Scott Burns -- How much diversification?

[intercst]

Article includes a chart describing the effect of moving from a 2-asset class allocation to 7-asset classes.

http://www.dallasnews.com/sharedcon...ns/2005/stories/072605dnbusburns.d44be68.html

intercst

 

[BigMoneyJim]

No-registration syndicated column here but without the chart: http://www.chron.com/cs/CDA/ssistory.mpl/business/3281839

 

[Spanky]

It seems that Scott Burn's six-fold passive portfolio has performed slightly better than Coffee House portfolio.

 

[preben]

Diversification rocks - in some cases more asset classes will drag down the return, but normally at less volatility - the "price" we pay .

 

[unclemick]

Diversification sucked back in the heady days of the 'da bull bubble' - Bernstein's portfolio's he posted on Efficient Frontier lagged the U.S. market.

But the worm turned after 2000 - and then guess what looked good - heh, heh, heh.

1. In hindsight - someone will always beat the pants off 'your' portfolio.

2. In my multi asset days(yes I was sinner in the 80's) - I tryed to swag weighted asset SD to get a portfolio SD (never heard of correlation that I can remember). Same with expected growth rates for each asset class. Was kind of a pain in the but and limited as to growth - better on SD.

3. In ER - defense is better than offense. Current portfolio yield being my linebackers - with a little diversification as cornerbacks and pension/SS as safety.

 

[ShokWaveRider]

Is there a list of what wach of the portfolios invests in? I searched Google for "Six Ways" portfolio and cane up with not much of interest.

Thanks

SWR

 

[ats5g]

SWR,

see this article from scott.

- Alec

 

[Olav23]

Six ways:

Vanguard Total Market Index
Vanguard Inflation Protected Securities
Vanguard Total Intl Stock Index
American Century Intl Bond Fund
Vanguard REIT Index fund
Vanguard Energy Fund

All in equal proportions.

 

[ShokWaveRider]

Six ways:

Vanguard Total Market Index
Vanguard Inflation Protected Securities
Vanguard Total Intl Stock Index
American Century Intl Bond Fund
Vanguard REIT Index fund
Vanguard Energy Fund

All in equal proportions.

Thanks