Portfolio Asset Allocation
HankF
Posts: 11
I have long followed Ric Edelman, who is a somewhat well-known financial advisor. I have followed his advice loosely over the years. Ric is anti-gold like some other well-known advisors. Ric believes that no more than 5% of your portfolio should be in PMs. Thank goodness I haven't listened to that particular piece of advice.
For those that are not 'all-in' to PMs and given the state of the world today, does anyone have an Asset Allocation model that they follow? My model as of today is:
US Large Value Stocks - 11%
US Large Growth Stocks - 11%
US Mid Value Stocks - 9%
US Mid Growth Stocks - 8%
US Small Value Stocks - 6%
US Small Growth Stocks - 7%
Intl Value Stocks - 8%
Intl Growth Stocks - 6%
Emerging Markets - 4%
Real Estate (not primary residence) - 4%
Physical Gold/Silver - 10% (ratio 55 oz. silver to 1 oz. gold)
Gold/Silver Mining Stocks - 10%
Cash - 6%
Most of the above stocks are ETFs and I am not a very active trader although I add physical PMs about once per month. I see 20% as the bare minimum that I will keep in PMs (physical and miners) going forward in the short run. If anyone has a portfolio model that they like to follow, please post. I am seriously considering trimming back a bit on the non PM stocks, but certainly would like to hear what others are doing. I am 45 years old and not planning on retiring for at least 10 years.
Thanks,
Hank.
For those that are not 'all-in' to PMs and given the state of the world today, does anyone have an Asset Allocation model that they follow? My model as of today is:
US Large Value Stocks - 11%
US Large Growth Stocks - 11%
US Mid Value Stocks - 9%
US Mid Growth Stocks - 8%
US Small Value Stocks - 6%
US Small Growth Stocks - 7%
Intl Value Stocks - 8%
Intl Growth Stocks - 6%
Emerging Markets - 4%
Real Estate (not primary residence) - 4%
Physical Gold/Silver - 10% (ratio 55 oz. silver to 1 oz. gold)
Gold/Silver Mining Stocks - 10%
Cash - 6%
Most of the above stocks are ETFs and I am not a very active trader although I add physical PMs about once per month. I see 20% as the bare minimum that I will keep in PMs (physical and miners) going forward in the short run. If anyone has a portfolio model that they like to follow, please post. I am seriously considering trimming back a bit on the non PM stocks, but certainly would like to hear what others are doing. I am 45 years old and not planning on retiring for at least 10 years.
Thanks,
Hank.
0
Comments
US Stocks ( equal split between LC, MS and SC) 30%
Foreign stocks---20%
Bonds-----short term 20% (this is a dramatic decrease in my recommended structure over LY as of Oct 1 , 2011's
PM's-----15% ( gold 60%/40% silver)
Foreign cash equivalents 15% (Canada, Aussie, Yen and Swiss Franc for quite awhile now. Looking at a few others now)
PM stocks at 5% can be substituted for higher risk tolerant clients and swapping an equal prorated portion of each of the above.
A little unorthadox. Port allocation can differ dramatically for me over the previous year including the use of short hybrid vehicles.
JMFO. MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
I have a little more exposure to international stocks, I belies I am about 12 percent bonds/stable, 35 percent international and the balance in us stocks large, mid and small. I have quite a long time horizon and basically while there may be more volatility in the international stocks, hopefully those swings will be smoothed out by the time I am ready to tap this 401k.
So, that's what I do. Now, to answer your question, I would say that if you can stomach buying in at these high of prices go for it! However I would probably leAn more towards gold per the GSR.
Or, you could have the best of both worlds and buy some high dividend US stocks or dividend ETF funds and take the dividend and throw that into PMs.
Personally, if it were me I would lay out the cash for some 1oz gold eagles. Based off your asset allocation I would ramp up another 5-7% into physical PMs.
