Portfolio Allocation | The Asset Man

Portfolio Allocation

Investors have a wide range of investment options available to them, from stocks and bonds to alternative assets like wine, cryptocurrency, real estate, whisky, art, crowdinvesting, crowdlending, and watches. Diversification is an important aspect of any investment portfolio, and including a variety of asset classes can help reduce risk and potentially improve returns.

Historical Returns of Asset Classes

Here are the historical returns of some of the asset classes that investors may consider including in their portfolio:

  •  U.S. Large Cap Stocks: 10.2%
  •  U.S. Small Cap Stocks: 12.4%
  •  International Developed Stocks: 6.3%
  •  Emerging Market Stocks: 9.9%
  •  Bonds: 5.3%
  •  Real Estate Investment Trusts (REITs): 9.5%
  •  Commodities: 2.0%
  •  Wine: 9.2%
  •  Cryptocurrency: 207.1%
  •  Whisky: 13.7%
  •  Art: 5.6%
  •  Crowdinvesting: 17.3%
  •  Crowdlending: 7.5%
  •  Watches: 5.8%

Ideal Portfolio Allocation

Investors seeking to build a diversified investment portfolio may want to consider allocating their investments across a variety of asset classes, including stocks, bonds, real estate, commodities, wine, cryptocurrency, whisky, art, crowdinvesting, crowdlending, and watches.

Each asset class has different risk and return characteristics, and by investing in a variety of assets, investors can potentially reduce their overall portfolio risk while seeking higher returns.

Based on historical returns, here is an example of an ideal portfolio allocation:

  •  25% U.S. large cap stocks
  •  15% U.S. small cap stocks
  •  10% international developed stocks
  •  10% emerging market stocks
  •  10% bonds (5% U.S. bonds and 5% international bonds)
  •  10% real estate investment trusts (REITs)
  •  5% commodities
  •  5% wine
  •  5% cryptocurrency
  •  2.5% whisky
  •  1.5% art
  •  1.5% crowdinvesting
  •  1% crowdlending
  •  1% watches

This allocation is just an example and may not be suitable for all investors. It's important for investors to do their own research and consult with a financial advisor before making investment decisions. Additionally, investors should periodically review and rebalance their portfolio to ensure that it continues to align with their goals and risk tolerance.

Sources

The asset class returns used in this example are based on historical data and do not guarantee future returns. The sources used to calculate the returns for each asset class are:

  •  U.S. Large Cap Stocks: S&P 500 Total Return Index
  •  U.S. Small Cap Stocks: Russell 2000 Total Return Index
  •  International Developed Stocks: MSCI EAFE Total Return Index
  •  Emerging Market Stocks: MSCI Emerging Markets Total Return Index
  •  U.S. Bonds: Bloomberg Barclays U.S. Aggregate Bond Index
  •  International Bonds: Bloomberg Barclays Global Aggregate Bond Index ex-USD
  •  Real Estate Investment Trusts (REITs): FTSE NAREIT All Equity REITs Total Return Index
  •  Commodities: Bloomberg Commodity Total Return Index
  •  Wine: Liv-ex Fine Wine 1000 Index
  •  Cryptocurrency: Coinbase Index
  •  Whisky: Rare Whisky 101 Apex 1000 Index
  •  Art: Mei Moses World All Art Index
  •  Crowdinvesting: Industry average return for crowdfunding investments
  •  Crowdlending: Industry average return for peer-to-peer lending investments
  •  Watches: Industry average return for luxury watch investments

 Investors should always do their own research and consult with a financial advisor before making investment decisions.