Comments on: The Principle of Asset Allocation Part1 http://www.thefinancialblogger.com/the-principle-of-asset-allocation-part1/ This is where your finance takes place Tue, 16 Mar 2010 09:31:45 +0000 http://wordpress.org/?v=2.9 hourly 1 By: The Financial Blogger http://www.thefinancialblogger.com/the-principle-of-asset-allocation-part1/comment-page-1/#comment-4943 The Financial Blogger Sat, 21 Feb 2009 20:40:39 +0000 http://www.thefinancialblogger.com/the-principle-of-asset-allocation-part1/#comment-4943 One Day, I think it used to be a good rule of thumbs but this is not good anymore. Imagine, I'm 27 and I should live until the age of 90. However, according to this method, I should already have almost 30% of my portfolio into fixed income... I think that your asset allocation should be more related to your investor profile (i.e. risk tolerance) than your age ;-) One Day,

I think it used to be a good rule of thumbs but this is not good anymore.

Imagine, I’m 27 and I should live until the age of 90. However, according to this method, I should already have almost 30% of my portfolio into fixed income…

I think that your asset allocation should be more related to your investor profile (i.e. risk tolerance) than your age ;-)

]]> By: OneDay http://www.thefinancialblogger.com/the-principle-of-asset-allocation-part1/comment-page-1/#comment-4920 OneDay Thu, 19 Feb 2009 14:46:13 +0000 http://www.thefinancialblogger.com/the-principle-of-asset-allocation-part1/#comment-4920 I was reading your post on Government bonds. I ended up into this post on asset allocation. Bonds is a good investment when it's part of your portfolio. Of course it depends of your investment profile. Generally speaking, there's a theory about the proportion of wealth invested in bonds and other type of investments as a function of the investors' age: For example, 25 years old --> proportion of 25% of your portfolio invested in bonds. 45 years old --> proportion of 45% of your portfolio invested in bonds. etc. What do you think about this theory? Thanks again. I was reading your post on Government bonds. I ended up into this post on asset allocation. Bonds is a good investment when it’s part of your portfolio. Of course it depends of your investment profile.

Generally speaking, there’s a theory about the proportion of wealth invested in bonds and other type of investments as a function of the investors’ age:

For example, 25 years old –> proportion of 25% of your portfolio invested in bonds.
45 years old –> proportion of 45% of your portfolio invested in bonds.
etc.

What do you think about this theory?

Thanks again.

]]> By: The Financial Blogger | It Is Time To Clean Up After The Holliday Season http://www.thefinancialblogger.com/the-principle-of-asset-allocation-part1/comment-page-1/#comment-4552 The Financial Blogger | It Is Time To Clean Up After The Holliday Season Thu, 22 Jan 2009 10:00:34 +0000 http://www.thefinancialblogger.com/the-principle-of-asset-allocation-part1/#comment-4552 [...] situation changed? Do you have the same goals? If yes, you don’t have to play around with your asset allocation. However, you must make sure that you are well diversified. If you were only in financials and oil [...] [...] situation changed? Do you have the same goals? If yes, you don’t have to play around with your asset allocation. However, you must make sure that you are well diversified. If you were only in financials and oil [...]

]]> By: The Financial Blogger | The Importance Of Market Fluctuation http://www.thefinancialblogger.com/the-principle-of-asset-allocation-part1/comment-page-1/#comment-2466 The Financial Blogger | The Importance Of Market Fluctuation Wed, 21 May 2008 10:01:05 +0000 http://www.thefinancialblogger.com/the-principle-of-asset-allocation-part1/#comment-2466 [...] fact, with a good planning and an asset diversification of your portfolio, you can average a return of 8% to 9% without living the market roller [...] [...] fact, with a good planning and an asset diversification of your portfolio, you can average a return of 8% to 9% without living the market roller [...]

]]> By: Dividends4Life http://www.thefinancialblogger.com/the-principle-of-asset-allocation-part1/comment-page-1/#comment-2077 Dividends4Life Tue, 18 Mar 2008 03:05:03 +0000 http://www.thefinancialblogger.com/the-principle-of-asset-allocation-part1/#comment-2077 I enjoyed your post. Thanks for sharing it! Best Wishes, D4L I enjoyed your post. Thanks for sharing it!