My two cents b
As times have changed, I've placed more value on narrowing down the number of asset classes in my portfolio, and in making my assets more easily accessible.
We had a regular here who used to recommend no more than 5% in precious metals. The problem I have with being over-diversified is that you can be sunk in 6 losing categories, up in 6 more - and not have time to properly manage any of them.
I knew it would happen.
Excluding primary residence and personal "stuff" (coin collection, guns, cars, art, antiques, etc) I'm about:
15% rental real estate (positive cash flow and LTV ~20% i.e 80% paid off)
10% precious metals (100% physical, in the form of about 50% silver, 30% gold, 20% platinum, 99% of it in 2 SDBs)
70% stock (of which, 15% is in a mutual funds 401k (20% of that foreign/ international stocks), 20% in a managed IRA account (~50 diversified US industrial stocks, with an emphasis on energy, health care, and technology) and the rest in self-directed taxable stock trading accounts (concentrated positions in about a half dozen very closely watched securities of my choosing, each usually built up over a couple years, held for years while the story plays out, and sold over years as the business matures)
and
5% cash/ money market/checking
no bonds currently
Liberty: Parent of Science & Industry
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>I try to be 100% with what's currently making money. Spreading it out to me is the same as hedging. While hedging protects from losses, it also costs you profits. If you're going to gamble, put all the money one a single square. >>
Makes sense to me. Energy, ags, and PM's are a good place to be for a while. I think 70% in stocks is high, especially if its just in major funds. But if a large chunk of that is in the materials sector then I'm fine with it. Personally I think PM's should be a minimum of 20-30% with that covering physical metal and PM related stocks.
I'd have no problem being 80% in energy, ags, and metals. Never have been a believe in the standard 60/40 or 70/30 stock to bond type allocation. If everyone is doing it, and they are, then it has limitations. Without at least a 20% allocation to PM's one might as well not be in them at all other than for a few thousand bucks laying around in shtf gold/silver.
roadrunner
18% in home equity
82% in precious metals, physical only
3% in cash
3% in other "stuff"
========================
100%
I guess you could say that I'm in derryb's camp.
I knew it would happen.
1) I like the 30% US stocks recommendation that you suggest. I think that I will implement that.
2) How do you purchase cash equivalents from other countries such as the Canadian $, the yen or the Aussie $. I have had others recommend holding Canadian $'s.
3) What type of bonds are you holding? I have recently read that Buffett has stated that US Bonds have little or no value and with interest rates about as low as they can go, US Bonds are not a good investment today. I have never been one to buy bonds, but they certainly get recommended as one gets older.
4) I am surprised that your PM holdings aren't a little higher, percentage-wise.
Hank.
My allocations also consists of a large stock component but I have decided to keep at least three years expenses (I'm retired) in cash, and I like a much larger international exposure. The biggest growth in the years ahead will be in the emerging markets area. One other idea, again depending on your age, some good dividend paying stocks.
We also have a large amount tied up in tangibles, antiques, coins, etc. They have been the big winner for the last 30 years or so. Stocks do have the potential to become worthless, but you can always enjoy your "stuff"
Edited: Saturday April 09, 2011 at 10:14 AM by derryb
I'm not going to gamble with my life savings. Calculated, informed risk management and strategic asset allocation may limit overall returns, but protects against a single square suddenly turning against you and devastating the value. Periodic portfolio rebalancing, by selling winners or allocating new money differently, can enhance both returns and safety.
Good luck to all, particularly those with the courage to post their invesment portfolio asset allocation numbers!
Liberty: Parent of Science & Industry
70% US Stocks
20% Foreign Stocks
3% Physical gold
Blance in cash , most likely to be more PM's when the price settles.
The majority of my stocks are large caps with dividend yields in the 5-6% range (based on my purchase price). I don't count house, cars, coin collection, etc.
