: 

Scott Barclay is a respected financial writer, sought after speaker, workshop facilitator and investment coach who frequently contributes to BusinessWeek, Yahoo Finance, Self Growth and many other publications and blogs both online and in print.

Barclay's current book ''How The Investment Business Really Works'' is in the hands of over 100,000 readers.

Very few authors in the area of money and personal finance actually worked in the industry as a stockbroker.

Scott is uniquely qualified to write on this topic and shares insider industry knowledge that will empower you to become more financially savvy and help you to invest by yourself for yourself.