UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev | Next
Author: iamdb Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35400  
Subject: Asset Allocation Date: 2/14/2004 5:20 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 2
I was looking over Malkiel's "Random Walk . . ." again, and was struck as always by the concentration on age in driving allocation decisions, with no regard to assets vs needs. I have pondered this for some time, because I manage my 90 year old mother's finances. On the one hand, it can be argued that she has little time (maybe 15 years or so -- longevity runs in the family) to recover from a market loss, so she should be mostly in fixed income investments. On the other hand, her assets are far greater than her income needs, so she can afford to be more agressive, providing her income is secured.

I maintain a 15 year buffer in fixed income securities for her, 7 years of which are in cash equivalents. But that results in an asset allocation that is far more agressive than her age would suggest. As the beneficiary of her estate, such an agressive allocation could be argued to serve me rather than her. When I pass the estate on, it will go to various charities, e.g. open space preserves, schools, and so forth. I think I'm doing the right thing with her assets, but I feel a sense of conflict. I wish there were more discussion of assets vs need in allocation decisions.

db
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev | Next

Announcements

Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Macro Economics

Looking at Currency Ratios
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement