Retirement Planning Mistake #7

Lack of Portfolio Plan

Do you have a portfolio plan and is it written down?  If you can lay your hands on a plan, you are a rare investor.  What is involved in specifying a Strategic Asset Allocation plan? A portfolio plan will first of all identify all the asset classes that are to be included in the portfolio.  These will most likely include bonds, large-cap value, small-cap growth, commodities, REITs, etc.  For the larger portfolios, we usually carry 12 to 15 different asset classes.  If you want to see an asset allocation plan, search for “Schrodinger” on this blog and look at the Dashboard.  That will show an asset allocation plan for a passively managed portfolio.

The second, and more difficult decision is to determine what percentage to invest in each asset class.  Too frequently, investors do not pay attention to laying out a plan of action.  Instead, they just begin to buy stocks thinking will grow as time passes.

While the Schrodinger Portfolio is a passively managed portfolio, there are portfolios tracked on this blog where we employ other portfolio management models.  Follow the portfolio reviews for specific information.