How much and what equity asset classes will investors choose for their portfolios? While this podcast is aimed at young investors, it also has implications for older investors who have a portion of their portfolio invested for younger heirs.

Daryl Bahls has produced two new tables that give us a long-term view of the implications of the proportion of your portfolio that is committed to equites and the selection of equity asset class.

One table titled, “Which 2 million dollar decision is right for you?” compares 6 different combinations of 90% bonds with 10% equities.  The equity combinations include 5% and 10% positions in the S&P 500, small-cap blend and small-cap value. Compared to an all bond portfolio, the lifetime impact of adding these 10% equity positions ranges from 2 to 10 million dollars.

The second table, “Which 10 million dollar decision is right for you?” reflects the aggressive decision to invest in an all-equity portfolio with all or part of your portfolio.  In other words, you may only put 20% of you portfolio in equities but that position is left to grow without rebalancing.

Paul suggests young investors think of investing as if you are starting a company that you want to grow over the long term.

The following tables are also referenced during the podcast:  https://paulmerriman.com/wp-content/uploads/2021/06/2-4-fund-combo-2020.pdf

Table 9 in this series of tables found at https://paulmerriman.com/wp-content/uploads/2021/02/Fine-Tuning-Tables-50-50-2020.pdf

Get your free copy of We’re Talking Millions! 12 Simple Ways to Supercharge Your Retirement. Please share it widely!