World Collection
British Collection
German States Collection
20% Au & Ag (physical)
10% natural resources stocks
10% domestic large cap stocks
5% gov bond funds
5% global/emerging markets stocks
--Severian the Lame
<< <i>I try to be 100% with what's currently making money. Spreading it out to me is the same as hedging. While hedging protects from losses, it also costs you profits. If you're going to gamble, put all the money on a single square.
Edited: Saturday April 09, 2011 at 10:14 AM by derryb
I'm not going to gamble with my life savings. Calculated, informed risk management and strategic asset allocation may limit overall returns, but protects against a single square suddenly turning against you and devastating the value. Periodic portfolio rebalancing, by selling winners or allocating new money differently, can enhance both returns and safety.
Good luck to all, particularly those with the courage to post their invesment portfolio asset allocation numbers! >>
No matter where you put your savings you are taking a gamble to some degree. The degree of risk is directly proportionate to the degree of gain (or loss). PM fundamentals make the long term outlook a low degree of risk. Speculation and smackdowns are making the short term PM outlook risky and volatile, right where I want to be with a certain percentage of my investments. Keeping it under the mattress or getting 1% on a CD just ain't my cup of tea.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
On a net basis, subtracting out mortgage debt, my current asset mix is:
45% -- rental real estate
10% -- undeveloped land
10% -- coins and PMs
15% -- stocks (primarily in retirement accounts)
5% -- cash
15% -- primary residence
I never saw this question. I feel bad. Here you go---
<Thanks to all for their opinions and information! A couple of questions/comments for MJ>
<1) I like the 30% US stocks recommendation that you suggest. I think that I will implement that>
It seems to be working pretty well.
<2) How do you purchase cash equivalents from other countries such as the Canadian $, the yen or the Aussie $. I have had others recommend holding Canadian $'s.>
I have Canadian and Swiss Treasuries denominated in their respective currency. If you need a good broker pm me. I own Aussie, Yen, Swiss Franc, Swedish Krona and a few other smaller currency positions in 3 month CD's denominated in their respective currencies which I rollover or not. Only the Aussie Dollar throws off yield. I do like the mix of this total lot. I do this through Everbank. I'm a long time customer. www.everbank.com.
I've always own some Berkshire stock so I have respect for Buffett. However, that's were it ends for me with him. I like having bonds in the mix even today. I especially like muni's if that works for your tax bracket. I prefer to keep muni's only in a tax deferred account. The two funds I like if you don't want to pick individual bond vehicles: Harbor Bond (Gross) and Fidelity Intermediate Muni income. If you want to reach for yield with a little more risk look at Doubleline Total Return, Last I looked it yields well over 7%. I believe these are also Kiplinger approved.
<4) I am surprised that your PM holdings aren't a little higher, percentage-wise>
I totally got out of pm stocks several months ago and I did fell a little naked for awhile in that part of my port. However, I did take those proceeds and bought more physical with it bringing me to a little over 20% portfolio wise. The surge in pm's did take my total portfolio a little out of whack. It still is. I may move a portion of it to my trading account and beef that up a little. I don't count any of my collectibles (coins, wine, sportscards, rare books etc) or any of my trading accounts in my portfolio. I also do not include my primary residence,
The only portfolio moves I've done recently ( 30 days ago or so) was trading out of some physical silver for gold. That part I did rebalance to get me back to 60/40 ish.
All the best. MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>I try to be 100% with what's currently making money. Spreading it out to me is the same as hedging. While hedging protects from losses, it also costs you profits. If you're going to gamble, put all the money on a single square. >>
Not buying it. Strangely enough 100% of my portfolio is making money and it's spread out. They do so on their own schedule. Foreign currencies- check. PM's- check. Stocks- check. Bonds- check. Not hedging. It's controling risk and asset protection.
