MONEY – Asset Allocation

The original article on money management lead to a relevant number of question on the specific topic of Asset Allocation. To build up on this fondamental, I decided to share some examples of Asset Allocation, starting with the one that I use. Such allocation can entirely be done via ETFs.

Please let me know any question or suggestion.

DISCLAIMER: I AM NOT A FINANCIAL ADVISOR. PLEASE LOOK FOR A QUALIFIED AND REGULATED FINANCIAL ADVISOR BEFORE MAKING ANY INVESTMENT DECISION. THE ALLOCATIONS STATED IN THIS ARTICLE IS FOR ILLUSTRATION PURPOSE AND CAN NOT BE CONSIDERED AS FINANCIAL ADVICE.

Before giving any example of allocation, there are two rules that stand true among highly successful investors.

Rule number 1: you need to diversify the risk in your portfolio and can not rely on a single asset class, regardless of your personal preference

Rule number 2: limiting downside risk is fundamental. Remember the asymmetry between loss and return (If your portfolio loses 50% of its value, you need 100% performance to get back to where you were.). Preserving a significant secured bucket and looking for asymmetrical risk/reward are two ways to use this rule.

Next Allocation (end of July 2018 rebalancing)

Risk Bucket – 65%

Traditional Equities – Benchmarks only – 30%

US: 6%

Europe: 6%

Japan (FX Hedged): 3%

EM: 10%

China onshore: 5%

Macro Trends – 20%

Solar – 5%

Robots – 5%

China Tech – 5%

Illiquid EM – 5%

Alternatives – 15%

Real Estate – 3%

Commodities – 4%

Crypto: 8%

Defensive Bucket – 35%

Fixed Income – 30%

* US Gov (Nominal and Infla Adjusted): 10%

* Europe Gov (Nominal and Infla Adjusted): 10%

* EM Gov (Local currencies): 10%

Cash – 5%

* USD: 5%

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