Summary: The optimal asset allocation for an individual relies on many factors, but a 50-50 ratio of stocks to bonds works just fine.
Asset Allocation: What to buy, and how much of it.
Let's start off slow. The broadest level of asset allocation is how much stocks vs how much bonds you should have.
Your risk tolerance will be the main deciding factor for ratio of stocks to bonds optimal for you. Technically, you decide what your risk tolerance is, but here are some factors that generally decrease your capacity for risk: