portfoilo

[General Cole]

I'm new here, looking for advice. What do you think about my portfolio?

10% International stock index
20% individual stocks
40% Gold
30% Federal Tax free bonds

[DemonD]

Re: portfoilo

General, you will likely get a wide range of response. Depending on how old you are, that may be too aggressive, or it may be too conservative. 40% gold is a huge, huge amount. I would say that holding 40% in PM's might be a good hedging strategy in this environment, but you would be wise to diversify to things like silver, copper, platinum, titanium, and there have been mentions of even more esoteric materials like uranium.

If you are past retirement age, then you should probably have more liquid type assets. The general strategy stated by John Bogle, founder of Vanguard, is to have the percentage of fixed income investments be your age. For example, if you are 60, then you should have 60% of your investments in fixed-income vehicles like the vanguard total bond market index fund.

IMO, anything over 25% in PM's is too much. Now, if a lot of your gold is in gold-based companies, then I would think differently.

If you want to maintain a significant position in PM's at 25%, i'd take the excess 15% and put it in international index (my personal favorite is VTRIX - I will admit I have no position in it, but I do hold vanguard index funds in high esteem and do own other vanguard funds). If you are old enough to be collecting social security, i'd take that 15% and put it either into your bonds or in a cash savings account.

[jk]

Re: portfoilo

one thing to keep in mind is your exposure to the u.s. dollar. right now you are 50% out of the dollar via your international stocks and gold positions. disclosure: personally i'm 63% out of the dollar, and planning to move further out of the dollar if the dollar index rallies to around 86. if you shift to a different allocation, pay attention to what might happen if the dollar deteriorates. similarly, stress test your portfolio by asking yourself how it might perform under conditions of inflation with growth, stagflation, recesssion, and so on.