Best Wishes,
D4L

]]> By: Carnival of Personal Finance #144- St. Patrick’s Day Edition | beingfrugal.net http://www.thefinancialblogger.com/the-principle-of-asset-allocation-part1/comment-page-1/#comment-2076 Carnival of Personal Finance #144- St. Patrick’s Day Edition | beingfrugal.net Mon, 17 Mar 2008 18:06:41 +0000 http://www.thefinancialblogger.com/the-principle-of-asset-allocation-part1/#comment-2076 [...] The Financial Blogger explains the importance of asset allocation. [...] [...] The Financial Blogger explains the importance of asset allocation. [...]

]]> By: Weekly Dividend Investing Roundup - March 14, 2008 » The Dividend Guy Blog http://www.thefinancialblogger.com/the-principle-of-asset-allocation-part1/comment-page-1/#comment-2048 Weekly Dividend Investing Roundup - March 14, 2008 » The Dividend Guy Blog Fri, 14 Mar 2008 12:51:11 +0000 http://www.thefinancialblogger.com/the-principle-of-asset-allocation-part1/#comment-2048 [...] Financial Blogger wrote about one of my favorite topics - asset allocation [...] [...] Financial Blogger wrote about one of my favorite topics – asset allocation [...]

]]> By: The Financial Blogger | The Principle of Asset Allocation Part2 http://www.thefinancialblogger.com/the-principle-of-asset-allocation-part1/comment-page-1/#comment-2047 The Financial Blogger | The Principle of Asset Allocation Part2 Fri, 14 Mar 2008 11:00:07 +0000 http://www.thefinancialblogger.com/the-principle-of-asset-allocation-part1/#comment-2047 [...] we discussed the concept of asset allocation with a few examples. Today, I will explain different ways to have an optimal asset allocation [...] [...] we discussed the concept of asset allocation with a few examples. Today, I will explain different ways to have an optimal asset allocation [...]

]]> By: The Financial Blogger http://www.thefinancialblogger.com/the-principle-of-asset-allocation-part1/comment-page-1/#comment-2043 The Financial Blogger Fri, 14 Mar 2008 00:41:57 +0000 http://www.thefinancialblogger.com/the-principle-of-asset-allocation-part1/#comment-2043 Raj, If you are trying to "time" the market by leveraging in order to do a DCA, you might play a dangerous game. What if you are wrong and the market still goes down after you leverage? Any leverage strategies should be considered over a period of minimum 10 years. If not, you are better off playing a the casino ;-) In regards to your second question, I would say that you should have enough cash flow in your budget to cover for the interest. The magic behind an investment loan is based on the marvelous power of compound interest. If you are withdrawing dividend from your investment instead of reinvest this money in the market, you will not benefit from the full power of this strategy. In addition to that, you are putting at risk your debt as you depend on a few high paying dividend companies... Hope this helps! FB. Raj,
If you are trying to “time” the market by leveraging in order to do a DCA, you might play a dangerous game. What if you are wrong and the market still goes down after you leverage?

Any leverage strategies should be considered over a period of minimum 10 years. If not, you are better off playing a the casino ;-)

In regards to your second question, I would say that you should have enough cash flow in your budget to cover for the interest. The magic behind an investment loan is based on the marvelous power of compound interest. If you are withdrawing dividend from your investment instead of reinvest this money in the market, you will not benefit from the full power of this strategy. In addition to that, you are putting at risk your debt as you depend on a few high paying dividend companies…

Hope this helps!

FB.

]]> By: Raj http://www.thefinancialblogger.com/the-principle-of-asset-allocation-part1/comment-page-1/#comment-2039 Raj Thu, 13 Mar 2008 19:47:09 +0000 http://www.thefinancialblogger.com/the-principle-of-asset-allocation-part1/#comment-2039 Got any thoughts about Dollar Cost averaging as a leveraging Strategy (DCA)? How does it compare to the strategy of borrowing money and servicing the interest through monthly dividends? As dividends as mostly provided by financial institutions and given the current economic slow down where shares of banks have fallen isn't the latter strategy more risky? G.Grover Got any thoughts about Dollar Cost averaging as a leveraging Strategy (DCA)? How does it compare to the strategy of borrowing money and servicing the interest through monthly dividends? As dividends as mostly provided by financial institutions and given the current economic slow down where shares of banks have fallen isn’t the latter strategy more risky?

G.Grover

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