Jan 03 2009
Portfolio IFA #50
Investors interested in looking at the best investment web site available, check out Mark Hebner’s IFA resource center. Yesterday I took the Risk Capacity Survey and found myself coming in lower than my results of a year ago. This time I locked in on portfolio #45. That seemed a tad conservative, so I decided to run a Quantext Portfolio Planner analysis on the No. 50 portfolio. Click on this link to see a short “movie” of the projected annual return, risk percentage, and portfolio diversification.
As I point out in the “film,” Dimensional Fund Advisors (DFA) recommend index funds that skew a portfolio toward smaller cap stocks and value oriented stocks. Portfolio #50 also includes 40% in fixed income vehicles. This will lower the return, but as you see in the movie, it also lowers risk. Too many investors concentrate on return while downplaying risk. We prefer to examine the ratio between return and risk, and the IFA #50 portfolio has a fine ratio considering the volatile market we are in.
Look for future analysis on other portfolios, such as # 75 and #100 to be presented next week on the Premium side of the blog.
Lowell Herr
Photograph: Expecting a better market.
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