Are you looking for a portfolio that pulls down the projected standard deviation? If so, take a look at the asset allocation mix shown in the following analysis. I would classify this portfolio as conservative.
Launched in the middle of the last great recession, the Bohr Portfolio manages to perform quite well due to one of the greatest bull markets during the first term of any president in recent memory. The 10% annualized gain combines both a major market drop for the first seven months of existence followed by a 90% gain in the broad U.S. Equities market since early spring of 2009. The Bohr was carried by this great market. Caution is the watch word as markets don’t grow to the sky.
As a review, here are the fundamental principles of investing.
- Follow The Golden Rule of Investing by saving more than you think you will need.
- Develop an investment plan and follow it.
- Build the portfolio around index funds or index ETFs. I prefer low-cost ETFs. Eschew individual stock selection as it is a losers game for all but a few.
- Diversify all over the globe. Think outside the U.S. markets and include emerging markets.
- Read a few of the Top Ten Investment Books found on this blog. Be sure to include one or two of William J. Bernstein’s books.
- Understand the role of asset allocation. While important, it is not “all important.”
- Set up a rebalancing program.
- To manage and monitor your portfolio, seriously consider learning how to use the TLH Spreadsheet.