Asset Allocation for Generation X (20s & 30s)

“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 […]

Published or Updated: September 10, 2015

Asset Allocation in Action–Emerging Markets

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 considered, including the […]

Published or Updated: November 19, 2015

Asset Allocation in Action–Should a Diversified Portfolio Include a REIT Mutual Fund?

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 the performance […]

Published or Updated: March 30, 2012

Asset Allocation in Action–Value vs. Growth Mutual Funds

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 of my portfolio […]

Published or Updated: March 30, 2012

Asset Allocation in Action–Small Cap vs. Large Cap Mutual Funds

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 500 Index is […]

Published or Updated: February 14, 2013

Asset Allocation in Action–Domestic vs. International Mutual Funds

This has been a hot topic as of late. How much should one invest in international or foreign stocks? Let me first say that the question, as phrased, is a touch on the arrogant side. We Americans just assume that everybody knows that by domestic we mean U.S. stocks. I guess everybody does understand that, […]

Published or Updated: April 3, 2014

How Much to Invest in Stocks and Bonds

The allocation of your investments between stock and bond mutual funds is one of the most important asset allocation decisions you’ll make. Fortunately, there are some really easy to apply rules of thumb to help us make a reasonable decision. Before we get to how much to invest in stocks vs bonds, however, here are […]

Published or Updated: April 3, 2014

Asset Allocation in Action–Why Bother?

Picking the right asset allocation for your situation is as important as picking specific mutual funds. Your asset allocation will determine in large part how risky your portfolio is and what returns you can reasonably expect. Over the next week, we’ll look at allocating your investments between various asset classes (e.g., stocks and bonds, large […]

Published or Updated: March 30, 2012

Beginner’s Guide to Asset Allocation: Actively Managed vs. Index Mutual Funds

Question: Which is better, actively managed mutual funds or passively managed index funds? Answer: Yes. Little else will heat up a discussion among mutual fund investors than the question of whether actively managed mutual funds or index mutual funds are best. This question is not strictly a matter of asset allocation, but it’s such a […]

Published or Updated: August 6, 2015

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