Questions tagged [asset-allocation]

for questions that relate to asset allocation. Asset allocation is an investment strategy that attempts to balance risk versus reward by adjusting the percentage of each asset in an investment portfolio according to the investors risk tolerance...

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2 votes
1 answer
77 views

Can we mix different asset allocation funds (funds-of-funds) to obtain a custom percentage mix of equity to fixed-income assets?

Since 2018, Canadians (and Americans) have easy-access to an array of auto-rebalanced asset allocation funds. These "funds of funds" combine equity and fixed-income in different ratios, in ...
6 votes
1 answer
1k views

What does it mean "You are buying the underlying asset"?

On some trading apps, when you buy a normal stock, they say "You are buying the underlying asset". I'd like to know what this means... Is it a "positive" message, like "Just ...
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2 votes
0 answers
34 views

Asset allocation and IRA [duplicate]

I have to take a required minimum distribution from my IRAs every year. And I pay taxes on it at a marginal rate of 24%. I also have assets in a non-IRA investment account. I do make some charitable ...
1 vote
2 answers
80 views

Asset allocation based on age [closed]

What is a safe asset allocation for 65 year old retiree for growth and capital preservationl. Is it approximately 60% stock, 40% bonds? Or it is more aggressive? The primary focus is capital ...
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1 vote
2 answers
139 views

Asset allocation and tax efficiency

Common advice for asset allocation to increase tax efficiency is to: Put bonds in tax-advantaged accounts (401k, Roth IRA, etc) Put stocks (e.g., S&P 500 ETF) in regular brokerage accounts The ...
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1 vote
2 answers
136 views

Do I need a cash reserve when investing in stocks?

I would like to know if I need to keep a fraction of my assets in cash or if I can simply invest 100% into stocks. Here is my thinking: As a young person I'd like to keep most money in stocks and ...
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8 votes
4 answers
827 views

Can I open a Roth IRA AND get to choose what companies my money is getting invested into?

In my experience with investing in IRAs, it seems like you just tell the people that you want to retire in (insert number of years), tell them how risky you're willing to be with your money and then ...
1 vote
1 answer
117 views

Money-Weighted-Return (MWR) or Time-Weighted-Return (TWR)?

Assume, I monthly invest a fixed part of my income. I strictly transfer this money to my broker account and never take money off (transfer-rule). There, I usually (but not always) immediately add to a ...
1 vote
1 answer
127 views

Do asset managers provide value? What's the evidence?

Hundreds of trillions of dollars are managed by asset management firms, according to this PWC article. The fees paid on those trillions must be enormous. I understand that if you are investing a lot ...
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0 votes
1 answer
91 views

Asset allocation and keeping cash as an asset in a foreign currency?

I already have an emergency fund with which I am comfortable with and no debts. The emergency fund is in euros, my local currency. This question concerns the asset allocation of my investment ...
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2 votes
1 answer
104 views

How to allocate assets between asset types and tax-benefit accounts?

I hoped I could simply put all my funds into a TDF in a tax credit account and done with it, but it seems it's not that easy. I'm trying to reallocate to these accounts: Individual Retirement Pension(...
1 vote
0 answers
90 views

Why should I buy bonds for my long-term portfolio when bonds have a lower upside than stocks? [duplicate]

I am one of those people who have 100% of their long-term portfolio in stocks (both in individual stocks and diversified index funds). I have an investment horizon of 50 years, so by "long-term&...
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0 votes
1 answer
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Is there a criterion for the different % allocation values in ETF or funds diversified portfolios?

This question does a good job covering the basics of asset allocation. My question concerns the asset allocation of stocks, so we leave the bonds out of the question. All the recommended portfolios ...
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2 votes
1 answer
353 views

How can I find the asset allocation of the FTSE All-World Index?

I am trying to find the asset allocation of Vanguard's FTSE All-World ETF. Even though Vanguard's documents preciselly state ETFs holdings in percentage, I have not found the asset allocation in terms ...
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1 vote
1 answer
626 views

What percentage of my money should I invest?

I am looking to begin investing some of my money, as I have been fortunate enough thus far to be able to save a decent amount. My trouble is, I don't know how much of it I should invest. I have read a ...
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4 votes
1 answer
154 views

How should I distribute investment types between differently-taxed accounts?

Background: I'm 37 and work in the U.S. I have a gross income ~100k, a 401k funded to the legal limit, a Roth IRA funded to the legal limit, and a regular investment account. The 401k has most of the ...
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0 votes
1 answer
88 views

Is it necessary to have different asset allocation for short-term needs?

