Post deleted by Mat Sklansky

[shark6]

How about:

10% Gold (glad to see it in your portfollio already)
5% Commodities (PIMCO Commodity RealReturn)

5% Money Market (some things just have to be for sure)
5% US Gov Bonds (better yield than MM)
5% Corp Bonds (better yield than Gov bonds)
5% Forigen Bonds (US dollar currency hedge)

20% Large Domestic Stocks ( Balanced between value and growth)
10% Medium Domestic Stocks (Balanced between value and growth)
20% Small Domestic Stocks (Balanced between value and growth)

5% Emerging Market Stocks (high risk/high reward)
5% Foreign Small Cap Stocks (high risk/high reward)
5% Foreign Large Cap Stocks (diversify out of US stocks)

You could also add:
1. A real estate fund (more diversity)
2. A natural resource fund (another inflation hedge besides gold and commodities)
3a. An arbitrage fund (risk free returns)
3b. A market neutral fund (risk free returns)
4. An all asset fund (letting a fund manager find his inner LAG and buy whatever he wants)
5. A microcap fund (high risk/high reward)

I think with this arrangement you'll have your money much more diversified while meeting your primary goal of balancing fairly safe with fairly aggressive.

Finally, rebalancing regularly will boost your returns, especially with this broad of portfollio.

[jws43yale]

I am currently a college student who runs an incorporated money management firm with 12 clients. We do not manage an extremely large amount of money, but I have a decent knowledge of the market. I would reccomend you find a good money manager. You could very easily leave 60%+ in the market with great security if you kept up with it. If your net worth begins to approach 1 million, you can find a large investment bank that will offer you a PCS (private client services) rep to personally manage your money. This is ideal as they are all great at what they do and know all the ins and outs.

I find that people don't realize why they should supposedly have safe investments as they age. In the long run, the stock market is not much more risky than bonds, but offers greater return. For example, the market crashes and you lose half the value of the portfolio. A good manager or investor will use this time to snap up even more chep stock and all the loss can be made back. The problem is that to see the profits in a situation like this could take 5-10+ years, and the older you get, you don't have the ability to wait for the rebound. Even if you plan on retiring early, you should only leave enough money in your "safe" investments to protect you from the short term hit. In the long term, when managed correctly, you can always end up a winner.

The whole way you will eventually live off of your investments is through the continual return. A 10% return is possible with safe stocks (most good managers should make considerably better than this) and will net the following return:

5 years: 1.61
10 years: 2.59
20 years: 6.72

Our portfolio is a little riskier than average, but by no means speculative, and we had a return of 16.2% last year.

It takes time, but if you are still playing poker and making money, this is the way to make whatever happens down the line easier. PM me if you would like to talk more.

[Sniper]

[ QUOTE ]
It means I am planning as if I will retire before 65, possibly much sooner. While I'll probably still be 'active' I want to setup my portfolio in such a way that I will have no financial worries whatsoever, at least at a subsistence level. This means that capital preservation is fairly important to me and outsized/risky returns are not what I am chasing.

[/ QUOTE ]

Even more reason to allow time compounding to work for you... unless you simply expect to make significant income each year and stash away a big chunk of it.

Pop the numbers into excel and run some whatifs at various return rates to see what I mean.

What is your savings goal for "ok to retire now"?