The metals market and stock market are not supposed to be used as gambling venues. I suppose a lot of people use them for that purpose. Me? I think I would rather do my gambling in Vegas surrounded by pretty women, wine and friends. that's just me, to each is own and do what works for you. Leaning all in one direction doesn't do it for me. I've seen too many go bust doing it. Some have been up over 1,000% with all their eggs in one basket and amassed fortunes only to see it all go to next to zero. Sometimes practically overnight it seemed.
Diversifying I'm not into. Spreading risk I'm into. There is a difference. JMHO. MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
congrats, and
Liberty: Parent of Science & Industry
<< <i>I try to be 100% with what's currently making money. Spreading it out to me is the same as hedging. While hedging protects from losses, it also costs you profits. If you're going to gamble, put all the money on a single square. >>
"All?" on a single square?? How often does the ball land on your number?
Liberty: Parent of Science & Industry
<< <i>I put some cash into a G-String the other day, about 80% of what I had in my pocket. Does that count?
Was that "an investment" or the down payment on a "performance contract"?
I knew it would happen.
Liberty: Parent of Science & Industry
Beanie Babies: 30%
Magic the gathering cards: 10%
Coins: 10%
Precious Moments: 5%
Precious metals: 7.5%
Groceries: 5%
Pet rocks: 2.5%
Some of my portfolio has not worked out, I am hoping the Pet Rock makes a comeback.
<< <i>Derryb, I have to ask where is all your 100% is right now? and please keep us informed when you change, because I'm looking to quit my day job
That was two years ago. Position constantly changing. Aside from my home and personal property I'm currently about 40% physical gold (50% of that is collector coins) and silver eagles, 40% paper silver (long and shorts constantly changing and 90% of that is in IRAs) and 20% cash. I am able to pursue risk in long term metal because of very good retirement income; my livelyhood and comfort is not dependent on the price of metal. Everything in metal is basically just my current form of savings. I live well below my means, am comfortable and enjoying a fairly simple life. As far as sharing investment decisions - what works for me doesn't always work and when it does there's no guarantee it will work for someone else. Best to read all views, stay informed and make your own educated decisions. This is what has worked for me. The only true advice I can offer anyone is to make reducing personal debt a priority, even over stacking.
When I want a new toy, I sell some metal. Most of it will end up going to my heirs - I have no problem with that.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I like having some physical, but no where near the big percentages many of the stackers shoot for here. maybe 6-7% of my portfolio. Even though many on here think of physical metal as very safe, I think we all realize,they can be very volatile, as much as stocks, but physical lacks the liquidity, especially on the buy side. The latest market move is a great example of that.
Not counting my house, I have about 25% in cash for dry powder, because other forms of fixed income yield way to low relative to interest rate risk. Most of the rest is spread between individual stocks.
My metal focus is now on some junior miners, that sector should have some of the biggest gains in the market at some point, because they are a few standard deviations below the norm and have been decimated, eventually it will go the other way, but it may be a while. Other than nibbling, I think it's still better to wait and buy the mining stocks after the turn, because cheap can always get cheaper. I might add, I also think having a decent amount of money makes diversifying more important not less, because we all have very limited ability to read the future. Sure things in investing, correlate negatively to reality in most cases
Very interesting to read more ideas on this subject
edit: it would be cool if HankF came back with a 2-year-later update, but it doesn't appear he posts much
Liberty: Parent of Science & Industry
Liberty: Parent of Science & Industry
<< <i>I try to be 100% with what's currently making money. Spreading it out to me is the same as hedging. While hedging protects from losses, it also costs you profits. If you're going to gamble, put all the money on a single square.
Edited: Saturday April 09, 2011 at 10:14 AM by derryb
I'm not going to gamble with my life savings. Calculated, informed risk management and strategic asset allocation may limit overall returns, but protects against a single square suddenly turning against you and devastating the value. Periodic portfolio rebalancing, by selling winners or allocating new money differently, can enhance both returns and safety.
Good luck to all, particularly those with the courage to post their invesment portfolio asset allocation numbers! >>
This post makes huge sense!
