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Careful: You Might Be Risking Too Much For The Same Investment Return: 60/40 vs. 50/50 Portfolio
I have dialed my asset allocaton back to a 50/50 asset allocation currently holding 20% in cash, 30% in income funds, 35% in growth & income funds and 15% in growth funds. I am thinking the market for 2016 will be much like that of 2015 and with this I have reduced my allocation in stocks due to their relative high valuation with reported earnings running around a TTM P/E Ratio of 23 for the S&P 500 Index and in bonds due to anticipated rising interest rates. In equities, I am favoring good dividend paying world equity and allocation funds over domestic and in fixed income I am favoring short duration, bank loan and convertible funds.
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