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Re: Asset Allocation/Fund Advice
Old 03-06-2005, 04:49 PM   #21
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Re: Asset Allocation/Fund Advice

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I thought this was a forum on "Investment Strategies" - what is your point, gentlemen?

JohnP
JohnP, I may have figured out the connection. I think the point is a lot of cops' assets in donut shops.

REW
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Asset allocation for young dreamer
Old 03-09-2005, 06:33 PM   #22
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Asset allocation for young dreamer

As usual, I'm still trying to come up with a reasonable asset allocation for the "volatile" portion of my portfolio. Would be curious to hear anyone else's thoughts...age 23, long time until I will need the money (if ever):

US large cap 14%
US small cap 8%
Intl large cap 14%
Intl small cap 8%
US RE 6%
Intl RE 6%
Commodities 12%
Gold 8%
US bonds (intermediate term) 12%
Intl bonds (unhedged, intermediate term) 12%

Plus, a hefty portion of i-bonds on the side to help anchor the portfolio.
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Re: Asset Allocation/Fund Advice
Old 03-09-2005, 08:01 PM   #23
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Re: Asset Allocation/Fund Advice

Well soup, if it were me I would just divy up the
equity in equal piles ...... but you are doing great.
I hope you are using index funds.

Cheers,

Charlie
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Re: Asset Allocation/Fund Advice
Old 03-10-2005, 03:59 AM   #24
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Re: Asset Allocation/Fund Advice

Hi Charlie - you're saying equal piles of large cap and small cap? Wouldn't that overweight small cap relative to the "market" portfolio (which seems to be about 70% large cap, 30% small cap)?

And yes, I'm using low-cost index funds for as many of the classes as possible, with the lowest-cost funds for the remaining classes that don't have a true "index" fund.
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Re: Asset Allocation/Fund Advice
Old 03-10-2005, 06:16 AM   #25
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Re: Asset Allocation/Fund Advice

With a portfolio value of only $30K you may already have too many asset classes.

Grumpy
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Re: Asset Allocation/Fund Advice
Old 03-10-2005, 06:48 AM   #26
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Re: Asset Allocation/Fund Advice

Hey Grumpy, would you expound on that? My portfolio is small, too, and I'd like to know what constitutes too many asset classes, thanks!
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Re: Asset Allocation/Fund Advice
Old 03-10-2005, 08:10 AM   #27
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Re: Asset Allocation/Fund Advice

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Hey Grumpy, would you expound on that? *My portfolio is small, too, and I'd like to know what constitutes too many asset classes, thanks!
It is when the fees (maintenance fees, low fund balance fees, trading fees, etc.) become a significant percentage compared to the expected returns.
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Re: Asset Allocation/Fund Advice
Old 03-10-2005, 08:12 AM   #28
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Re: Asset Allocation/Fund Advice

Hi soup,

If you want equal market weight why not just buy
TSM and be done with it? Yes, the slice 'n dice
coffeehouse approach overweights small cap
and value, but that's what I like about it. Most
everything I have read says that small value
and large value have historically paid a premium.

Also, overall volatility is reduced by equally weighting
multiple asset classes ...... and you get a little
premium thrown in by rebalancing. If you want
market weight, you have to be prepared to pay
the piper like when the recent bubble burst.

Cheers,

Charlie
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Re: Asset Allocation/Fund Advice
Old 03-13-2005, 06:14 AM   #29
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Re: Asset Allocation/Fund Advice

I am with Charlie! Market weight does not really matter does it? I find the asset classes I like and divide the cash evenly between them. If I suddenly decide to underweight something - maybe it should not be there at ALL. I admit I have no CLUE what will do best in the future - so even share to all (that I include) makes the most sense.

I DO also like the value twist mentioned. Generally my portfolio is a "no asset class left behind" portfolio with index funds/ETFs and low cost funds.

Cheers!

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Re: Asset Allocation/Fund Advice
Old 03-13-2005, 10:08 AM   #30
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Re: Asset Allocation/Fund Advice

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Also, overall volatility is reduced by equally weighting
multiple asset classes ......
Is that really the case? I had never heard that before, although I don't see why it couldn't be true.
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Re: Asset Allocation/Fund Advice
Old 03-13-2005, 07:43 PM   #31
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Re: Asset Allocation/Fund Advice

Soup, when I said "equal weighting" I was
being a little guilty of hyperbole ..... should
have just said that non-correlated asset
classes tend to reduce overall volatility of
a port. I don't have any specific data that
says equal weighting is the best approach,
but it just makes good intuitive sense to me.
Some call equal weighting the "coward's
portfolio". The optimum weighting in the
future is any body's guess. Just to prove
I am a little conflicted on this, I would not
give the same weight to "precious metals"
or "emerging markets" as to the standard
6 asset classes of the "coffeehouse" .

End of ramble.

Cheers,

Charlie
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