http://funds-newsletter.com/aug20-newsletter/aug20.htmAre Your Stock, Bond, or Cash Allocations Out of Whack?
/Now is a good time to take a glance at your asset allocations as recent fund performance may have changed how your funds are weighted within your portfolio. Thanks to the recent four month-plus rally in stocks, and to a lesser, but still as nearly an eye-popping extent in bonds, even assuming you changed nothing in your portfolio in response to the coronavirus crisis, your overall portfolio value may be back to near even to where it was before the crisis hit. While all types of funds have seen marked improvement, the springback among particular stock and bond fund categories has been highly scattershot. At the same time, cash returns are now barely above zero./
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Comments
I always enjoy reading Dr. Madell's newsletter. Recently, he started offering a free portfolio review for his readers. In this edition, he comments on some of the portfolio's he has reviewed. For me, this was an interesting read.
As for my cash, bond and stock allocation ... My baseline asset allocation (being retired) is 20/40/40 with the ability to overweight (or underweight) my stock and bond areas by up to 5% each, if felt warranted. I generally let my cash allocation float. Curently, I'm 15/45/40 putting me 5% overweight in the bond (income) area of my portfolio due to low cash yields. I am presently neutral with my stock allocation eventhough I feel stocks are overbought. Within my stock allocation I'm about 50% value / 50% growth along with being about 65% domestic and 35% foreign. My investment foucs over the past five years, since I retired, has been to grow the income stream that my portfolio generates while at the same time continue to grow my principal to offset inflation. Thus far, I have grown (on average) income generation by about 15% a year and principal by about 8.5% a year.
Old_Skeet