2million - My Journey to Financial Freedom

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Tuesday, September 19, 2006

Asset Allocation

Back in early 2006 when I reviewed the returns from my net worth in 2005 I realized I needed to spend some time looking at my asset allocation.

Here is what my asset allocation looked like in March:


I took a look at my total asset allocation in March, but dropped the ball and didn't dig any further. Unfortuntely, my asset allocation has already changed enough that I should start over.



Here is how my Total Asset Allocation looks now:


3 big changes since March:
1) I bought a second property.
2) I vested in my cash balance pension plan, thereby adding bonds (or really bond equivalent investment to the mix). My pension plan earns a yield equivalent to 1 yr treasuries + 1%.
3) I have burned through a sizable amount cash this year.

I actually think my asset allocation is better off today compared to March. I thought I wasn't exposed enough to real estate and given this is total assets (in the case of real estate ignoring the offsetting liabilities) then I think it make sense to have at least 1/2 your total assets in real estate assuming you have corresponding liabilities.

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