Asset Allocation

[KC Scott]

A very good friend here in KC used to work for 20th Century investments - Now American Century.
This was back in the mid 80's when 20th century mutual funds like Ultra and Vista were rocking.
Of course they are shit now, but I digress.

At the time I saw a presentation on Asset Allocation called the rule of 100

Basically, subtract your age from 100 and that's the % of your porfolio you should have in Cash or liquid assets
The remainder should be divided between various long and short term investment vehicles to include stocks, Mutual funds, bonds, real estate and whatever else you could make some $$$ on

For example, I'm 43 so I should have 43% of my total portfoilo in cash.
Of course at this precise moment I'm a fucking bear of epic proportion, so I'm 100%

The idea behind this is, as you get closer to retirement you ability to withstand a serious market downturn lessens.

My general allocation before I foresaw the coming market Armegeddon was:

30% Cash / Money Markets (OK so I didn't stick to the fucking rule)
60% Mutual Funds - a Mix of Index, Small & Mid Cap growth and Emerging Market funds (including the 401K)
10% In the stock trading portfolio

I didn't include real estate in this mix since it's not something I plan to liquidate until retirement.

Anybody doing anything different?

[Mister Bushice]

I notice that alll you ever do is criticize, mvscal. Never providing any useful information, just insults.

Why don't you just get the fuck out of this forum if you have nothing but insults to add? Your type of "help" is ideal for main street, but it only succeeds in ruining forums like ths for those who might be interested.

Seriously.

[Mikey]

Basically, subtract your age from 100 and that's the % of your porfolio you should have in Cash or liquid assets

For example, I'm 43 so I should have 43% of my total portfoilo in cash.

Better check your math.

[Mister Bushice]

hey I missed that too.

SO at 43, with 57% of your assets in cash, lets say you are working with a total of $500,000 in assets.

285,000 of thata shouldl be in cash or liquid?

what are good examples (outside of US green) of these cash or liquid assets? that seems like a very high number.

I'm goiing with the assumption here that these cash or liquid assets are low yield and very safe, easy to get to IOW you won't make much profit off them.

that's a pretty high number to have rotting in a savings account, ins't it?

[KC Scott]

Basically, subtract your age from 100 and that's the % of your porfolio you should have in Cash or liquid assets

For example, I'm 43 so I should have 43% of my total portfoilo in cash.

Better check your math.

Nice Typo by me - 57% of my assets should be stocks or funds - the 43% cash or equivilants was correct.


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what are good examples (outside of US green) of these cash or liquid assets? that seems like a very high number.

I'm goiing with the assumption here that these cash or liquid assets are low yield and very safe, easy to get to IOW you won't make much profit off them.

that's a pretty high number to have rotting in a savings account, ins't it?

There are several good vehicles for cash with little or no risk to principal -
Money Markets are what I choose - Most offer check wrinting privlages
CD's pay a little higher, but your money is tied up and you'll pay a penalty for early withdrawl

Here's a quick check off of Google on Money Markets and Higher yield savings:

Grand Yield Direct - 5.25%
GE Interest Plus 4.91-5.43%
AM Trust Direct 5.3%
Citibank - 5%

I think those are decent rates - Not stellar by any means, but given my particular fears about this market better than the alternative