Go to Jeff Salisbury LWGate Home Page.From: Randy Barnes <rbarnes@mindspring.com>
Subject: re: asset allocation
Date: Wed, 07 Oct 1998 08:21:04 -0400
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Peter,
I for one think you're on the exact right path. forget diversifying away
your nest
egg. All this will do is stabilize your account, and cost you several
percentage
points, IMHO. Live with the volatility and reap bigger rewards down the
road. Since
this is an IRA you're talking about I assume you can buy common stocks
and that's
what I'd do.
Keep your account simple and stay invested. This is a great time to be
getting in,
but over the long haul that doesn't matter. Add all you can as often as
you can and
30 years will make you a millionaire with one hand tied behind your
back. (Actually
a million may not be enough for your basic needs by then)
I love SPY, the S&P 500 index shares traded like a stock on the Amex.
Also you
should consider the "fab-4" (my term) which is a variation of the
Foolish Four, with
much better and more consistent results. If you like, check out our
investment club
site http://www.mindspring.com/~rbarnes/aaic.htm - hit the links to
"RP"version,
and check out our portfolio. The "fab-4" are in italics. Here's a
little example of
what you'll find.
RP 4 Fool Four
Past 5 Years: 25.53% 21.29%
Past 10 Years: 23.36% 20.92%
Past 15 Years: 25.04% 21.66%
Past 20 Years: 24.32% 20.87%
Past 27 Years: 24.16% 21.97%
Past 37 Years: 19.64% 18.20%
It's your money. use your head, but do it so you can sleep soundly at
night.
Compare any recommendation to the S&P return, and to the numbers above.
I think
you'll make the right decision.
- -Randy
> I am in the process of picking an investment for a new IRA and have
been
> thinking about asset allocations.
> The premise of a balanced portfolio of various asset classes and
investments
> makes sense in principle. On the other hand I can't exactly see the
problem
> with picking the best performing asset class and sticking with that
one.
> I have at least 30 years for the money to grow and...
> Thanks
> Peter
- -
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