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You are here: Home / Archives for asset allocation

508 Plus: Annual Asset Class Expected Returns and Ranges Update

January 25, 2025 by David Stein · Updated February 4, 2025

This week on Plus episode 508, we review the revised asset class expected returns. We discuss the process, changes to the assumptions, and tools available that incorporate the revised assumptions. … [Read more...]

Filed Under: Money Plus Tagged With: asset allocation, asset allocation assumptions

502 Plus: TFLO Flash Crash, Active Asset Allocation, Coinbase, and Investing in Bitcoin

November 23, 2024 by David Stein · Updated December 16, 2024

In Plus episode 502, we discuss the one-day flash crash for the iShares Treasury Floating Rate Bond ETF in 2014. We discuss the reasons for the initial allocation to TFLO in the adaptive model portfolios back in 2018. We discuss the importance of making incremental portfolio changes compared to large moves. Finally, we discuss the improving financial situation at cryptocurrency custodian Coinbase and the ways to invest in Bitcoin. … [Read more...]

Filed Under: Money Plus Tagged With: asset allocation, Bitcoin, Coinbase, TFLO

491: The Five Layers of Investing

August 28, 2024 by Camden Stein · Updated September 7, 2024

We explore the five layers of investing, including which assets fit into each layer, and give examples of advertisements targeting each layer. The five layers are: 1. Short-term trading 2. Longer-term speculations 3. Individual securities 4. Diversified portfolios focused on underlying drivers and factors 5. Maximum diversification with few changes and just a few holdings Show Notes Asset Camp The Role of Emotions in Financial Decisions by David … [Read more...]

Filed Under: Podcast Tagged With: asset allocation, asset garden, trading

461 Plus: Updated Expected Returns, Index Rebalancing, and Portfolio Questions

January 13, 2024 by David Stein · Updated January 26, 2024

In Plus episode 461, we review the changes to the Money for the Rest of Us Plus expected return assumptions and discuss the resources available on the site for modeling portfolios using the return assumptions. We answer a question on how stock index providers, such as S&P, handle share count changes for determining the weighting of a holding within the index. Finally, David answers some questions on his portfolio, including a review of the asset category ranges he has had for the past … [Read more...]

Filed Under: Money Plus Tagged With: asset allocation, asset allocation assumptions, expected returns, index rebalancing, indexes, preferred stocks

451: How Much Should You Invest in Stocks? The Art of Position Sizing in a Volatile Market

October 11, 2023 by David Stein · Updated July 9, 2024

Our allocation to risky assets should vary based on the expected return, volatility, risk aversion, and how much we can earn risk-free. That means we should be taking less risk right now. Listen to learn why. Topics covered include: Why there are so few billionaires Why the hedge fund Long Term Capital Management imploded Why how much to invest is more important than where to invest How the Merton share formula can assist with determining what percent of our wealth to invest … [Read more...]

Filed Under: Podcast Tagged With: asset allocation, positive skewness, risk management, skewness, volatility drag

419: How to Make Portfolio and Asset Allocation Changes

February 1, 2023 by David Stein · Updated February 28, 2023

We consider four case studies in which individuals struggle to decide what to do with their investment portfolios. Topics covered include: Why it's so difficult to reenter the stock market after sitting on the sidelines and what to do instead What are the risks of having a too aggressive portfolio allocation in retirement and what to do instead What to do when an investment strategy has worked really well but you feel it is time to make a change How to decide on an … [Read more...]

Filed Under: Podcast Tagged With: asset allocation, portfolio construction, portfolio hedges

417 Plus: Which Assets Now, How Much in Real Estate, Disinflation, Foreign Taxes, and CEFs

January 21, 2023 by David Stein · Updated January 31, 2023

In Plus Episode 417, we consider whether there is an optimal price to renter the S&P 500 Index or other asset classes. We discuss what disinflation means. We consider what is a reasonable allocation to public and private real estate. We consider the impact of foreign withholding taxes on dividends. Finally, we look at the current closed-end fund landscape. … [Read more...]

Filed Under: Money Plus Tagged With: asset allocation, closed-end funds, disinflation, dividends, real estate, taxes

401: Why Diversifying Your Portfolio Feels Awful

September 7, 2022 by David Stein · Updated February 1, 2023

Warren Buffet said, "Diversification makes very little sense for anyone that knows what they’re doing." He also said, "Diversification is a protection against ignorance..." Most of us need that protection against ignorance, yet diversification often makes us feel bad when some of our holdings don't do as well as others. We make the case why we should diversify anyway. Topics covered include: Warren Buffet says it's crazy to own more than 30 stocks, but Berkshire Hathaway owns 48 … [Read more...]

Filed Under: Podcast Tagged With: asset allocation, Buffett (Warren), diversification, international stocks

340 Plus: Asset Allocation Assumption Update, Ponzi Schemes, and Hiring Investment Advisors

May 1, 2021 by David Stein · Updated May 5, 2021

In Plus Episode 340, we review the semiannual expected return and risk update for stocks, income strategies and bonds. We review new tools available for analyzing the model portfolios. We answer a member's question on how to avoid Ponzi schemes and discuss what to consider when hiring investment advisors including hedge fund strategies. … [Read more...]

Filed Under: Money Plus Tagged With: asset allocation, expected returns, investment advisors, member portfolio review, ponzi schemes

337: Why in the World Would You Own Bonds?

March 31, 2021 by David Stein · Updated January 25, 2023

With interest rates rising does it still make sense to own bonds? Yes. This episode explores the role of bonds including why they are more effective at hedging stock losses than protective put options. Topics covered include: David's business and investment philosophy How bond funds have performed in 2021 Three disparate views on the direction of interest rates from Capital Economics, Ray Dalio, and Hoisington Investment Management Company How to invest in China … [Read more...]

Filed Under: Podcast Tagged With: asset allocation, bonds, bonds - why own, call options, Capital Economics, China, China bonds, covered calls, Dalio (Ray), fixed income, hedging, Hoisington Investment Management, interest rates, options, put options

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