un·shake·able An unwavering and undisputed confidence; a steadfast commitment to the truth; presence, peace of mind, and a calm amidst the storm - Tony Robbins

First, he said, we need 30% in stocks (for instance, the S&P 500 or other indexes for further diversification in this basket). Initially that sounded low to me, but remember, stocks are three times more risky than bonds. And who am I to second-guess the Yoda of asset allocation!? “Then you need long-term government bonds. Fifteen percent in intermediate term [seven- to ten-year Treasuries] and forty percent in long-term bonds [20- to 25-year Treasuries].” “Why such a large percentage?” I asked. “Because this counters the volatility of the stocks.” I remembered quickly it’s about balancing risk, not the dollar amounts. And by going out to longer-term (duration) bonds, this allocation will bring a potential for higher returns. He rounded out the portfolio with 7.5% in gold and 7.5% in commodities. “You need to have a piece of that portfolio that will do well with accelerated inflation, so you would want a percentage in gold and commodities. These have high volatility. Because there are environments where rapid inflation can hurt both stocks and bonds.” Lastly, the portfolio must be rebalanced. Meaning, when one segment does well, you must sell a portion and reallocate back to the original allocation. This should be done at least annually, and, if done properly, it can actually increase the tax efficiency. This is part of the reason why I recommend having a fiduciary implement and manage this crucial, ongoing process.

What I’ve known from the beginning is that success leaves clues. People who succeed at the highest level are not lucky; they’re doing something differently than everyone else does. I’m interested in those people: those who have a relentless hunger to learn and grow and achieve. Don’t get me wrong. I’m not deluded. I’m aware there are very few people in the world who are fit and healthy and who sustain it. Most people don’t have decades of sustained love and passion in their intimate relationships, nor do they experience ongoing gratitude and joy. There are very few people who maximize their business opportunities. And there are even fewer who start with little or nothing and become financially free.

Words form the thread on which we string our experiences.” — ALDOUS HUXLEY