The term Asset Allocation usually means a mixture of stocks and bonds; a common mixture is 60% stocks to 40% bonds shown a “60/40”. I expand the term “stocks” to “equities’ that includes mutual funds and ETFs. I think of “bonds” as assets that generate a fixed income. I am retired with no earned income. My question is about including the following assets a part of my fixed income “bonds”:
1. A Traditional TIAA (fixed income, not equity) account that is distributed as a Minimum Required Distribution (MRD).
2. A whole life insurance policy the pays me a fixed income.
Currently I include the principle amount of the TIAA account, but not the whole life policy. The TIAA asset is about 1/3 of my current portfolio.
Note that both of these assets are inheritable by my heirs, which is one of my criteria to include an asset as part of my wealth.
What are your opinions on including the above assets as part of my asset allocation portfolio?
Examples of Asset Allocation Portfolios:
http://www.marketwatch.com/lazyportfolio https://www.bogleheads.org/wiki/Lazy_portfoliosCheers
Comments
My thinking follows.
Since, you are deriving income (and both have a value measured in dollars) it is my thinking they should be part of your overall portfolio's asset allocation ... but, your whole life insurance policy should be shown as a special asset and not part of your stock, bond or cash allocations while I'd include the traditional ira account as part of my fixed income allocation as it holds no equities.
Hope this helps.
Old_Skeet