billb

Some Core Themes for Portfolio Planning

Great article, thank you for taking the time to post it. I followed some of your other articles as well and managed to wonder where 2 hours of my day just went :)

A question, in researching portfolio planning and asset allocation/rebalancing... I have an idea that I'd like to test but I'm not sure how to go about it. It seems that while bonds play a factor in stabilizing a portfolio, it also seems that non-correlated assets play a bigger role in improving returns and stabilizing. My question/idea is, what if instead of using bonds, one found very risky asset classes that were hopefully not too correlated. This seems to go way against conventional wisdom. I'm also talking about a long time line as well, not a "5 years til retirement" scenario.

Any idea how one would go about testing this? My idea might be a junk bonds, commodity, currency, U.S. small cap and emerging markets portfolio, for example.