I'm in my early 20s and have 60K in retirement accounts and 80K in taxable accounts. Both are invested in low-cost mutual funds, 80/20 stock/bond split (specifically 60% VTSAX, 20% VTIAX, 20% VBTLX). ...
27 votes
8 answers
7k views

50% portfolio in single stock, JPM - appropriate for 80 year old?

I've recently taken a look at my 80-year old mother's finances, run by a money manager at Morgan-Stanley. Half of her $3.5M portfolio is in a single stock, namely JPM = J.P. Morgan. This seems to ...
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0 votes
2 answers
120 views

How do I properly allocate capital into the different stocks I own?

Late last year (Aug. 2018), I started building a portfolio of stocks using fundamental analysis and management analysis. The portfolio is mainly built around high-income, dividend-paying companies ...
5 votes
2 answers
2k views

Is it risky to move from broad geographical diversification into investing mostly in less developed markets?

I currently invest in a handful of index funds that includes U.S. equities, U.K. equities, some emerging markets, and some Asian equities. But I have in mind that the West is eyeball deep in debt, ...
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1 vote
1 answer
55 views

Chart showing returns by asset class vs CAGR [closed]

I know of charts that show yearly returns by asset class. Are there charts that show 10 year CAGR by asset class?
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1 vote
1 answer
195 views

How to improve geographical diversification?

Recently realised on my investments' geo distribution map that they are largely (~83%) in NA/EU. Given this, should I diversify by region further? What kind of ETFs/funds in general avoid NA/EU? ...
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0 votes
1 answer
140 views

U.S. 10 year treasury bonds behavior during crisis

It's often advised to buy and keep government bond to protect ourselves against the next upcoming crisis. (For example, in a defensive stock portfolio you can have 50% of stock and maybe 30% of ...
2 votes
2 answers
100 views

Investing in a target date fund for retirement [closed]

Any suggestions about investing in a Vanguard target date fund 2045 for a Roth IRA? I'm 38 years old. Is 90/10 stocks/bonds too heavy for my age?
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2 votes
3 answers
593 views

What is the "definition" of a "diversified" portfolio and why a diversified portfolio is better?

A short version of my question - What is the "true" definition of a diversified portfolio and why is it better? A long version of my question - Regarding portfolio diversification, people ...
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5 votes
4 answers
2k views

Post Tax 401k or Taxable Brokerage Account?

I max out my pre-tax 401k, HSA, and do a roth IRA or backdoor Roth IRA. With my additional savings is there any reason i would want to do a post-tax 401k instead of keeping it in a regular taxable ...
3 votes
3 answers
365 views

Understanding bond ETFs

I am failing to understand the bond ETFs. I somewhat understand stock ETFs: ETFs own stocks, I buy a part of ETF, therefore, I also indirectly own stocks. When I sell my share of ETF, the ETF gets ...
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0 votes
2 answers
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Allocation basics not so basic [closed]

I've been trying to put together a long-term (15-20 years) ETF portfolio (stocks only, no bonds). As I read about the investment and allocation basics, I realized it's far from simple. I would like my ...
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26 votes
9 answers
6k views

What does one typically use as a money reservoir for stocks, when they are "on sale"?

I've read about people who claim to have made a lot of money investing in stocks (or funds) after a crash. They say the stocks were "on sale". But I wonder, where did they get the money to buy these ...
3 votes
4 answers
165 views

Is adjusting my portfolio's distribution according to bad signals from news risky?

I'm distributing my investment to stock(mostly MSCI ACWI) and bond funds, Basically 60:40. I also rebalance monthly as I got paid monthly. I recently worried about the global and local(South Korea) ...
1 vote
2 answers
153 views

How to allocate alternative assets?

I'm doing diversification with stocks and bonds. Basically 60%:40%. But when I'm trying to add alternative assets(like gold or REITs) or high-risk high-return bonds(like Brazil bonds), I'm not sure ...
3 votes
1 answer
182 views

Asset Allocation, Risk Free Part with Negative Yielding Bonds

I read a few books about asset allocation, e.g. Bernsteins's Asset Allocation states that mixing bonds with stocks lowers the risk significantly but only decreases the profit slightly. So there is a ...
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6 votes
3 answers
784 views

Is it a bad idea to frequently change my stock/bond mix in response to the market?

I'm currently investing in a couple of Betterment retirement accounts, and if you have used Betterment, you know that the site makes it easy to adjust your portfolio mix of stocks and bonds (see ...
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3 votes
1 answer
391 views

Why does a target 2050 retirement fund hold so much cash?

