Asset Allocation

Andrew_A said:

Far from an expert on allocation but it's very interesting to me.

From what you have posted (and depending on where you are in your wealth creation process) it might be prudent to consider the issue of correlation.

You are very heavy in property and shares as are a lot of people on Ssoft I predict. I imagine the performance of your funds and general property would have an unhealthy (if/when the economy turns) connection.

For a defensive scenario I would be looking at perhaps some exposure to Commodities, the whole world just thinks gold and oil but there are actually other commodities out there as well. I have set up an account to let me get at the physical commodity markets directly rather than just investing in companies that produce them. Also exposure to foreign equities is another idea that most people first think of, though I have read that world stock markets are becoming increasingly linked, and there are a lot better ideas for diversification out there I think.

One scenario that everyone needs to think about is what will happen if the world goes into a recession as people like George Soros are predicting for 2007 A possibility where both shares and property could suffer in Aus for example.

One expert I can fully suggest reading for ideas regarding asset allocation is Random Roger

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