Comments on: All about asset allocation http://www.iwillteachyoutoberich.com/blog/all-about-asset-allocation/ Personal finance blog for college students, recent graduates and everyone else -- including entrepreneurship -- for getting rich. Featured in the Wall Street Journal and New York Times. Sun, 21 Mar 2010 11:47:10 -0700 http://wordpress.org/?v=abc hourly 1 By: JC http://www.iwillteachyoutoberich.com/blog/all-about-asset-allocation/comment-page-1/#comment-68497 JC Sat, 02 Aug 2008 15:10:41 +0000 http://www.iwillteachyoutoberich.com/blog/all-about-asset-allocation#comment-68497 I would recommend trying to sell someone something fraudulent BEFORE you scream at them, as they otherwise might be put-off by the screaming and less likely to buy. I would recommend trying to sell someone something fraudulent BEFORE you scream at them, as they otherwise might be put-off by the screaming and less likely to buy.

]]> By: KJH http://www.iwillteachyoutoberich.com/blog/all-about-asset-allocation/comment-page-1/#comment-31290 KJH Tue, 04 Sep 2007 04:23:01 +0000 http://www.iwillteachyoutoberich.com/blog/all-about-asset-allocation#comment-31290 Ramit (or anyone) - how would you calculate the % that a real estate investment takes up in your portfolio if it wasn't a straight up purchase, like a stock or bond (usually) is. So for example, let's say I bought a condo somewhere and was renting it out. I made a downpayment of $10k and am now paying $1500 every month in mortgage, taxes and fees, and I'm bringing in $1600 in rent (totally made up #s, btw). Would you use the $10k figure to calculate the % that this RE investment takes up in your portfolio or some more complicated figure that takes the estimated value into account? Thx! Ramit (or anyone) – how would you calculate the % that a real estate investment takes up in your portfolio if it wasn’t a straight up purchase, like a stock or bond (usually) is.

So for example, let’s say I bought a condo somewhere and was renting it out. I made a downpayment of $10k and am now paying $1500 every month in mortgage, taxes and fees, and I’m bringing in $1600 in rent (totally made up #s, btw).

Would you use the $10k figure to calculate the % that this RE investment takes up in your portfolio or some more complicated figure that takes the estimated value into account?

Thx!

]]> By: Walter Truitt http://www.iwillteachyoutoberich.com/blog/all-about-asset-allocation/comment-page-1/#comment-85 Walter Truitt Thu, 25 Aug 2005 23:22:30 +0000 http://www.iwillteachyoutoberich.com/blog/all-about-asset-allocation#comment-85 Using margin to invest 20% in bonds would be unwise. You would be paying 7% to your broker to earn 4% in the bond fund. I typically prefer to have a little in bonds, but overall the stocks will perform much better. I use 10% in fixed return, and include any of my non-retirement emergency funds in that number. Using margin to invest 20% in bonds would be
unwise. You would be paying 7% to your broker
to earn 4% in the bond fund.

I typically prefer to have a little in bonds,
but overall the stocks will perform much better.
I use 10% in fixed return, and include any of
my non-retirement emergency funds in that number.

]]> By: Ramit Sethi http://www.iwillteachyoutoberich.com/blog/all-about-asset-allocation/comment-page-1/#comment-84 Ramit Sethi Tue, 12 Jul 2005 03:32:41 +0000 http://www.iwillteachyoutoberich.com/blog/all-about-asset-allocation#comment-84 I agree that a well-diversified portfolio will get you the best returns over time. But stock indexes just crush bond-market returns (again, over a long period of time). So while bonds do protect your downside--and help you when the market goes down--that bond money could be used for something better right now. I'm really interested in what you said about investing 20% in bonds reduces the variances of investments by half. Is there a place to read more about that? I agree that a well-diversified portfolio will get you the best returns over time. But stock indexes just crush bond-market returns (again, over a long period of time). So while bonds do protect your downside–and help you when the market goes down–that bond money could be used for something better right now.

I’m really interested in what you said about investing 20% in bonds reduces the variances of investments by half. Is there a place to read more about that?

]]> By: Steven Riley http://www.iwillteachyoutoberich.com/blog/all-about-asset-allocation/comment-page-1/#comment-83 Steven Riley Tue, 12 Jul 2005 02:38:52 +0000 http://www.iwillteachyoutoberich.com/blog/all-about-asset-allocation#comment-83 I must disagree with you about it being better to put all of your money in stocks when you're young. The problem with that is most (75%) of stocks move with the market, which means that you're exposing yourself to much unneeded risk. The best reason to buy some bonds is that they tend to move in the opposite direction of stocks. That way, if you put about 20% in bonds, you reduce the variance of your investment by about half. In fact, you'll get the same return with much lower risk if you put 90% of your money in stocks and the rest plus another 20% in bonds on margin. I must disagree with you about it being better to put all of your money in stocks when you’re young. The problem with that is most (75%) of stocks move with the market, which means that you’re exposing yourself to much unneeded risk. The best reason to buy some bonds is that they tend to move in the opposite direction of stocks. That way, if you put about 20% in bonds, you reduce the variance of your investment by about half. In fact, you’ll get the same return with much lower risk if you put 90% of your money in stocks and the rest plus another 20% in bonds on margin.

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