Why get hung up on the percentages? Isn’t that bike shedding? The principle is what matters. Take the wealth you can’t afford to lose, and put it in a balanced portfolio that seeks to match the performance of the market so that you don’t fall behind your peers.
So look at your peers (your socioeconomic class) and match the average portfolio.
For a tech wagie, a 60/40 for the older folks or 80/20 for the younger folks with 10% in cash will work.
For an UHNWI, look at the Tiger 21 asset allocation and follow that. (In 2023 it’s roughly 30% PE, usually your own businesses, 20% public stocks, 20% RE, 10% bonds, 10% cash and 10% alternative assets).
Overthinking here is ignoring rule #1 and possibly rule #3.
The point is simply to keep up with your peers’ returns on their wealth that they also can’t afford to lose (NOT talking about their career wealth here), within a small margin, and this should not be
> So look at your peers (your socioeconomic class) and match the average portfolio.
> The point is simply to keep up with your peers’ returns on their wealth that they also can’t afford to lose
Wait... Why the heck would I give care about what my "peers" (whatever that is) are making as returns? I don't care about keeping up with the Jones.
Does copying my peer's average portfolio somehow protect mine? As in: is that some game theory thing where because they all do that, what they own keeps some value and hence I should copy that?
Because at the end of the day, for humans (and any lifeform competing, in the biology sense, with others of their sexually-reproductive species), relative advantage trumps absolute advantage
Most UHNWIs have the majority of their liquid wealth in public stocks, real estate and bonds. It's a bit of a myth that they have exotic investment tastes (once you eliminate equity in their own businesses)
Modern UHNWI individuals in the tech markets are almost entirely stock in their own company(ies). It's paper money against which they borrow to fund their lifestyle. They do sell this stock from time to time, but mainly to pay off debt. If they sold everything all at once, the stock would tank, taking their wealth along with it.
For those like me who don’t know that acronym: Ultra-high-net-worth individuals (UHNWI) are people with a net worth of at least $30 million (according to investopedia)
So look at your peers (your socioeconomic class) and match the average portfolio.
For a tech wagie, a 60/40 for the older folks or 80/20 for the younger folks with 10% in cash will work.
For an UHNWI, look at the Tiger 21 asset allocation and follow that. (In 2023 it’s roughly 30% PE, usually your own businesses, 20% public stocks, 20% RE, 10% bonds, 10% cash and 10% alternative assets).
Overthinking here is ignoring rule #1 and possibly rule #3.
The point is simply to keep up with your peers’ returns on their wealth that they also can’t afford to lose (NOT talking about their career wealth here), within a small margin, and this should not be