Asset Allocation

As you near retirement, your allocation should reflect your shorter investing horizon. In retirement you’ll begin to spend some of the income from your investments, and financial advisers generally recommend changes to your asset allocation to reflect this short term need for cash. As a result, the allocation to bonds typically increases while [...]

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Probably the happiest period in life most frequently is in middle age, when the eager passions of youth are cooled, and the infirmities of age not yet begun; as we see that the shadows, which are at morning and evening so large, almost entirely disappear at midday–Thomas Arnold 1795-1842, British Educator, Scholar
As you move into [...]

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“A comfortable old age is the reward of a well-spent youth. Instead of its bringing sad and melancholy prospects of decay, it would give us hopes of eternal youth in a better world.”–American Abolitionist, Lydia M. Child.
And so it is with investing, too. In your 20s and 30s, you have a significantly long investing [...]

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Emerging markets are less developed countries that are improving their free-market economy and standard of living. Emerging markets include such countries as Brazil, Russia, India and China. The question is whether an emerging market mutual fund should be a part of a diversified portfolio. to answer that question, several things should be [...]

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We discussed REITs in the first part of this series. Now let’s look at why you should consider including them in your portfolio.
The main benefit of REITs, in my view, is diversity. REITs are one of the few asset classes that are not highly correlated to the S&P 500. That means that [...]

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I like good values. Whether I’m buying a car, an investment property or a stock mutual fund, the last thing I want to do is overpay. For this reason, my portfolio is value overweighted. By the way, if the term overweighted is new to you, all it means is that the percentage [...]

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As we saw in Day 2 of this series, small cap stocks historically have enjoyed higher returns than large cap stocks. From 1926 to 1998, small caps have averaged a 12.18% return, while large caps have returned about 11.22%. Of course, small caps are more risky. The standard deviation for Vanguards S&P [...]

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