ITA Wealth Management

Mykonos Island, Greece

After spending time with Mark Hebner’s “Index Funds” book and rereading Gibson and Ferri, I am rethinking the asset allocation strategy for the AA-Mosaic Portfolio. Here is my current asset allocations for the major classes. In other words, I am not breaking the cap zones into growth, blend, and value at this point. Nor am I identifying the individual ETFs. That will come later.

• Large-Cap – 15%
• Mid-Cap – 15%
• Small-Cap – 20%
• International (developed countries) – 20%
• Emerging Markets – 15%
• REITs – 7%
• Commodities – 7%
• Cash – 1%

This is an aggressive asset allocation strategy and it is not for all investors. To move toward a more conservative portfolio, one would decrease emerging markets and small cap, while increasing large cap and possibly adding in some bonds. I may shift toward a little more conservative approach as it would likely suit a greater percentage of investors. This asset allocation strategy is still in the embryonic stages of my thinking.

Lowell Herr

Yangtze River, China

On 2/20/08, 100 shares of VB (Small-Cap Blend) were added to the AA-Mosaic Portfolio. The spreadsheet containing this information has not been posted to the bivio site. This will happen later. The move to add and ETF in this area is a move to increase the percentage allocated to the small-cap group of equities.

Photograph:  As I recall, the bridge in the photograph will be removed as the Yangtse rises.  When we were on the river, it had another 75 meters to rise due to the filling of the Three Gorges Dam.

Near Holyhead, Wales

The latest edition of the AA-Mosaic Portfolio is available on the Bivio Site. Here is the URL.

http://www.bivio.com/iclwc/files/MosaicPortfolio

Download the AA-Mosaic Portfolio.xls Excel spreadsheet. If you go to the Holdings worksheet you will see the stocks contained in the portfolio. The Dashboard worksheet shows where we are with our allocation goals. The Mosaic worksheet lays out all the transactions.

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