Is this the perfect investment portfolio?

I want a simple investment portfolio that I don’t have to fool around with, and which I know maximizes my chances of earning a good long-term return, and minimizes my chance of ending up in the poor house. 

I want an investment portfolio that is exposed to all likely environments, and committed to none. One which is based on intelligence and reasonable suppositions about the future, and not merely data mining from the past.

And so, what is in this all-weather portfolio? 

It’s 10% each in the following 10 asset classes: 

U.S. “Minimum Volatility” stocks

International Developed “Minimum Volatility” stocks

Emerging Markets “Minimum Volatility” stocks

Global natural resource stocks

US Real Estate Investment Trusts

International Real Estate Investment Trusts

30-Year Zero Coupon Treasury bonds

30-Year TIPS

Global bonds

2-Year Treasury bonds (cash equivalent)

For simplicity’s sake, the portfolio I’ve modeled is rebalanced once a year, on Dec. 30.

DYI Comments:  I'm surprised the author of the article didn't mention the Permanent Portfolio Fund that has been around since December 1, 1982.  They own 35% in Dollar assets [corporate bonds, treasury bills, notes, bonds and zero coupon bonds] 20% gold, 5% silver, 10% Swiss Franc bonds, 15% U.S. and foreign natural resource stocks and real estate, 15% growth stocks.  That is broad diversification in one package.  Very simple and with low turnover making for an efficient mutual fund.  An excellent core fund.

Here at DYI I use five different funds depending on the historical over or under valuations.

AGGRESSIVE PORTFOLIO - ACTIVE ALLOCATION - 06/1/14

Active Allocation Bands 10% to 60%

45% - Cash -Short Term Bond Index - VBIRX

25% -Gold- Precious Metals & Mining - VGPMX

20% -Lt. Bonds- Long Term Bond Index - VBLTX

10% -Stocks- Equity Income Fund - VEIPX

[See Disclaimer]

Lessons for investors from Japan's lost decades

The world’s major economies have entered a remarkable period – one marked by record-low interest rates, stubbornly slow growth and persistent unemployment.

Investors searching for clues about how to navigate this unfamiliar terrain may want to take their cues from one country that has been experiencing similar conditions for more than 20 years: Japan. 

The lesson? Broad diversification works. 

A Japanese investor who held government bonds, foreign stocks, precious metals and cash, in addition to domestic shares, would have blunted the Nikkei’s fall and even earned a profit. That may not be the most exciting take-away from Japan’s experience, but it’s one time-tested result that investors should keep in mind as they seek a refuge from today’s market weakness.

DYI