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What are some suggestions for allocation and diversification of my portfolio?

I am self-employed with approximately $1.2 MM in various IRAs, 401(k)s, and a couple annuities. I also have another $250,000 in liquid savings. I will probably never fully retire, but I fear taking a major hit on my portfolio. I am turning 68 years old and my wife will turn 65 years old this year. What are some suggestions for allocation and diversification of my portfolio?

Retirement, Retirement Savings, 401(k), Annuities, Asset Allocation
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February 2019

I agree with Dan’s response that it is impossible to answer what kind of diversified portfolio would be right for you, given that we do not know any specifics about you.

However, in general, a modern-day investment portfolio in 2019 for an accredited investor such as yourself should be diversified beyond traditional equities/bonds, and also include Alternative Investments. University Endowment Plans and Family Offices have been incorporating Alternative Investments for over 30 years in their asset allocation models and accredited investors should take advantage of them as well.

I believe that traditional investment models of 70/30 60/40 50/50 etc., of stock/bonds are considered only partially diversified and are inadequate in today’s investment markets. They leave out an important asset class that are available to modern-day investors, which means that you miss out on valuable investment opportunities, that can better grow and protect your investment portfolio at the same time. For today’s standards a fully diversified portfolio should be closer to a 30/30/30 mix of equities/bonds/alternative investments. This “Full Spectrum” diversification model would achieve the following:

  1. Less stock and bond market dependence
  2. Lower portfolio volatility
  3. More predictability
  4. More tax advantages that traditional equities and bonds cannot offer
  5. A more un-emotional way to invest
  6. Better downside protection during market downturns

I hope this gives you a start to better protect, diversify and grow your assets as a modern-day investor.

Thank you,


February 2019
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February 2019