Bailing-Bob
Dryer sheet wannabe
- Joined
- Dec 16, 2006
- Messages
- 19
I am on my second reading of ESR-Bobs's book Live More-Work Less. I am giving serious consideration to his 16 asset class Rational Investors portfolio, except I do not intend to invest in the hedge funds or private equity. The other asset classes that I am on fence on are Oil & Gas (3%) and Commodities (4%). I am just not sure if those funds really dampen or increase the volatility of the portfolio in those low doses. If I were to include Oil & Gas and Commodities in my portfolio should I apply different re-balancing rules to those asset classes. My rule is to re-balance once per year. The Oil & Gas and Commodities classes are so volatile, I am wondering if I should apply a rebalance rule based on a certain percentage deviation from the target allocation. How do you typically address the rebalancing of extremely volatile asset classes such as Commodities and Energy? How much do those classes really add to return? Do you really believe they dampen volatility? Or are they just extra protection against inflation?