What does your investment portfolio look like?

[beren]

The Digerati Life recently wrote a great piece about a simple way to allocate your investments. She suggests using all indexed funds. This has two benefits. First, you don't have to make any decisions. Second, indexed funds usually out perform the average of actively managed funds. This is a sample:

• 50% US Equities Indexed Funds (e.g. S&P 500)

• 20% Foreign Equities Indexed Funds (e.g. EAFE Index)

• 10% Real Estate (e.g. National Association of Real Estate Investment Trusts Equity Index)

• 5% Bonds (Lehman Aggregate Bond Index)

• 5% Commodities (Goldman Sachs Commodity Index)

What does your investment portfolio look like?

[Xin Lu]

right now I have a ton of cash in a Vanguard money market which I will use to buy a house in the next couple years. So my allocation is 30% cash, 5% bonds, 65% equities (maybe a little too much international equities).

[rstlne]

The last time I did a pie chart, my asset allocation was roughly the following:

30% domestic equity
30% foreign equity
20% precious metals
15% cash
5% fixed income

The equity portion is actually somewhat less than 60% because of short positions. Also, the even split between domestic and foreign stocks is due more to my indifference to a company's location than to any effort to seek a balance between the two. If the company is well-positioned to take advantage of macroeconomic trends, has good fundamentals, and is trading at a decent price, I'll invest in it, no matter whether it is in the US or outside. My stock picks are heavily weighted towards natural resources, mining, energy, basic materials, and infrastructure. I also tend to favor dividend-paying stocks and income/royalty trusts.

[LV Pike]

I use the upgrading portfolio from Sound Mind Investing. soundmindinvesting.com. The total return over the last 5 years is almost 200%.

22% - Foreign
23% - Small-Company Growth
13% - Small-Company Value
25% - Large-Company Growth
17% - Large-Company Value

[CheapCanuck]

I, too, invest in index funds. My current allocation is 20% Cdn equity, 20% International equity, 30% US equity, and 30% bonds. MER for these funds are all less than .50%

[mbhunter]

20% in this, 60% in something else, 15% here, 5% there.

If I told you what I was invested in, and it was totally different than what you all are invested in, and if I saw a lot of gains, and you saw a lot of losses, you'd be a tad envious, right? Why would I want that? Or if I turned out to be wrong, I'd look like a pompous dummy. Why would I want that either?

[rolltimer]

The short response is it looks a bit like a bad train wreck. Over the past 2 or 3 years, I have purchased some stocks in the financial sector--REITS, banks--which tanked last summer and continue to look dead in the water. Fortunately, most of these live (or are dying, depending upon your perspective) inside my 401K so I have a decade or more before I'll need to touch them. I also have some diversification in mutual funds--growth index, small cap index, mid cap managed and an index fund that tracks the Wilshire 5000. A good chunk of coin is holding its own in a money market fund. I was drawn to the financial sector by the healthy dividends, low PEs and apparent "good" management of resources. Now it appears these resources are evaporating in writedowns and losses. "Good" management is taking on a whole new flavor, a distasteful one at that.

[rstlne]

Originally Posted by rolltimer

I have purchased some stocks in the financial sector--REITS, banks--which tanked last summer and continue to look dead in the water.

I knew from experience that Financials and REITs are interest rate sensitive, so I sold most of my position in the two sectors in 2004 and 2005 when interest rates were on the rise. In retrospect, I was a bit too early but I'm glad now that I did sell.

Of course, it's important to pay attention to the macroeconomic situation and to be aware of economic cycles. Other than that, I don't think there is any sure way to know what will work and what won't ahead of time. Even Wall Street pros were caught by surprise by the severity of the credit contraction.