I’ve touched on the importance of investing early and often, but I haven’t given you a clue as to how I invest. It wasn’t until sometime last year that I wrote myself an Investor Policy Statement and came up with an asset allocation that felt appropriate. I made a few transactions to apply the allocation across my various accounts. This is the allocation I’ve decided upon:
– 50% US Stocks (with a tilt to small and value)– 20% International Stocks (50 / 50 developed and emerging markets)– 20% Alternatives (real estate and small business)– 10% Bond & Cash (mostly bond plus cash emergency fund)
No. The White Coat Investor has identified 150 other asset allocations that are “better than yours“, although I think mine is definitely better than some of them.
How did the portfolio perform in 2019?
Our portfolio returned just over 24% in 2019. I’ll gladly take that any year. The Rule of 72 tells me that my investments would double in just three years with steady returns of 24% (not that I have any expectation of that happening).
Compound interest is akin to the feeling you get when you step off the treadmill after a good run. Your legs continue to propel you across the gym without conscious effort. You can’t help but move forward. Here’s how our returns look in graphical form.