When making a portfolio, to me its
that one looks for. With that, REITS, seem to fit the bill.
All have low correlation to each other expectantly. I would keep REITS at 10 percent long term.
1)REITS have the expected return near stock
2)they have the low correlation in the past with both business stocks and bonds
3)due to mechanism of earnings, rent from land, Real Estate Investment Trusts (REITS) correlations going forward are expected to be different from business returns, and stock returns.
Its return and low correlations expected that are key in a portfolio. REITS are great by those criteria expectantly. Stocks, bonds, land. Simple diversification.
I would go passive indexing entirely if possible. I have never seen anything which points to any sort of scheme/active management beating passive long term in a predictable fashion, after fees, that is available to regular investors.
All I see is evidence to the contrary, that a higher fee active managed product is expected to lose relative to the index going forward. Your active funds, are expected to lose going forward.
Bonds, you should include 10 percent bonds. This is not neccessary per se. I think 100 percent stock is reasonable at 24 and 100K. But if you have 100K, have slice and diced, SV tilts, and such. Well, the glaring lack is lack of bonds. 10 percent is wise.
The main deal is, to get something simple, and then stick with it.
Get something you can live with when things TANK, and when stocks do GREAT. You want to have one all purpose allocation. Humans, when they adjust to current events, expectantly lose relative to buy and hold. you want to gradually increase bonds as you age, in some sort of preplanned fashion as well.
Your portfolio is fine, your main risk is being human, that at some point, you will bail out when the going gets tough, or buy into some faddy type investment when the going gets great.
Do not think in terms of the current market, think in terms of a late 80s, 90s boom market, think in terms of a 73 74 market, etc. etc. Try to find something you can live with in all those markets, because thats the best approximation going forward of whats gonna happen. Humans form thier portfolio according to recent past events, one has to try and divorce oneself from that. Think of the future market as a smear of all those past events, thats what you should make your portfolio in response to, not just the most small recent slice.