Asset Allocation For Dummies by Perrucci Dorianne & Miccolis Jerry A

Author:Perrucci, Dorianne & Miccolis, Jerry A. [Miccolis, Jerry A.]
Language: eng
Format: epub
Tags: Personal Finance
ISBN: 9780470521939
Publisher: For Dummies
Published: 2009-04-01T04:00:00+00:00

Here we allocate 40 percent to 60 percent of your portfolio to equities, and anywhere from 15 percent to 35 percent to both fixed income and alternatives.

Controversial asset classes

In the three sample allocations we feature in the last few pages, the range of percentages attributed to the alternative asset class (comprising real estate and commodities) doesn't vary. Even though these investments may be considered controversial by some and are, by definition, nontraditional, they aren't simply for the more aggressive investors. Their role is to stabilize the portfolio (see Chapters 3 and 13). Given that role, they belong in virtually every portfolio. (The modeling that the wealth advisory firm Brinton Eaton did at the time of this writing indicated that the allocation percentages for the alternative asset class should be roughly the same across all investment strategies. Other firms may have different opinions.)

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