I'm specifically looking at BlackRock's STLFX LifePath Dynamic 2050 Fund. As the target date is so far out (2050), I'd expect almost all of the portfolio to be allocated to stocks. However I noticed ...
5 votes
3 answers
348 views

Asset allocation across multiple retirement accounts

I am a 47 year old passive investor (i.e index funds) with 2 investment accounts (401K & IRA). I have 50,000 in my 401K and 20,000 in my IRA for a total of $70,000 to invest. My proposed ...
1 vote
2 answers
146 views

How can a retail investor short the German car industry and its suppliers?

Suppose that I want to make a small investment of around 1000€ and that I want to short the German car industry and its suppliers over the long term (5-15 years). How would you do this?
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0 votes
1 answer
80 views

Does it make any sense to have individual stocks, bonds, preferred shares

I have a self-directed trading / investment account that has only ETFs in it. Each trade is $10. Does it make any sense to have individual stocks, bonds, preferred shares and if yes, what is the ...
4 votes
1 answer
57 views

Consider pre-tax status of retirement accounts in determining portfolio allocation?

I have a mix of accounts for my investments including brokerage, 401k and Roth IRA. I handle all my own investments and my current target allocation is 48% US stocks, 24% international stocks, 8% ...
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0 votes
1 answer
102 views

Diversification for large bond investments

I do all my investments with four index funds, and I currently have a fairly aggressive approach with 20% in a bond ETF (AGG) and 80% in three equity ETFs. As I get older, I'll put more money in ...
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2 votes
2 answers
307 views

Bond ETFs as a means to achieve risk parity

Background One of the investors that I really look up to is Ray Dalio. He has stated that a 50/50 stock to bonds allocation does not achieve risk parity because 80% of your risk is still in your ...
12 votes
3 answers
2k views

Should I exclude bonds from our retirement investment portfolio if our time horizon is still long enough?

My wife and I (ages 35 and 38) have 25-30 years until we reach retirement age, and I'm doing some research regarding our asset allocation. In addition to various podcasts, articles, and online posts, ...
1 vote
1 answer
111 views

Cash or Bonds (UK)

I'm currently making my way through Benjamin Graham's book. He mentions that ± %25 of assets should be held in either cash or bonds. Could someone clarify the government bonds situation in the UK? Is ...
2 votes
1 answer
314 views

What's the simplest, cheapest way to reproduce the WMA private investor indices's "income index"?

I'm aware that some discretionary wealth management and advisor types use the WMA private investor indices as a benchmark and as a guideline for asset allocation. (Update: that link is now broken/...
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4 votes
2 answers
244 views

How should residents of smaller economies allocate their portfolio between domestic and foreign assets?

Investment advice is often written from the perspective of a large domestic economy, where global effects have less impact. I live in Australia, where GDP is $1.13 trillion and our stock exchange has ...
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2 votes
1 answer
95 views

How do annual risks translate into long-term risks?

Suppose that the annual return of a 1 dollar investment has a standard deviation s and mean m. How does this translate into the risk of this asset over let's say 20 years? We may assume that annual ...
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5 votes
1 answer
275 views

How often should one's retirement portfolio be adjusted (rebalanced), and how?

I'm opening my Roth IRA Account. My question is: How often should I adjust my portfolio? I know this depends on a variety of factors: I'm 23, plan to retire when I'm in my 60s (or at least withdraw ...
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2 votes
3 answers
397 views

First 401K portfolio with high expense ratios - which funds to pick? (24yo)

Just got my first 401K at work through Mass Mutual. I have 17 options to choose from. I don’t think we have index funds, and most funds have high expenses between 0.75-1.66%. So I decided to care ...
0 votes
1 answer
131 views

Allocating money for investment

Context So I'm allocating around $500 per month for investments and I have enough savings for about 6 months should anything happen. I have no debts and I'm living a comfortable life in my early 20s ...
40 votes
4 answers
6k views

Justification for aggressive investment strategy when young?

I've frequently heard that the conventional wisdom is to be invested in an 'aggressive' investment strategy when young, and as you approach retirement age, migrate to a more conservative strategy. ...
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2 votes
1 answer
293 views

Index Fund Style: Blend or Value and Growth

I am trying to put together a portfolio and I am looking at ETF index funds. As i cover the different sectors, in the past I have had small, mid cap and large cap funds/etfs with both Growth and value ...
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