With a number of asset classes below target, since dollars are on the sideline in cash, now is the time to rework the Strategic Asset Allocation plan of the Madison Portfolio. The following Dashboard is a move to emulate the "Swensen Six" portfolio without adding individual stocks.
A reader of ITA suggested adding three dividend stocks (T, JNJ, & PG) to see how it might enhance the "Swensen Six" portfolio. I made those additions, changed the allocation between TLT and TIP, and added international real estate (RWX) and commodities (DBC) to the portfolio. These changes enhanced the projections for the "Swensen Six" in all the major metrics.
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Spend a little quality time talking with friends, family, or colleagues and one senses a dejected mood in the country. Funk is to shrink from, cower, to fear, and to frighten. That is the current mood of America. We look to our "leaders" and we come away with a "can't do" mentality rather than the "can do" attitude of the 1950s. For example, with interest rates at lows not seen for decades, why is the country not borrowing money to rework the entire infrastructure? Who is to say we cannot afford to repair all the decaying bridges? Yesterday I heard one person say – "America is one big pot hole." While this is hyperbole, I drive over one bridge each weekend that is ready to fall into the Willamette River.
As investors, what measures do we take as we wait for Europe to correct the direction of their financial ship? Rather than spiral down the staircase of despair, we can take action as our hands are not completely tied. Here are a few suggestions.