Abstract: For one-period investors, fixed income securities without default are risk-free asset, because the return of these securities can be determined at the beginning of investment period. However, considering long-term investment, investors are able to adjust their portfolio since fixed income securities would have risk of interest rate volatilities from reinvestment. So fixed income securities are no longer risk-free. This paper discusses long-term asset allocation under a frame of special ``habit formation" utility function. Under some assumption for simplicities, we derive the influence of real interest rate volatilities on weight of risky asset allocation, and provide theoretical basis and algorithm for calculating real optimal long-term asset allocation.