After reading [](AssetClasses) we can then start to think about Asset Allocations, i.e. of these [](AssetClasses) what should we own, how much, and should we change our allocation over time?

The easiest answer, if you don't want to think about this stuff is a "Target Date/Retirement Index Fund".  Fidelity and others offer them, and they are the easiest sane answer, just pick the farthest date out that you might retire and buy that fund(It's totally fine to retire before the date on the fund).  You can now safely ignore the rest of this page.

Your people probably talk about some common portfolios/Asset Allocations, let's talk about some of the more common ones:

<h3>Five Factor / Factor investing.</h3>

This method of investing is guaranteed to be a very bumpy, emotional ride, you absolutely must prepare to lose to the market for many decades.  The academic theory is you will eventually be rewarded.  It's still not rigorously proven.

This economic science is new, and there were originally [3 in but they were proven to not fully explain the markets and they created the [5 factor Since then, there has been an academic free-for-all trying to invent a bajillion more "factors" that can beat the market, I would bet 99% of them are bogus and so far academics are proving them to be mostly non-existent.  So far the 5 factor model is the best academic-based answer we have on how to make money in the stock market, but it's not rigorously proven yet.  Implementing the 5 factor model for a DIY investor isn't the easiest, these days you can go through a financial advisor that has access to the funds or use something like the funds.  [Paul is a fan and following his advice is a decent way to not get to off-track.


<h3>All Weather Portfolio / Turtle Investing.</h3>

Ray Dalio is famous for this method of investing, the idea is you own things that do well for any given economic condition, so you always have something doing well, so no matter what happens, you should be OK.

Often not talked about, but because you in theory own something that will always do well, you also will own things that will do poorly, which means some of your assets will ALWAYS underperform or lose money, it is by design.  Since it is hard to know what will work out well in the next decades, we own everything and accept the lumps when they happen.

I call this Turtle Investing and has a lot to do with Date This method of investing says, I don't want 30% returns on occasion if it means I have to eat 50% cuts on occasion, I'd rather just plod along like a turtle with strong stable growth overall. Economic academic literature doesn't spend much if any time researching this that I'm aware of.

If this idea appeals to you:

My personally created "Turtle Portfolio", modelled after the [Pinwheel

ETF:

```
15% VTI (Total Stock Market)
15% VXUS (International Stocks)
--- Alternatively just hold 30% of VT, if you don't want to hold them separately
10% IJS (Small Cap Value)
10% VWO (Emerging Markets)
15% BND (Intermediate Bonds)
5% VNQ (Real Estate-REIT)
10% VPU (Utilities)
10% SGOL (Gold) IAU is the common choice, but SGOL is cheaper(.17ER vs .22).
10% cash (hold in your
```
Fidelity Version:

```
15% FZROX/FSKAX (Total Stock Market)
15% FZILX/FTIHX (International Stocks)
10% IJS (Small Cap Value)
10% FPADX (Emerging Markets)
15% FXNAX (Intermediate Bonds)
5% FSRNX (Real Estate-REIT)
10% VPU (Utilities)
10% SGOL (Gold) IAU is the common choice, but SGOL is cheaper(.17ER vs .22).
10% cash (hold in your
```

While accumulation phase, re-balance with new $$'s.


<h3> 60/40 AA "bogleheads" portfolio</h3>

This is the "classic" 2 or 3 fund total market and bond holding fund.  The idea here is you own the Total Market(though people disagree if "total" means US only or not, hence the 2/3 fund debate) and some bonds.  With bond prices guaranteed to be terrible for the 2020's, owning bonds right now isn't the smartest choice, but it's definitely safe enough.  See the wiki page about it.

For the 2020's while accumulating, I'm more of a 100/0 bogleheads portfolio type, I.e. skip the bonds, and just own the total stock market, until we know what interest rates(and there for bonds) are going to do.  If you already own bonds, there is probably little reason to sell them.