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Stingy Investor Tip Sheet

Asset allocation for the ages

I attended a CFA conference this week and Kim Shannon from Sionna gave an interesting talk on dividends. At the end, she provided a quote on asset allocation from the distant past.

"Divide your fortune into four equal parts: stocks, real estate, bonds, and gold coins. Be prepared to lose on one of them most of the time. During inflation, you will lose on bonds and win on gold and real estate; during deflation, you will lose on real estate and win on bonds while your stocks will see you through both periods, though in a mixed fashion. Whenever performance differences cause a major imbalance, rebalance your fortunes back to the four equal parts."
- Jacob Fugger the Rich, 1459-1525


I admit to knowing little of Fugger, but it's a fun quote from the past. Call it asset allocation for the ages.


12/06/2008   9:30 PM EST   Permlink   save & shareAsset Allocaiton



 
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