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What is the Main Street Rule in investing?
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The Main Street Rule of investing is an investing approach that advises people to invest the same amount of money in different asset classes, such as stocks, bonds, and real estate. By diversifying their investments, people who follow the Main Street Rule are less likely to suffer from large losses due to market downturns. The rule recommends that each asset class should make up a certain percentage of the investments, such as 30 percent in stocks, 30 percent in bonds, and 40 percent in real estate. The percentages may vary from person to person, but overall, the goal is to spread out the investments in order to minimize risk.