This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

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.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs