January 11, 2007

Asset Allocation Ideas

Posted in Uncategorized at 4:38 am by John Roney

Anthony Robbins once talked about a principle called three-bucket asset allocation, something that he learned from Sir John Templeton. With this strategy, you would take a certain percentage of your income and set it aside for savings/investing. Let’s say 10% to keep things simple. Then with that 10% that you are saving, you would allocate a certain percentage of that savings to higher risk, higher return investments and a certain percentage to more secure investments.

For example, let’s say that you are saving 10% of your income and you decide to put 50% of that into secure investments and 50% into higher risk investments. If you were making $5,000 a month, you would save $500 and then put $250 in a safer investment like an S&P Index fund and the other $250 you might put into real estate or into a trading account.

The percentages you allocate are flexible. You might put 30% into risk, 70% into long-term secure. Generally, the younger you are, the more you can afford to put into the growth investments because if you make a mistake or an investment goes sour, you have more time to recover from the loss. In the next post, I will talk about what you do with the profits you make from your growth investments.


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