Investors Business Daily had a piece a couple of weeks ago (front page, at the bottom) challenging conventional wisdom re Asset Allocation. The writer's point was that as investors near retirement age, most folks recommend moving from growth stocks to bonds and dividend-yielding stocks to reduce risk. He then pointed out that what these investors really do is sacrifice yield. I'm about five years from retirement and have a ~$500,000 portfolio made up of Dell, MSFT, CSCO and WCOM. I had been planning to move into convertible preferreds and stocks like utilities and GE, until I read this piece and pondered on it for a while. Now, I think I will keep the stocks in the portfolio and just balance them out some (I'm way overinvested in Dell). If the portfolio continues to increase at 20+% vs. the max 7 ot 8% I could expect with the more conservative portfolio, then I am better off enough to compensate for the percieved increased risk. So much for conventional wisdom. Cheers.
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