Introducing MyPlanIQ Asset Allocation Composite Strategy
In last week’s newsletter November 11, 2019: Market Indicator And Momentum, we introduced Composite Momentum strategy that, in addition to relative momentum among funds and assets, incorporates a general risk asset market condition indicator to guide risk asset allocation.
In this newsletter, we introduce our new Asset Allocation Composite (AAC) strategy and its use in asset allocation portfolios for brokerage investment accounts (IRA or taxable) and retirement plans such as 401k, 403b and annuity.
As always, we believe in diversification among major assets that include US stocks, international developed market stocks, emerging market stocks, Real Estate (REITs), commodities and bonds. Among the major risk assets (i.e. the assets other than bonds mentioned in the above), we adopt a long term strategic view that’s similar to our Strategic Asset Allocation. We further recognize that US companies, especially large companies, have oversized exposure in oversea or international markets. Thus, US stock allocation actually includes some non-insignificant exposure that needs to be taken into account. Our AAC allocation now incorporates this viewpoint.
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