Monday Macro – The S&P continues to outperform, my new asset allocation table, and pricing power stocks in a novel index
This week I’m launching my very simplistic asset allocation overview. Plus we Brits have gone mad for WFH, which is why REITs are still to be avoided
This week I’m launching what I hope will be a useful new feature. It’s based on a few comments and emails I’ve received from readers asking for an asset allocation overview i.e. some suggestions about how to plan a portfolio between different asset classes.
The approach I’ve taken is outlined in the big old table below which shows various broad asset classes – equities, bonds, cash – which are then broken down by sub-asset classes, geographies or sectors. Rather than suggest some random % of a portfolio number I’ve gone for a simple overweight, underweight or neutral grade or measure, with some added comments for context.
The basis for this grading is simply my own judgement and the sense I get from the constant stream of research notes and strategy papers I see i.e. it’s an aggregate, but idiosyncratic (subjective) measure, not based on any great quantitative genius.
It’s also important to say that this is really only designed for the more dynamic or tactical investor – if you are a long-term buy-and-hold investor with a 10-year plus window, then ignore the table and just stay invested in say 100% equities. And don’t keep trading in and out of positions!
But there are investors who have a different time window or are more tactical, in which case I hope the table below is of use. I don’t intend to change it very often but I will update weekly if necessary.
Keep reading with a 7-day free trial
Subscribe to David Stevenson's Adventurous Investor Newsletter to keep reading this post and get 7 days of free access to the full post archives.