Live from New York, Etc.

Changes in My Personal Portfolio

Whither Inflation?

There’s No Free Lunch

Some Interesting Data on Viruses

Thanksgiving and More Travel

I am writing in the middle of a whirlwind week in New York. We are going to discuss what I’m learning, some takeaways from the conversations I’ve had, changes in my personal portfolio, and thoughts around the topic of the day: inflation. As well as a few random things that I have read this week. All delivered to you within my 3,000-word limit. Let’s jump in…

Changes in My Personal Portfolio

Recently I’ve mentioned some changes in my own investments. This generated questions from readers who want to know more. So now is a good time to elaborate.

Years ago, my partner in our money management business, Steve Blumenthal of CMG, and I developed what we called the 80/20 portfolio. Conceptually, that means 80% of your portfolio goes into core positions intended to grow to 100% of the original portfolio in five years. These are typically nonaggressive cash flow and similar products yielding somewhere in the 5% neighborhood.

We then position the other 20% to “explore” stocks and assets able to grow at a much faster pace, albeit with more risk. Think technology, certain real estate positions, etc. You spread your risk over multiple such positions, taking a longer-term view but watching them closely.

The 80/20 split is a guideline, not a hard and fast rule. The older and less risk tolerant you are, the more you allocate to core positions. Younger investors with good income might think more along 70/30 lines—realizing that your business and/or job is a key risk as well.