What Your Retirement Portfolio Needs Now
Evolution in the global capital markets and in investment vehicles is changing how investors must construct their portfolios to get the greatest return for a successful retirement.
You need to examine the allocation of your retirement portfolio now, if you haven't already. Ensuring that you get the best return takes some rearranging from time to time, and you'll want to take advantage of investment products that are available now that can help maximize your efforts.
This past weekend, Barron's reiterated this thesis with a suggested portfolio put forth by Mohamed El-Erian from Pimco. Let's use this portfolio as a starting point for our discussion now on how to get the most return on your retirement portfolio. In case you missed it, here is what El-Erian suggested for allocations:
- domestic equities: 15%
- foreign developed equities: 15%
- emerging-market equities: 12%
- private equity
- domestic bonds: 5%
- foreign bonds: 9%
- real estate: 6%
- commodities: 11%
- inflation protected bonds: 5%
- infrastructure: 5%
- special opportunities: 8%
One quick note: The percentages given in Barron's add up to only 98%. Obviously, anyone actually taking El-Erian's suggestions could allocate the 2% elsewhere, or hold it in cash or, keeping consistent with the diversification, foreign currency.With El-Erian's suggestions, only about one-third would be in domestic equities, which would require a big shift in thinking for the typical U.S. based investor. What you may want to do here is simply capture the equities exposure and go along for the ride. El-Erian obviously believes foreign and emerging equities will continue to outperform the domestic market. If he is correct, then just having the foreign exposure will add value for a U.S.-based investor. This line of thinking clearly makes sense as the U.S. stock market has endured an eight-year round trip to nowhere with no turnaround in sight.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV