what is your asset allocation?

[Ash Housewares]

With the age of easy credit coming to a close and many on this blog predicting a recession, I was wondering what you all are doing with your assets. No actual dollar amounts need be posted, just an approximate percentage breakdown by cash, stocks, bonds, etc and a brief statement as to why.

The memebers of seem blog seem like an unusually bright lot and I’m interested to see the variation in responses. Personally, I’m like a deer in headlights right now. I see all the logic pointing to a recession and how stocks are going to be hit(articles like this aren’t any comfort- http://money.cnn.com/magazines/fortune/fortune_archive/2007/09/17/100250262/index.htm?cnn=yes), but on the other hand, research shows that over the long haul stocks achieve the highest return and timing the market is a fools game.

[an]

Without going too much in the specific, I think the world economy is going to be OK for the long term. So I buy mutual funds specialized in China, Asia, Latin America and emerging market. I do own some stocks with my play money in oil refiner and tech for now. Those stocks are very short term and a small amount. Obviously, there’s a decent % in cash/online saving account making a decent 5.3% as well.

[Fearful]

100% fixed income. About 1/4 munis, rest in CDs.

[(former)FormerSanDiegan]

45% Stocks (including around 7% in Asian, 5% Euro-zone), 35% short-term bond/cash equivalents, 10% commercial REITS, 10% commodities/short-term trades(e.g. short ETFs, gold ETFs)

[bubba99]

Most in fixed income – Euro bonds like Toyota at 4%. FNME at a variable – now 5%, and the new foreign exchange traded funds like FXE and FXF.

The FXE and FXF are directly tied to the dollar exchange rates. As the dollar declines, the funds increase. Right now the dollar has dropped to .73 euro/dollar – a bad time to get in. Wait for the next dollar rise.

[Coronita]

75% stock ( consisting of 70% index unequally weighted between between international, small cap, mid cap, large large cap) AND 30% individual stocks in various areas tech, consumer staples, speciaity end retail,energy: considered speculative investment/gambling)

15% energy and precious metals

5% bonds, reits(taking a beating)

5% cash in FDIC ensured stuff.

 

Also doesn't count savings held in overseas (no visibility as my wife manages that portion).

Also have a mortgage of $600k.

Wife and me in early 30ies, we feel we can weather a downturn should the equities turn sour. We figured if the economy turns sour and our stock portion gets trimmed 50%, and one of us becomes unemployed and household income drops to 40% of what we currently bring home, we'd still be able to pay of the mortgage outright and live off the remainder saving/investment/cash/salary. And if the economy gets completely decimated, well we can't be worse off than everyone else 🙂

 

 

[calysmeow]

This may be a subject for a separate forum topic, but what do you financially savvy folks do with your profits to avoid the taxes? I have some stock options from my employer that I am seriously considering cashing in (as the possibility of the stock market receeding are so high), but hate the thought of the huge tax chunk I will have to pay in a year where I don’t have many other write offs (sold house in March in another state, decided to rent for a year in San Diego to watch what the housing market does). Any suggestions?

[stockstradr]

OK, I’ll play.

I woke this morning asking myself: “Am I certain a recession is imminent, which will pull stock markets down 20% or even 30% in the next year?”

My answer: “Yes, I’m certain.”

So this morning I went from all cash to nearly all in, buying SDS the 2X S&P 500 inverse fund.

So

95% aggressively bearish in SDS, the 2X S&P 500 inverse fund.

The markets may climb up 5% in the next week or fall, but I’ll keep that money bet on the down side of this market for the next six months at least.

This is an insanely risky portfolio allocation. In my defense, I made assumptions and previously guessed the market would correct last July, and it did drop 10%, and the markets have gone incredibly unstable. I made money then and it reinforced my confidence my overall market analysis and predictions are correct. Roubini was on the right track; however, he was early 6 to 12 months on his predictions. The recession is just starting now. (Roubini had predicted the recession starting in 1st Qtr 2007.)

In the last several weeks I had gone to cash (from aggressively bearish positions) just on nervousness about the markets. Today I concluded that keeping that money out of this market will only lead to me missing (making money on) the 20% correction coming for western stock markets.

