- 20% US large-cap
- 15% US mid and small cap
- 35% broad-market international stock
- 5% emerging markets
- 15% bonds
- 10% real estate and commodities
Fast-forward to today, when US stocks have significantly outperformed international since then. I've rebalanced to the above AA diligently and therefore missed out on some growth from domestic stocks (but overall financial situation is fine). From what I understand, the US/international cap weightings are something like 55/45, and the general recommendation I've seen is to go no more than this cap weighing for the equity portion of my portfolio. I'm 75% equities so that would be something like 40% US/35% int'l compared to the 35%/40% I'm at now. On the other hand, international equities have a lower valuation (P/E ratio) than US equities, so maybe it's a good bet they will have higher returns going forward. Should I adjust my AA or stick with what I've got for now?
Personal details: married, late 30's, live in California, $450k HHI, $3.5M net worth, $1.5M of which is invested according to the above AA (the rest being private equity, home equity, 529's, emergency fund, etc)