I agree with Michael that a 70% allocation to US stocks is way too high. US stocks’ outperformance against international developed stocks can almost entirely be explained by the increase in the US market’s valuation (which shouldn’t be assumed to continue and indeed, is more likely to reverse). See AQR’s analysis on pg 6 here. Also, what about Emerging Market stocks? This should certainly get some allocation as well, especially if you’re focused on the next 100 years. China and India will increasingly be key economic players and have capital markets that will outgrow the US in importance. In fact, 6 of the 7 largest economies in the world in 2050 are likely to be emerging economies. When it comes to investing, beware of simply extrapolating the past into the future! The US markets have done well because the US has been the dominant country in the 20th century. This is unlikely to continue during this century.
A 10% global bonds/90% global stocks portfolio is likely to be more robust and not suffer from a USD/US historical bias. Keep it simple and avoid picking bond/stock market winners.
I agree with Michael that a 70% allocation to US stocks is way too high. US stocks’ outperformance against international developed stocks can almost entirely be explained by the increase in the US market’s valuation (which shouldn’t be assumed to continue and indeed, is more likely to reverse). See AQR’s analysis on pg 6 here. Also, what about Emerging Market stocks? This should certainly get some allocation as well, especially if you’re focused on the next 100 years. China and India will increasingly be key economic players and have capital markets that will outgrow the US in importance. In fact, 6 of the 7 largest economies in the world in 2050 are likely to be emerging economies. When it comes to investing, beware of simply extrapolating the past into the future! The US markets have done well because the US has been the dominant country in the 20th century. This is unlikely to continue during this century.
A 10% global bonds/90% global stocks portfolio is likely to be more robust and not suffer from a USD/US historical bias. Keep it simple and avoid picking bond/stock market winners.