Index Universe posted some comments from Vanguard on their thoughts about portfolio construction looking out over the current decade. The headline was Stick to Allocation Strategies and from the standpoint of not giving up on equities, I agree completely. I've said before that for people who have learned they just cannot handle the potential volatility with equities fine, just understand the tradeoff of needing to save more.

I wanted to delve a little further into the Just Don't Lose It cover story from this week's Barron's. The article included some sort of model portfolio that US Trust is apparently recommending to its clients. There were a couple of different things in there so this will focus on the "long term benchmark" which was as follows;

Cash 0%
US Large Cap 16%
US Mid Cap 7%
US Small Cap 4%
Developed Foreign 9%

I enjoy reading older books about early retirement; I seek to learn from their experiences, but I also look for ways in that their perspective is colored by their own time period. For instance, a book written in the 80s1 – an era of high inflation – would likely assumed that interest rates would be moderately high forever, at least in the 5% range. The tendency to extend recent trends into the future is unavoidable, and something you should consider when reading or making forecasts today.

Here are seven (or so) links at 7AM Eastern.  We will see you later with the daily linkfest.  Good luck out there.

Sean McLaughlin, “Show me 100 successful traders, and I’ll show you 100 unique ways to make money in the markets. There’s no one BEST way, there’s only the way that works best for you.”  (Chicago Sean)

A few weeks ago I shared an opinion (or hunch if you prefer) that I thought the US market was going to be in for a range busting rally that I think will then retrace. It is too early at this point to know whether this is yet correct or incorrect but I have made an observation that I hope is useful even if not original.