“Considering how low bond yields are now, U.S. investors may want to try to think more creatively about their asset allocation,” notes the author of today’s article. One avenue investors may want to consider? “Treasure assets” (art, watches, fine wine, rare coins, high-end cars and more) which, despite their ability to help preserve wealth, make up a significantly lower percentage of Americans’ portfolios compared to global investors. For more on the potential role for treasure assets in your portfolio – including how various treasure assets have performed over the last decade – CLICK HERE.
“Asset allocation is typically the most important aspect of portfolio management so understanding how the various asset classes performed is instructive when trying to understand your results,” explains the author of today’s article before sharing his updated “asset allocation quilt” – which shows the returns (and respective rankings) for each asset class for each of the past 10 years – and some important takeaways from it. What insights can be gained from the inclusion of 2018’s returns in the quilt? CLICK HERE.
The author of today’s article declares that if you don’t own microcap stocks (stocks with market capitalizations under $300 million), you are missing out, and proceeds to outline “five important reasons why microcap stocks warrant a piece of your asset-allocation pie.” Reason #1 (and perhaps the most important for investors)? Microcaps outperform bigger-cap stocks over the long term, including both high-return cycles and low-return cycles. To read the other four reasons the author offers for why microcaps deserve a piece of your asset allocation, as well as two additional reasons that have particular resonance in today’s low-growth environment with the prospect of a rate hike, CLICK HERE.
While most individual investors understand the concept of asset allocation, today’s article states that the same cannot be said about their understanding of asset location, which the author describes as “placing or locating assets in the most tax-efficient account type.” To demonstrate the potential impact of strategic asset location, the author outlines an example where the hypothetical investor’s asset location choices end up producing a difference of over $1 million! To read more about this scenario, as well as for a guide on where you might want to consider placing different types of securities, CLICK HERE.