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moneysense.ca, 28/09/05
Another Lazy Portfolio
Columnist Paul B. Farrell tracks four “lazy” portfolios and has added a fifth to his collection: The Yale Lazy Portfolio. The portfolio is from David Swensen’s book Unconventional Success. Like all “lazy” portfolios, it is made up of low-cost index funds and the allocation is as follows:
US Equity: 30%
International: 20%
REITs: 20%
Bonds/TIPS: 30%
The high REIT allocation is a surprise, but the other asset classes are inline with other “lazy” portfolios. For a Canadian version, check out the MoneySense Portfolios or my Sleepy Portfolio, which I track to benchmark my returns.
moneysense.ca, 28/09/05
[...] A Real Estate Investment Trust or REIT is an asset class that allows you to get exposure to real estate in your portfolio. Real estate is an interesting asset class because historically it has offered a higher return than bonds (but less than equities) albeit at a higher risk (again less risk than equities). Also, real estate has low correlation with other asset classes and adding it to your portfolio will reduce overall volatility. An allocation of 5%-10% to REITs seems reasonable but some recommend going as high as 20%. [...]