Another Way To Rejigger Your Portfolio

Posted by: Lauren Young on September 26, 2008

In this week’s issue of BusinessWeek, we asked top financial advisers how they would invest $250,000 for moderate growth over the next five to seven years. We didn’t have space to run all of the detailed recommendations in the magazine.

John Burns.jpgHere’s how John Burns, a certified financial planner at Burns Advisory Group in Oklahoma City, Okla., would invest $250,000.

Rationale: “Because of the possible 5-year time frame for this investor, the fixed income options used are tilted towards shorter-term bonds,” Burns says. “If equity markets continue to struggle, we will go here first to raise cash for withdrawals. The equity portfolio is designed to capture areas of the market (notably smaller companies and more value oriented companies) that typically outperform the broad market over time, especially when equity markets are recovering from a substantial downturn. Although the portfolio is tilted towards smaller and value companies, the portfolio is globally diversified and holds thousands of stocks including larger and some growth companies.”

Recommendation:
Burns allocates 70% in stock funds and 30% in bond funds. His picks are:

Vanguard Short Term Inv. Grade Bond (VFSTX): 15%

PIMCO Total Return Inst (PTTRX): 10%

Loomis Sayles Bond Inst. (LSBDX): 5%

DFA Global Real Estate Portfolio (DFGEX): 5%

DFA US Large Cap Value (DFLVX): 14%

Selected American Shares D (SLADX): 8%

Amer. Fds. Growth Fund of Amer. F2 (GFFFX): 8%

DFA US Small Cap Value (DFSVX): 15%

DFA International Value (DFIVX): 5%

American Funds EuroPacific (AEPFX): 5%

DFA International Small Cap Value (DISVX): 5%

DFA Emerging Markets Value (DFEVX): 5%

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About

Bloomberg Businessweek’s Ben Steverman focuses on the latest moves in financial markets and emerging trends in stocks, bonds, and funds, always with an eye toward giving readers a better understanding of the sometimes confusing and often chaotic world of money. Standard & Poor’s senior index analyst Howard Silverblatt will also provide his take on companies’ finances and the markets. Voted one of the “Top 100 Finance Blogs” in 2007.

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