Originally Posted by yakers
So what % of your AA and what type of bonds/fixed assets do you have?
I've gone through various adjustments in my speadsheets to determine just what categories to track, given that you can argue that things like utilities/REITs could be in a quasi-fixed income (part equity, part inflation hedge, part 'relatively' fixed-income), and just how funds like Wellesly would be categorized. However, given that I'm currently 29, I'm trying to keep myself from going too conservative at the present:
% of Net Worth / Current pre-tax yield
1.07% Utilities, 4.6% (will be increasing to about 2%)
8.81% REITs, 7.2%
8.38% Commodities, 5.2%
9.18% Municipal ETFs, 5.6%
18.72% Preferred stock, 8.4%
3.38% Closed-end bond funds, 7.7%
2.47% Individual Corporate Bonds, 9.2%
9.51% I-Bonds/Treasury Inflation Indexed Bond, 4.40% (avg 3.38% fixed + CPI)
61.5% Total, 6.7%...or, for argument's sake,
43.26% "Traditional" Bond fixed-income holdings, 5.3%
Hmmm..now that I update my AA and look at the above numbers...I'm starting to wonder if I should go for a name change to include some more equity exposure?
Why do I include commodities/REITs/Utilities in my quasi-fixed income? If you include inflation-indexed bonds as "fixed income", their ultimate yield will depend on the movement of commodities. While equities of oil and coal producers will not perfectly mimic the movement of commodities (and while there are many other components to your CPI than just oil), and although utilities and Real Estate are likewise imperfectly correlated to inflation, I figured it was worth a shot.