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Author: telegraph Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 78685  
Subject: Re: New passive investor looking 4 strategy crit Date: 2/5/2004 10:00 AM
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"I do not hold separate funds for each of these asset classes. I've just made estimates from allocation data on morningstar.com for the funds I have, to determine how much of each of the funds I hold, I need to get to this allocation.
25% Domestic Large
30% Domestic Small
5% Bonds/Money market
10% Foreign Large
20% Foreign Small
10% Emerging Markets "

LOoks like a good allocation for stock.

I would suggest the following reading

Bernstein, Wm The Four Pillars of Investing. The BEST book in my opinion on modern portfolio theory. Excellent....and very well thought of. You can buy second hand for 20 bucks or less at


click on 'used books' and do search. New is like $40. There is only one edition out , and pub date is after the crash of 2000, so it includes the dot.com meltdown. Superb! Mandatory reading!

After you read it, you will have good idea of risk/reward.

Also, another excellent book is by Roger Gibson, Asset Allocation, latest edition in 2003. ALso available second hand for $20. New is 40-50 bucks. Be sure to get latest edition.

Or check them out of your library if they have, or ask them to get them.

My feeling is that at age 24, you can be aggressive, but with only 5% in bonds, you are pushing things a little too much to the equity side. I would consider going over time to 80% equities, 20% bonds, and doing it through an index fund, and holding the bonds in the 401K.

After you read the above two books, you will see why.



also highly recommended: Malkiel, A Random Walk Down Wall Street (pub date after 2000) - lots of earlier editions out there

Stanley - The Millionaire Next Door.

www.efficientfrontier.com good for up to date investing thoughts.

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