Would you allocate your funds into a Swensen portfolio if you came across a big chunk of money?
https://portfoliocharts.com/portfolio/swensen-portfolio/Here is the situation. I am sold on the idea of index investing, and am moving in that direction after spending a few years using real estate as a savings account and some moderate success with AirBnB. I want to get rid of the houses because I do not want to have to deal with their maintenance and management from afar. Things are chugging along, so I am not in a hurry, but I want to simplify my life and make everything truly passive. I know others have done the whole real estate while travelling the world gig, but it does eat into my peace of mind a bit.
I don’t want to get into full blown case study territory, but here are some numbers:
AssetsHouse 1 – On the market, listed for 485K, probably will sell for 450K – US Based
2- On the market, listed for 390K, probably will sell for 350K – US Based
Investment 1 – 12K on a Vanguard Asia Ex Japan fund – HK Based
Investment 2 – 11K on a retirement account, indexed to HK Stocks, available when I am 60-something
Cash – 120K, in an account in Brazil
Liabilities 60K on House 1, at 4.65% - No prepayment penalty. Whenever I accumulate about 5K from rental income in my US account, I hit the principal with about 3K, so this will get paid off before too long.
120K 5 year unsecured loan at 0.8% - Prepayment penalty, payable in 5 years
Periodic contributions Appx 12K a month to Investments
Peanuts to the retirement account
Based on my total expenses my FIRE number is around 1.2 million, though I could probably live off the AirBnB income from the houses and 3 months or work a year right now. I don’t want to do that until I sort some personal stuff out. Once I liquidate the houses, and wrest my money from Brazil, I intend to put those amounts into a passive index portfolio.
My original plan was to just toss everything into equity indexes and be done with it, but given the recent exuberance of the equities market and the fact that my time frame is short (3 years to the magic number), I am wondering if it would make sense to diversify a bit into the strategy described in the link above to safeguard against dips right after I pull my pants down and run out of my office naked.
Just kidding - the people I work with are nice and I'll give them proper notice and a chance to find a replacement for me, but I am gonna pull the plug for sure.
I wonder if the presumed lower volatility of the so-called Swensen portfolio would make sense. To be honest, I have not read his book yet, but will be checking it out. Nonetheless, I thought that posting here might give me a kind of “Cliffs Notes” start to my study. I am absolutely cheating here, and have no shame about asking smart people about it before I go on a wild goose chase.
Any thoughts? This seems to have been working well for Yale.