Adam and Andy tackle an important investment decision: how to divide your portfolio across cash, bonds, stocks, and alternatives.

They start by explaining the two factors that actually matter for determining asset allocation: your personal risk tolerance and how much income you need from the portfolio. Age-based rules like "subtract your age from 100" completely miss these critical inputs.

Then they walk through each building block. Cash is great for emergencies but terrible for long-term investing because of inflation. Bonds offer stability and income but come with credit risk and interest rate risk that many investors don't fully understand. Stocks provide the best long-term inflation protection but require stomaching significant volatility along the way.

They finish with alternatives, cutting through the hype to explain when private equity, private credit, and managed futures actually make sense as diversifiers rather than home run swings.

We cover:

Why your age doesn't determine your appropriate risk level
How to think about risk tolerance when markets are calm versus during selloffs
Cash as an emergency fund versus portfolio holding
Why inflation is the silent wealth killer
Credit risk versus interest rate risk in bonds
The inverse relationship between interest rates and bond prices
Stock market volatility: what to actually expect each year
How volatility decreases over longer time horizons
Alternatives as diversifiers, not performance enhancers
Which alternative strategies we use and why

⏱️ Timestamps:

(01:05) Introducing asset allocation and why it’s important
(03:31) The two inputs that determine your allocation
(08:10) Should older individuals avoid risk?
(09:58) Pros & cons: Cash
(16:07) Pros & cons: Bonds
(25:53) Pros & cons: Stocks
(32:31) Pros & cons: Alternatives
(40:19) Podcast disclosures

Resources:

Follow Burney Wealth Management on LinkedIn

Follow Adam Newman on Linkedin

Follow Andy Pratt on LinkedIn

Ep. #16: The Psychology of Investing: Why We Make Bad Money Decisions

Ep. #24: Required Minimum Distributions, The Fear & Greed Index, and Private Equity

#AssetAllocation #InvestmentStrategy #PortfolioConstruction #RetirementPlanning #WealthManagement #FinancialPlanning

The Burney Company is an SEC-registered investment adviser. Burney Wealth Management is a division of the Burney Company. Registration with the SEC or any state securities authority does not imply that Burney Company or any of its principals or employees possesses a particular level of skill or training in the investment advisory business or any other business. This content is for informational and educational purposes only. It is not intended as personalized investment advice or a recommendation.

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