Mid 30's, looking for what split I should have between Australian shares, international shares, property, cash, interest, bonds, options, etc. or maybe none of the above. What is considered to be a "safe" ratio and what are the slices of this pie made up of?

Updating according to request from answerers - sorry, these factors are obviously critical to answering the question, not my area of expertise (clearly :) ).

Income = 100K pa
Wealth = approx. 350K existing investments (50% blue chip Aussie shares/50% term deposit)
Expenses = none
Job Security = contractor, but my industry has a deficit of workers.
time horizon (i.e. when will you need the money) = when I retire at 60ish, although I probably need 200k I guess in the next 6 months to buy an investment property. Although perhaps I should post a separate question about what level (%) of debt to take on when property investing, this would determine how much capital I should keep for the investment.
No dedicated Emergency fund: thanks for that advice; I will build one.

  • 2
    The most conservative asset allocation is something like "canned food, guns, and ammunition". Is that really what you want? ;)
    – user296
    Commented Oct 15, 2010 at 23:03
  • I live in Australia, where you can neither readily obtain guns or ammunition. But haha, nice joke. Commented Oct 17, 2010 at 23:40

5 Answers 5


Before investing, absolutely follow the advice in mbhunter's answer.

There is no safe investment (unless you count your mattress, and even there you could find moths, theives, or simple inflation taking a chunk out of your change). There is only maximizing your reward for a given level of risk - and there is always risk.

This question should be enshrined somewhere on the Q&A site for its comprehensive list of sources for information on asset allocation. The tag is also going to have tons of good information for you.

To answer your question on what slice of the pie is devoted to what, you can check out some common portfolios given by U. S. experts for U. S. investors - these should be convertible into Australian funds.

Another portfolio that is, like all those above, loosely based on Modern Portfolio Theory for maximizing reward for a given level of risk is the Gone Fishin' Portfolio.

A common denominator amongst these portfolios is that they emphasize index funds over mutual funds for their long-term performance and preference lazy management (yearly rebalancing is a common suggestion as the maximum level of involvement) over active management. You can see more Lazy Portfolios.

  • wow very nice list of resources. I appreciate it. I'm updating my question to be more specific. Commented Oct 14, 2010 at 23:18
  • Just from reading ARWDWS site I found this link which was great.. mymoneyblog.com/… basically saying your young, be bold! :) Commented Oct 18, 2010 at 0:26
  • justkt: what is the reason today that everyone wants to be William Bernstein? Philip Bernstein and now even Ben Stein -- are they genuine names or faked? Seen already too many articles exploiting the fact like "famous financial analyst Bernstein said..." (not saying which Be...ein?
    – user1770
    Commented Feb 9, 2011 at 2:33

This is a somewhat complicated question because it really depends on your personal situation. For example, the following parameters might impact your optimal asset allocation:

  • Income
  • Wealth
  • Expenses
  • Job Security
  • time horizon (i.e. when will you need the money)

If you need the money before 3 years, I would suggest keeping almost all of it in cash, CDs, Treasuries, and ultra safe short-term corporate bonds.

If however, you have a longer time horizon (and since you're in your 30s you would ideally have decades) you should diversify by investing in many different asset classes. This includes Australian equity, international equity, foreign and domestic debt, commodities, and real estate. Since you have such a long time horizon market timing is not that important.

  • updating my question now. sorry not to be more specific. Commented Oct 14, 2010 at 23:18

You don't say your level of consumer debt. You don't say how much of an emergency fund you have.

If you have debt, pay it off before you invest. If you don't have an emergency fund (X months' expenses, pick your own X) get that before investing.

If you have neither, get a small emergency fund, and then throw as much as you can to getting rid of debt.

Beyond that, look for prudent investments. They're not the same as conservative investments.

To know what's prudent, learn about the ones you listed and what determines their prices. Learn how or why they go up or down in value.

  • updateing my question now. sorry not to be more specific. Commented Oct 14, 2010 at 23:18
  • "If you have debt, pay it off before you invest." can't be generalized because such advice depends a lot on the charged interest of the debt versus the profit gained from putting that money elsewhere. If you have 100k debt with a fixed interest rate of 1.5% and 100k free and an investment opportunity yielding 3% pa than paying off the debt wouldn't be a smart move imo.
    – iLuvLogix
    Commented Sep 8, 2022 at 11:34

The safest place to put money is a mixture of cash, local municipal bond funds with average durations under two years and US Treasury bond funds with short durations.

Examples of good short term US municipal funds:

  • VIPSX (US Government TIPS inflation protected bonds)
  • VFSTX (Short Term Investor Grade bond fund)

I'm not an active investor in Australian securities, so I won't recommend anything specific. Because rates are so low right now, you want a short duration (ie. funds where the average bond matures in < 2 years) fund to protect against increased rates.

The problem with safety is that you won't make any money. If your goal to grow the value of your investment while minimizing risk, you need to look at equities. The portfolios posted by justkt are a great place to start.


If you can afford the time and are looking for more deep, and fun, investment tips, check out http://gurufocus.com. Great for more fundamental analysis of "Intelligent Investor" type Benjamin Graham-style businesses.

No use scatter-shooting the stock exchange hoping to find good value businesses. Even blue-chips have an increasingly uncertain future (except IMHO certain world dominators like KO, WMT, XO and MCD).

  • Be critical towards Graham's tips today, some of them are timeless, but some like about 15-stock-diversification have become invalid[1]. So services boosting with grahamism must be judged with care. [1] kuznets.fas.harvard.edu/~campbell/papers/diversification.pdf
    – user1770
    Commented Feb 9, 2011 at 2:36

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