Jonathan’s Portfolio

MY WRITTEN ASSET allocation calls for 80% of my portfolio to be in stocks, with the balance in bonds. That might seem aggressive for a 61-year-old, but I’ve long been comfortable taking stock market risk and, indeed, I boosted my allocation above 80% amid 2022’s stock market swoon.

The bulk of my bond portfolio is split between a short-term government bond fund and a short-term inflation-indexed bond fund. I view bonds not as a source of income, but as a place to go for cash if the stock market is suffering one of its periodic downturns. My general approach: Play it safe with bonds and take risk with my stocks.

In calculating my allocation to bonds, I ignore the private mortgage I wrote for my daughter. You can learn more about that in the chapter devoted to borrowing. If I counted the private mortgage as part of my bond holdings, my allocation to bonds would be around 25%.

How is my stock portfolio invested? I have everything in index funds, with that money divided roughly 50-50 between U.S. and foreign stocks. My various Roth accounts, which I hope to bequeath to my kids, are all invested in the same fund—a total world stock index fund.

What about my traditional IRA? In that account, the U.S. stock portion is split between a total stock market index fund, which gives me broad market exposure, and index funds that focus on large-company and small-company value stocks. Meanwhile, for my core foreign exposure, I own an international total market index fund, with smaller stakes in international value stocks, international small-company stocks and emerging markets.

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