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Subject:  Re: Asset allocation Date:  2/26/2012  1:32 PM
Author:  joelxwil Number:  70216 of 88530

That is actually a very tricky question, since there is some risk involved in renting property. Your tenant may not pay, and/or may cause significant damage to the property. In addition, the older you get the more likely it is that if work needs to be done on the property you will have to pay somebody else to do it.

So I do not know of any general way to answer that question.

So far as asset allocation is concerned, I do not believe in holding some fixed % mix of assets. Time the stock market, so that you are out of it in the bad times and in it during the good times. Watch the interest rates to know when to be in bonds or not.

There was this guy at Citibank who had a desk in the lobby of a local branch with a sign that said he could give financial advice. At a time when the Fed was raising interest rates, he put his clients into long term bonds. Obviously, they lost money, and he said he felt really bad about it. If they held those bonds to maturity, they missed some really nice gains in the stock market the next year, and if they sold they lost money.
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