I give away money. I collect money.
I don’t love money . I do love the Lord God.
15% PM's - 90% gold
- 10% silver
Edited: Monday April 02, 2012 at 9:04 AM by Baley
15% rental real estate
10% precious metals
70% stock
and
5% cash/ money market/checking
By April 2015, the numbers had changed to 10% real estate, 5% precious metals, 82% stock, 3% cash, due to relative market performance of the sectors.
So, over past several weeks, sold about 10% of the stock to raise cash levels and buy additional tangible assets
Liberty: Parent of Science & Industry
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>I continue to convert physical gold into physical silver. >>
Isn't that kind of conversion a (28%) taxable event if one has a profit position on the gold?
Liberty: Parent of Science & Industry
He said the only way I would ever have a chance of doing it is to put 40% in equities, 40% bonds and the rest in lotto scratchers!
<< <i>
<< <i>I continue to convert physical gold into physical silver. >>
Isn't that kind of conversion a (28%) taxable event if one has a profit position on the gold? >>
Yes. My sales are gold collector coins that are always for sale at a profit. I'm currently reinvesting the proceeds into my silver ASE hoard instead of more gold.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
About 12% in individual munis but have been as high as 20% but they have been maturing and I'm not reinvesting at these levels as am waiting
for 3% on the 10 year treasury before I will buy and when I do I will go out to 12-15 year maturities) A or better solid revenue and GO bonds.
Munis have been one of the best calls I ever made for my clients when I rang the bell loudly in the 08-09 crash and Meredith Whitney scare of fall 2011.
Also currently about 13% cash and balance in rare coins about 10%.
No PM's. I did not ride it up or down.
This portfolio has been this way for about 7 years as I simply rebalanced.
I give away money. I collect money.
I don’t love money . I do love the Lord God.
Actually the best recent pickup was about two years ago when I bought 11 tons of field gear off a USMC base here in SoCal.
If you want an eye opener go to Bonhams militaria auction 4/29/15 in NYC.
It's a waste of time to continue to figure out net worth and percentages allocations thereof. To me, WW2 militaria is at the same point cars and coins were 30 years ago or California real estate 40 years ago.
<< <i>With silver at $15-16 and the GSR above 70, I thought it might be a good time to pick up 90% Kennedy's & Franklin's.
Actually the best recent pickup was about two years ago when I bought 11 tons of field gear off a USMC base here in SoCal.
If you want an eye opener go to Bonhams militaria auction 4/29/15 in NYC.
It's a waste of time to continue to figure out net worth and percentages allocations thereof. To me, WW2 militaria is at the same point cars and coins were 30 years ago or California real estate 40 years ago. >>
This is the most interesting thing I've read here in a hot minute....keep us posted. As a jeep guy I get it, just don't think about it until the Barret auctions throws it in the mix.
best of luck to all
Liberty: Parent of Science & Industry
BST Transactions (as the seller): Collectall, GRANDAM, epcjimi1, wondercoin, jmski52, wheathoarder, jay1187, jdsueu, grote15, airplanenut, bigole
<< <i>I am currently 65% global stocks ( 85 % individual US stocks and 15% exposure to international are in the efa and vgk).
About 12% in individual munis but have been as high as 20% but they have been maturing and I'm not reinvesting at these levels as am waiting
for 3% on the 10 year treasury before I will buy and when I do I will go out to 12-15 year maturities) A or better solid revenue and GO bonds.
Munis have been one of the best calls I ever made for my clients when I rang the bell loudly in the 08-09 crash and Meredith Whitney scare of fall 2011.
Also currently about 13% cash and balance in rare coins about 10%.
No PM's. I did not ride it up or down.
This portfolio has been this way for about 7 years as I simply rebalanced. >>
I rebalanced from cash and bought more stocks recently.
I give away money. I collect money.
I don’t love money . I do love the Lord God.