beanhead wrote: ↑Fri Jan 10, 2025 1:54 pm
What? No REITs?
The longer your retirement is, the more it makes sense to keep in assets which will grow above inflation (ie equities, equity funds).
Yes, you are right to make sure you have some Japanese assets to reduce FX exposure.
But this could be just a larger pile of cash, to cover a few years worth of spending.
There is value in keeping things simple, and not getting caught in analysis paralysis.
Well, REITS as well as commodities and private equity are also in my portfolio, just as they are in GPIFs so it's not a puritan 4 asset class portfolio...
I'm not a believer in the sort of 100% bonds, CD and MMFs retirement portfolio that you see in something like the
DC Nissay Target Date 2025 Fund. I've built up my nest egg with a 60% stocks 40% bonds market cap weighted global portfolio and am now thinking of changing to a more conservative allocation with less volatility with something like the GPIF allocation. That model is still a fairly typical balanced fund in my mind, since it has 50% stocks and 50% bonds. The main difference is the overweighting (in market cap terms) of yen denominated assets which reduces risk for the portfolio. 4% expected return against that risk profile is not bad at all imho.
This table from the explainer article "
GPIF（ジーピーアイエフ）の分散投資（2）" on the Daiwa Securities website shows how the 4 asset equally weighted allocation provides relatively good returns for much less risk compared to say a 100% stocks portfolio.
