So, thinking about the endowment model, and you've been a practitioner of
kind of asset allocation sort of ideas that are very heavy in what most would consider alternatives.
I would suggest that a retiree should look at their personal situation to determine what
kind of asset allocation to have.
It's out of scope for this article, but you should have some idea of what
kind of asset allocation you want, then decide which securities you want to buy.
She teaches you how to understand your own investment goals,
the kind of asset allocation you'll need to get there, and how you can go about building your portfolio around that information without paying a broker to do it for you.
What
kind of asset allocation would you use?
Not exact matches
That person needs knowledge
of asset allocation, but the truth
of the matter is a lot
of that
kind of thing has become commoditized.
You need an
asset allocation strategy, but first you need to understand what
kind of investor you are.
To learn about how to determine what
kind of asset mix is appropriate for your risk tolerance, see Achieving Optimal Asset Allocat
asset mix is appropriate for your risk tolerance, see Achieving Optimal
Asset Allocat
Asset Allocation.)
All you need to implement such an investment program are (1) some initial effort in mapping out an
asset allocation strategy (2) a calculator to divvy up your regular contributions and (3) discipline to stick to the strategy through all
kinds of market conditions.
The one that you select will depend on various factors, including your target
asset allocation and the
kinds of returns you want to see.
All you need to implement such an investment program are (1) some initial effort in mapping out an
asset allocation strategy (2) a calculator to divvy up your regular contributions and (3) discipline to stick to the strategy through all
kinds of market conditions.
It
kind of depends on your time horizon — think about it like
asset allocation and stock and bond mixes as you get older.
Don't be the
kind of investor that puts the majority
of your efforts into picking individual investments and then makes
asset allocation mistakes that destroy your portfolio value.
Mihir Worah, PIMCO's CIO
of asset allocation and real return, discusses what
kind of government bonds look most attractive and where the firm is concentrating investments on the yield curve in 2018.
Those are the
kind of considerations that should guide you, as well, in determining your own
asset allocation.
As certain
kinds of assets (like stocks or bonds) perform better or worse than others, your target
allocation (the percentage mix
of various investments that you've chosen) will get out
of whack.
Hi RIT, I thought you were mostly an index tracking
asset allocation kind of guy?