Finer Things in Life (FTIL-5) – Personal Financial Portfolios

My Merrill financial advisor and I recently met up to discuss 401K allocation for one of my companies (and to grab some cold ones but that’s another story…)   His point – certain overseas sectors ran up too hot in the past quarter or two thus ripe for correction.   His recommendation – take some off the table and add to our existing dry-powder for a sector correction he sees coming.  I trust Chris implicitly so agreed even before we took the first sip of Trumers at my favorite pub in Chicago.  At the end of the evening, I couldn’t help but to wonder where should people invest their money now given today’s market variables – major NA indicies are either at all time high or near all-time high in the past 4 or 5 years; investors are leaving treasuries pushing yields to a level that has not been seen in recent months; Fed’s comment, lisp or slip of potential near-term inflation; the EU finally bailing out its weakest member; and even the TSE (Tokyo Stock Exchange) crossed 10K mark.    While I take pride in the fact that Intel stocks I purchased in the late 80’s with a car loan I took out during senior year in college helped to pay for my graduate degrees and Apple stocks purchased when Gil Amelio was briefly the CEO there in the 90’s paid for my wife’s recent big purchase, I am no financial advisor nor do I claim to be a stock picker.  Having said that, I do have an opinion (just keep in mind that opinions are like a**h****, everyone has one)…

  • Group 1 (20’s singles) – most experts agree that folks in this demographics should invest most of their savings, especially retirement accounts which they presumably will not touch for the next 40 years or so, in equities, specifically domestic and foreign.  Emerging market bonds also provide a nice hedge against the US bonds.  Recommended mix – 80% stocks and 20% bonds and cash.
  • Group 2 (40’s married or domestic spouses with kids) – near and dear to my heart since my wife, son (21 months old) and I fit into this group.  Yes, I am faced with and accept the fact that the demographics I fit into is labeled “middle-aged.”  May experts still tout equities for this group but also higher percentage of fixed-income and alternative investments such as precious metals or exchange trades funds.  Recommended mix – 50% stocks, the rest in bonds and cash.
  • Group 3 (70’s in their first or second marriages with lots of heirs) – I have no opinion on this segment but am sure I will have one when I get there  J

To state the obvious – invest early, invest often, diversify, manage risks and pay attention to whart’s going on in the world.  And if you have a financial advisor, buy him a drink every so often for keeping you out of trouble.  Here’s to investing wisely, living healthy lives full of love and enjoying the Finer Things in Life!

What MATTERS to SMBs. SMBMatters.


About Richard Lee
Experienced finance and operations professional. Currently partner in five companies, adjunct professor of economics at Columbia College and executive contributor to a small business blog (; following corporate finance, M&A and management consulting tenures with Orbitz and Diamond Technology Partners; and six years of service with the United States Army.

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