Asset allocation

[slownsteady]

Assuming you are a decent short term trader ,making money but nothing spectacular and you have another occupation and you are still young, and you don't want to put all your liquid net worth in your trading account , maybe 40% of it. ,What would be your asset allocation ? How much would you put in index funds, sector funds and managed futures for the long term?

 

[Anonymous]

Index funds = 10%
Sector funds = maybe
Managed futures = forget it, I'd rather do it myself.

 

[bullcar]

Hi S,
if you are a decent short term trader, give up your day job - simple as that!
regards
B

 

[ritcherd]

You're right to ask about asset allocation, investing based on individual fund choice is a dangerous game. Best performing funds in one year can be much further down the tables in following years. Whereas if you get your asset allocation right then you're on to a winner, if emerging markets are on the up then most emerging markets funds will no doubt be on the up. Whereas is North America is on a down turn then no matter how good your fund selecting skills, most or all North American funds will be on a downturn also. Using the mathematics of Modern Portfolio Theory aimed at maximising your returns over the long term in a relatively high risk portfolio I would suggest an asset allocation split of funds as follows:

UK Equity 16%
North America 21%
Europe excluding. UK 21%
Japan 13%
Pacific excluding. Japan 8%
Emerging Markets 8%
Global Specialist 13%

The sectors are different than what you were originally looking at, but hey, this is the way that I do things and i'm happy with it.

Richard Holbrook Companies