Investment

» Derelict - Please give me your take on my asset allocation

In response to YTD, June 2007 posted by retiredinprescot:

I have been listening to Moneytalk show for some time. Bob Brinker had discussions with Burton Malkiel and David Swenson that I thought were great and opened my eyes on how to better diversify to increase expected returns at a given level of risk. I decided after June 30th to re-evaluate my asset allocation.

I am thinking about setting my asset allocation for most of my portfolio with the following:

All are no load funds and low annual expense. I am looking to retire in about 20 years.

5% TIPS (inside 401(k))
15% GNMA fund (inside 401(k))
60% Total market index
15% Developed foreign market index (inside Roth IRA)
5% Emerging market index (Inside Roth IRA)

I have no credit card debt.

I have a fixed rate 5.5 mortgage and am in no hurry to pay off the mortgage with this rate. I figure this is my real estate investment that Swensen recommended as another asset class. It is overweighted compared to my other asset classes, but there is not much I can do about that since that is the price of trying to own a place where I live.

I have another small account inside a Roth IRA that I consider play/gamble money. I will try to play and beat the market with this money. It will be for more risky investments and I'll trade more actively here. This was what Burton Malkiel said he did and I liked that idea.

What do you think?

-- posted by Derelict