Thursday, October 11, 2007

Current Asset Allocation

In the last coupleof days, I have been calculating the asset allocation for both my RRSP and non-registered accounts. I saw this as a first step towards having a global asset allocation strategy.

I detailed the asset allocation in two independent categories: geographic allocation and asset classes. I only looked at those accounts I consider there for investment, so this excludes the house, as well as my day-to-day bank account. But it includes my emergency fund and secondary bank accounts (including those in US currency).

In the geographic allocation, my assets are divided in the following way:
  • Canada: 78%
  • United States: 7%
  • Europe: 9%
  • Asia/Pacific: 6%
  • Others: 1%

As you can see, I am overweigth in Canada. I expected this, as this is one of the reasons I erformed this exercise.

As for asset classes, the allocation is:

  • Stocks: 58%
  • Income Thrusts: 12%
  • Bonds: 7%
  • Cash: 16%

This, however, was a mild surprise. I would have thought I had more stocks and less cash. Of course, including my emergency funds modified the balance quite a bit. In fact, it results in about 50% cash in my non-registered assets.

Already, I can see that I need more international exposure in my stocks. I have already modified the allocation of my new contributions for my RRSP so that a bigger share of new contributions go towards the international part of my portfolio.

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