Asset allocation model -
Watching my dad's investing success over the years, I concluded that asset allocation plays a big role. Here are the percentages I came up with for a conservative investor nearing retirement, taking into account that we're 10 years into a bull market -
50% - Bonds/Fixed Income
25% - Stocks
10% - Gold/Silver
10% - Cash
5% - Trading
These percentages don't include one's real estate holdings, collectibles, or any positions in commodities. The 25% in stocks would mostly be in large cap higher dividend type. Bonds would be divided into high quality corporates and munis. I included 5% for trading, for fun, but with strict position limits.
Overall this looks like a workable model, providing income and some prospects for modest growth over time. The 10% in gold/silver is disaster insurance.
