Since time immemorial mans have unlimited needs and wants. This makes us desire for everything. However, our desire is limited by the amount of finite cash we have. Therefore, we should allocate our limited cash to fulfill our needs and wants at the optimum level and overcome the opportunity cost involve. Opportunity cost here would mean the loss of opportunity on other asset class as we allocate to one particular asset class.
I would like to suggest an asset allocation that can withstand the test of time whether it is boom, bust, depression or disaster that will be able to grow with time and conservative in nature as well. Just remember that the dark days are many.
Therefore, i would allocate my asset class as follows:
1. House and Lands and cash which include insurance policy, foreign cash and retirement saving 30 percent.
2. Stock, bonds and derivatives 30 percent
3. Cars and Collectible 20 percent
4. Gold and Precious metal 10 percent.
5. Crypto 10 percent
This would make sure that we can withstands the ups and downs of the economy and rebalance our asset class as one asset class outperform the other or when one asset class underperform.
It is better to be ten years early than one day late.
Moral of the story: Fate favors those who are prepared and Murphy law state that calamity that we are prepared for in advance will not come to fruition.
Teach a wiseman and he will be wiser.
In God we trust,
Dr. Lion.
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