Create the portfolio mix for all economic seasons

Instructions

  1. Put 30% in stocks.
    This may seem low, but remember that stocks are three times riskier than bonds.
  2. Invest in long-term government bonds.
    Invest 15% in intermediate-term (7-10 year Treasuries) and 40% in long-term bonds (20-25 year Treasuries). This is a large portion because it counters the volatility of the stocks and will bring a potential for higher returns in the future.
  3. Invest in gold and commodities.
    You need to have a piece of that portfolio that will do well with accelerated inflation. So, you’d want 7.5% in gold and 7.5% in commodities because there are environments where rapid inflation can hurt both stocks and bonds.
  4. Rebalance your portfolio.
    When one segment does well, you must sell a portion and return to the original allocation. This should be done at least annually. If done properly, it can actually increase your tax efficiency. Having a fiduciary implement and manage this for you would be most helpful.

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