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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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2answers
73 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 ...
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7answers
8k views

What is the best asset allocation for a retirement portfolio, and why?

Based on financial conversations I've had with trusted family members, I believe that asset allocation is one of the more critical things to "get right" during retirement savings. Based on an ...
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2answers
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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3answers
1k views

Long-term cash-equivalent ETFs for “cash” allocation in a portfolio?

My retirement account goal analyzer advises that I keep 3% in cash. My retirement date is over 30 years from now, so I can tolerate heavy volatility and certainly don't need liquidity. Does it make ...
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1answer
26 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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4answers
209 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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1answer
68 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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1answer
117 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 ...
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3answers
507 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 ...
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2answers
86 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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3answers
440 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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4answers
3k views

Should I include retirement funds in calculating my asset allocation?

When calculating my asset allocation for applying allocation guidelines, should I include my retirement funding or not? You see, my investments have an asset allocation. But then, so do my ...
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1answer
426 views

Asset Allocation and Timing with a Cash Windfall in Q1 2015

Alright so I'm 30 years old. I'm sitting on cash to invest for the long haul. It's decision time. Here is what I have learned from my research over the last few months: Proper asset allocation ...
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2answers
123 views

With all the different asset allocations out there, why is rebalancing important?

I understand the notion that I need to determine an asset allocation based on my risk preference and then rebalance annually or biannually to keep my asset allocation in line. However, consider that ...
11
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7answers
7k views

Is there a general guideline for what percentage of a portfolio should be in gold?

I have some gold (GLD), but not much - a little over 1% of my net worth, and about 2% of my non-retirement investments. I'd like to increase this position as an inflation hedge and to have something ...
3
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1answer
107 views

Setting and measuring risk profile target for retirement account

I understand that as you age you want to slowly lower the risk profile of your retirement account, but how should I determine how much risk I should take on currently and how do I measure how much ...
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2answers
148 views

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 ...
12
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3answers
927 views

Are there index tracking funds that avoid the “buy high - sell low” problem?

An index tracking fund is a fund that buys direct stocks with a view to directly matching a particular index (e.g. the S&P500 or Russell 2000). One way to allocate assets in such a fund is to ...
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7answers
29k views

Why I cannot find a “Pure Cash” option in 401k investments?

I am of an opinion that I should decide where my money should get invested and if it should get invested at all or not. When I looked at the investment options I have with my 401k money, I figured ...
2
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1answer
244 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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9answers
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 ...
2
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4answers
149 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) ...
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2answers
130 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 ...
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1answer
110 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 ...
11
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3answers
2k views

Couch Potato Portfolio for Europeans?

I recently came across the Couch Potato Portfolio concept and was happy to find an investment strategy that made sense to me. Its origin seems to be the Canadian version, and it has been translated ...
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3answers
556 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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1answer
362 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
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3answers
265 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 ...
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2answers
126 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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1answer
13k views

What are some examples of “fixed income” investments?

I'm using an online tool that my broker provides for balancing my portfolio according to my investor profile and it breaks down the suggested allocation into the following categories: Large Cap ...
0
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1answer
68 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 ...
11
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5answers
9k views

What percentage of my portfolio should be in individual stocks?

It's easy to find guidelines for how much of my non-retirement portfolio should be in stocks as an asset class (i.e. via mutual funds) but I'm having trouble finding recommendations for how much ...
4
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1answer
40 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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1answer
87 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 ...
2
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1answer
146 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 acheive risk parity because 80% of your risk is still in your ...
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2answers
103 views

Best Way to Allocate Invest Dollars Using a Market Timing Investment Approach

I was wondering if anyone knows of a way to best allocate my investment funds when using a Market Timing approach. For example, I have a market timing system I developed and tested since 2005. Every ...
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3answers
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, ...
5
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3answers
693 views

Asset Allocation Tools that understand Mutual Funds [closed]

I am looking for a tool that will help me understand my current asset allocation given that I invest only in mutual funds. What I want is something where I can enter my current fund share balances ...
11
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5answers
921 views

What fraction of a portfolio should P2P lending comprise?

Based on what I understand, traditionally we are supposed to put 70% money in stocks and 30% money in bonds (based on individual age, I am 33 right now). I have been experimenting on P2P lending and ...
9
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3answers
520 views

How to find a good third-party, 401k management/advice service?

I have a 401k with my employer that offers a pretty good contribution matching benefit. I am young and I've had the plan for about 5 years and my money is starting to grow into a pool that is big ...
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1answer
92 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 ...
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4answers
2k views

“Diversifying” by going Long and Short Simultaneously

I was hoping someone could take a critical eye to an idea i've had. Traditionally it's said that one should diversify across various asset classes and ultimately types to spread the risk out based on ...
4
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3answers
638 views

What evidence or research suggests that mid- or small-capitalization stocks should perform better than large caps?

In my 401k I have always allocated a greater percentage of my portfolio into mid cap funds because they seem to be riskier and have a higher upside. Yet, as of the past year or so, the large cap funds ...
4
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2answers
158 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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1answer
75 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 ...
4
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1answer
239 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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1answer
281 views

What does it mean that a mutual fund is some percentage “short in cash” or “long in cash”?

http://portfolios.morningstar.com/fund/summary?t=PTTRX&region=usa&culture=en-US Trying to understand this fund as I'm learning more about it. I don't understand this: What does it mean when ...
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5answers
3k views

Asset allocation software: Application or tool to help me rebalance my investment portfolio? [closed]

I'm looking for an application that can help me rebalance my investment portfolio. I'm not looking for something that will suggest percentages for each asset class. I'm looking for something that, ...
2
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3answers
350 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 ...
41
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4answers
5k 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. ...