Trek III: Wealth and Prosperity: Asset Accumulation: Long-Term Portfolio Recommendation

This step on your prosperity trek…
This is an informational step.

Here is Prosperity Concierge’s current asset allocation investment recommendation for your long-term portfolio.

Long-Term Investment Allocation

(for funds not needed for at least 5 years)

65% Emerging Markets (with a concentration in Brazil)

30% U.S. Large Cap (with a concentration in technology (hardware and software))

5% Energy and other Natural Resources

Asset Allocation Advice

Here is related advice from people whose opinion we greatly respect:

Ramin Toloui (PIMCO)

We believe that the fact that traditional patterns of indebtedness are being turned on their head will have dramatic consequences for asset allocation by global investors. Lower levels of debt give emerging markets the added degrees of freedom to continue financing economic growth. Greater economic dynamism will in turn lead to more attractive investment opportunities and an increasing flow of funds from industrialized country investors that have historically been domestically focused. Home bias will fade because institutional investors, particularly pension funds, will likely find it difficult to meet their return objectives without tapping into the range of investment options in the emerging world. (April, 2010)

Mohamed El-Erian (PIMCO)

• hold fewer U.S. shares and more foreign shares to profit from later growth abroad, such as China
• protect against rising inflation
• insure against disaster

Abby Joseph Cohen (Goldman Sachs)

• have a play on global recovery: technology, commodity and materials stocks

Richard Bernstein (Bernstein Capital Management)

• invest in U.S., not China, since a credit bubble is developing in China
• consider U.S. treasury bonds for diversification

Brian Rogers (T. Rowe Price)

• buy stocks of companies that are cyclical and will benefit from recovery (home improvement, oil companies and diversified manufacturing companies such as 3M

Bob Doll (BlackRock)

• have a diversified portfolio that includes some cyclicals (energy), defense (health care) and technology
• don’t load up on bonds or cash

Users of Prosperity Trek assume all responsibility for their investment portfolio.

Revision History

These are recent changes we’ve made to our recommended long-term portfolio

6/17/2010

• Decreased the energy/natural resources component from 10% to 5%. Will rely on emerging market concentration for exposure to energy and natural resources. Cumulative accumulation in energy across entire portfolio targeted for 14%.
• Increased U.S. large cap component from 25% to 30%.

4/2/2010

• Reduced the emerging market component from 70% to 65% (continuing to advise strong concentration in Brazil)
• Increased the energy/natural resources component from 5% to 10%

11/5/2009

• Removed 10% allocation to international small-cap. Has limited potential for benefit from currency fluctuations. Limited growth potential.
• Emerging-markets allocation changed from 65% to 70%. Also, removed recommendation for concentration in Asia.
• U.S. large-cap allocation changed from 20% to 25%.

Related Activities and Side Trips

• Asset Allocation and Diversification – Asset Classes
• Create an Asset Mix Using Diversification and Your Target Portfolio
• Emerging Market Debt
• Emerging Market Equities – BRICs and Other Considerations
• Emerging Markets in Your Portfolio
• Every Investor Should Have Investment Rules for Asset Allocation and Rebalancing
• International Investing
• Managing Risk – Diversification

Itinerary for the Wealth & Prosperity in Prosperity Quadrant III Trek

• Trek III: Building Wealth and Finding Fulfillment
• Wealth and Prosperity: Save From Income: Get the 401(k) Match
• Trek III: Get Disability Insurance
• Trek III: Get Free Credit Report
• Trek III: Evaluate Your Debt
• Wealth and Prosperity: Debt: Improve Your Credit Score
• Trek III: Reduce Credit Card Debt
• Trek III: Automate Your Banking
• Wealth and Prosperity: Save From Income: Fund a Roth IRA
• Trek III: Wealth and Prosperity: Debt: Debt Payoff Plan
• Trek III: Lower Your Credit Card Interest
• Trek III: Set Financial Goals
• Trek III: Reach Financial Goals
• Trek III: Your Investing Environment
• Trek III: Investing Fundamentals
• Trek III: Fixed Income Investing
• Trek III: Equity Investing
• Trek III: Money Market Investing
• Trek III: Evaluate Investment Advice
• Trek III: Invest Globally
• Trek III: Know Your Risk Tolerance
• Trek III: Risk and Your Portfolio
• Trek III: Know Your Time Horizon
• Trek III: Goal-Based Investing
• Trek III: Your Asset Allocation
• Trek III: Wealth and Prosperity: Asset Accumulation: Long-Term Portfolio Recommendation
• Trek III: Portfolio Rebalancing
• Trek III: Invest in Taxable Accounts
• Trek III: Invest in 401(k) Non-Match
• Wealth and Prosperity: Protect: Emergency Fund
• Trek III: College Savings
• Wealth and Prosperity: Protect: Plan Your Estate
• Wealth and Prosperity: Protect: Long-Term Care Insurance
• Trek III: Invest in Traditional IRA
• Trek III: Health Savings Account
• Trek III: Evaluate Career Trends
• Trek III: Improve Your Career
• Trek III: Wealth and Prosperity: Enjoyment: Retirement: Define Your Income Plan
• Trek III: Wealth and Prosperity: Enjoyment: Retirement: Social Security
• Trek III: Wealth and Prosperity: Enjoyment: Retirement: Pension and Other Income
• Trek III: Wealth and Prosperity: Enjoyment: Retirement: Funding from Personal Savings
• Trek III: Wealth and Prosperity: Enjoyment: Retirement: Delay Retirement?
• Trek III: Wealth and Prosperity: Enjoyment: Retirement: Income Stream
• Trek III: Wealth and Prosperity: Enjoyment: Retirement: Income Stream: Annuity
• Trek III: Wealth and Prosperity: Enjoyment: Retirement: Income Stream: Asset Allocation
• Trek III: Wealth and Prosperity: Enjoyment: Retirement: Income Stream: Withdrawal Plan
• Trek III: Wealth and Prosperity: Enjoyment: Cash for Financial Goals