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Instead of choosing "all or nothing" solutions, the rule recommends splitting decisions approximately 50/50 as a starting point.

What to know: Here, author Allan Roth explores five key areas where the 50/50 rule can be integrated into your investment decision process:

📌 Asset Allocation: While your stock allocation can range from low to high depending on preferences, Roth suggests near-retirees consider a 50 percent allocation to maximize safe withdrawal rates and allow for effective rebalancing

📌 Concentrated Stock Positions: When clients hold significant vested stock positions, Roth often recommends selling about half, focusing on minimizing tax implications and emotional regret while diversifying risk

📌 Selling Expensive Funds: For funds with high fees and large unrealized gains, Roth typically develops a plan to sell about 50 percent of holdings while considering tax efficiency and client life expectancy

📌 Traditional vs. Roth IRAs: To achieve tax diversification, Roth often advises gradually converting tax-deferred money into Roth accounts, aiming for a balanced 50/50 mix to hedge against future tax rates

📌 Dollar-Cost Averaging (DCA) vs. Lump Sum: For clients receiving windfalls, Roth commonly recommends investing half immediately and the remainder through DCA to balance emotional comfort and financial returns

Key Takeaways: The 50 Percent Rule is not a hard-and-fast requirement but rather a flexible approach to decisions that you might find emotional or complex. By avoiding all-or-nothing choices, you increase your likelihood of achieving both optimal outcomes and financial confidence.