[New_Renter]

46% Fixed Income (Treasuries, GNMA, Muni’s, Intl. Bonds, Preferred Stock)
15% Large Cap Domestic Stocks
8% Small Cap Domestic Stocks
13% International Stocks
8% Precious Metals (incl. Mining Stocks)
7% REITS (Commercial, International)
3% Cash

[LookoutBelow]

No debt (none)
All CASH

CD's pay 5.09% minimal to NO risk (short term) 

Day trade most positions both sides and never more than 5% of cash for small gains. Never any open positions long or short over weekends, market is EXTREMELY volatile right now, which makes it infinitely easier to quick trade but the money sleeps in my account every night

Boring stuff, a little dinero made every week, but could make more as a night mgr for a 7-11 store in Clairemont….but then I'd have to work for "the man" ….that aint gonna happen….plus it would eat into afternoon surf sessions.

Might be able to weather this coming shitstorm…..depending on how bad it REALLY gets, maybe not. Even a few million dollars in fiat currency might become firewood if currency collapses…Think Weimar, a possibility?…Maybe….. gold is too hard to own and its too expensive in my opinion

Guns, cash, butter…..Am I Worried ? you bet your ass 

[bsrsharma]

Any thoughts on the very unfashionable investment – real estate – as in buying a home in a nice area (for investment) that was not bitten by the bubble (like the one Dave found in Denver suburbs) as an inflation hedge? If $ drops by 50% over next 10 years (very highly probable), how do you shelter your wealth?

[stockstradr]

I gotta make this comment. Why are there so many on piggington.com saavy enough to see the crash in real estate prices, yet they don’t see how stock markets will obviously be negatively affected by the real estate bubble imploding? I don’t understand why so many on here are holding long positions in stock markets.

[(former)FormerSanDiegan]

I gotta make this comment. Why are there so many on piggington.com saavy enough to see the crash in real estate prices, yet they don’t see how stock markets will obviously be negatively affected by the real estate bubble imploding? I don’t understand why so many on here are holding long positions in stock markets.

Some of us have used balanced portfolios for 10-20-30 years and expect occasional periods of -20% in our stocks. Some of us have been through several trying economic times and know that we don’t know everything and simply balance our bets based on long-term trends.
Some of us remember the recessions in the 70’s, stagflation, the double-dip recession of the early 1980’s, the crash of ’87 the dot-com bust of the 90’s, and countless other interruptions. Yet, still we have managed to build up a decent nest egg despite all these problems thanks to our friend named diversification.

Some of us don;t expect a 1930’s style depression.
Some of us believe that we cannot predict the future with 100% certainty and want to hedge our bets. Some of us have no problem holding negative bets against housing and positive bets on certain business sectors in the economy and negative bets on others.

And then there are those of us who are just too lazy or busy to adjust our portfolios (me) … and by being lazy often come out ahead of those who trade more often.

[DCRogers]

I have a 2/3 stock, 1/3 bond mix, with 2/3 of stock in US and 1/3 international. (Also a small side account I use for my “personal picks”.) All other purchases in low-overhead index funds.

I’m amazed that, given the obvious smarts of people on this web site, that so many are market timers (“I can beat the market”) and so many are undiversified (diversification is the easiest (and nearly cost-free) way to lower your risk/expected return ratio).

The classic book in the field is Malkiel’s “A Random Walk Down Wall Street“. If you’re making critical financial decisions for your own life, you should take the time to read about passive investing, whatever your final decision is. Otherwise, you’re as foolish as people signing mortgage documents (the other big financial decision people make) without reading the contract.

[an]

“I gotta make this comment. Why are there so many on piggington.com saavy enough to see the crash in real estate prices, yet they don’t see how stock markets will obviously be negatively affected by the real estate bubble imploding? I don’t understand why so many on here are holding long positions in stock markets.”

You should ask one of the biggest publicized bear out there, Peter Schiff, who predicted a lot of this. He’s very bullish on international market.

[Author]

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