Trek III: Wealth and Prosperity: Asset Accumulation: Long-Term Portfolio Recommendation

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The trek for families with positive cash flow and positive net worth. The trek focuses on saving, accumulating assets and building net worth, protecting cash flow and assets, enjoying prosperity and giving back to others.

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This is activity 30 of 52 in the Wealth & Prosperity in Prosperity Quadrant III trek.

This step on your prosperity trek…
This is an informational step.

Here is Prosperity Concierge’s current asset allocation investment recommendation for your long-term portfolio.

Long-Term Investment Allocation

(for funds not needed for at least 5 years)

65% Emerging Markets (with a concentration in Brazil)

30% U.S. Large Cap (with a concentration in technology (hardware and software))

5% Energy and other Natural Resources

Asset Allocation Advice

Here is related advice from people whose opinion we greatly respect:

Ramin Toloui (PIMCO)

We believe that the fact that traditional patterns of indebtedness are being turned on their head will have dramatic consequences for asset allocation by global investors. Lower levels of debt give emerging markets the added degrees of freedom to continue financing economic growth. Greater economic dynamism will in turn lead to more attractive investment opportunities and an increasing flow of funds from industrialized country investors that have historically been domestically focused. Home bias will fade because institutional investors, particularly pension funds, will likely find it difficult to meet their return objectives without tapping into the range of investment options in the emerging world. (April, 2010)

Mohamed El-Erian (PIMCO)

hold fewer U.S. shares and more foreign shares to profit from later growth abroad, such as China
protect against rising inflation
insure against disaster

Abby Joseph Cohen (Goldman Sachs)

have a play on global recovery: technology, commodity and materials stocks

Richard Bernstein (Bernstein Capital Management)

invest in U.S., not China, since a credit bubble is developing in China
consider U.S. treasury bonds for diversification

Brian Rogers (T. Rowe Price)

buy stocks of companies that are cyclical and will benefit from recovery (home improvement, oil companies and diversified manufacturing companies such as 3M

Bob Doll (BlackRock)

have a diversified portfolio that includes some cyclicals (energy), defense (health care) and technology
don’t load up on bonds or cash

Users of Prosperity Trek assume all responsibility for their investment portfolio.

Revision History

These are recent changes we’ve made to our recommended long-term portfolio

6/17/2010

Decreased the energy/natural resources component from 10% to 5%. Will rely on emerging market concentration for exposure to energy and natural resources. Cumulative accumulation in energy across entire portfolio targeted for 14%.
Increased U.S. large cap component from 25% to 30%.

4/2/2010

Reduced the emerging market component from 70% to 65% (continuing to advise strong concentration in Brazil)
Increased the energy/natural resources component from 5% to 10%

11/5/2009

Removed 10% allocation to international small-cap. Has limited potential for benefit from currency fluctuations. Limited growth potential.
Emerging-markets allocation changed from 65% to 70%. Also, removed recommendation for concentration in Asia.
U.S. large-cap allocation changed from 20% to 25%.

Related Trek Side Trips

Trek Itinerary

Wealth & Prosperity in Prosperity Quadrant III

Prosperity Trek Guide by Prosperity Concierge

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