Asset Allocation

Prerequisites

• Emergency Fund of 3-6 months expenses saved
• No High Interest Debt
• A Full Pantry

Watch: Diversification Video

Read: The Best Investors Are Dead

Disclaimer

I am not an investing professional, fiduciary, or broker. This example is for educational purposes only and is not intended as financial advice. All investments involve risk.

Method: Dollar Cost Averaging (DCA)

This long-term passive portfolio uses DCA — an automatic transfer from your bank to your portfolio every paycheck.

How Much Should I Contribute?

• 401(k) Matching: Contribute up to the matched percentage — not more.
• No Match: Use a traditional IRA and start small. Increase contributions over time.

Use tools like the Investment Calculator.

Portfolio Allocation

• 10% Cash / Cash Equivalents
• 45% Equities
• 15% Fixed Income
• 15% Real Estate / REITs / MLPs
• 15% Commodities & Alternatives

Cash / Equivalents

"Dry powder" for opportunities. Accept inflation loss in exchange for flexibility.

• High-Yield Savings
• Money Market Funds

Equities (Stocks/ETFs)

Lazy: VTI. Diversified: 80% US, 20% International. My picks:

• VIG (US dividend growth)
• VIGI (International dividend growth)
• SPLV (Low-volatility dividend ETF)

Fixed Income

• PFF (Preferred stock)
• TLT, VBILX (Long-duration treasuries)
• VTABX (International bonds)
• VTC (Corporate bonds)

Real Estate / REITs

For those not managing properties personally.

• VNQ, VNQI
• Optional: LAND, DLR, UNH, O

If you own significant physical real estate, reduce allocation here.

Commodities & Alternatives

• GLD/SLV or physical metals
• PDBC, PICK, DBA
• Crypto, art, collectibles

Reduce percentage if you're young — but always keep a little precious metal.

Advanced Notes

• Dividends: Reinvest or collect in cash depending on the market.
• Age: Increase cash/fixed income as retirement nears.
• Rebalancing: Annually or when allocations drift by 10%.
• 401(k) Rollovers: Roll into an IRA when changing jobs.

Why This Strategy?

People often ask how to get started. This approach is simple and passive, yet effective. DCA may not always beat active strategies — but it's easy to execute and outperforms most people who try to time the market.

Watch: DCA vs Buy the Dip

Rules and Exceptions

• Never borrow against your portfolio.
• Don't break the rules until you truly understand them.
• Use matching 401(k) to your advantage — it's free money.