Asset Allocation Article Information Summary

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• Previous presentation: Who Can Use Stock Pledging and Leveraged Funds: Understanding the Risks, rev 1.0
• Next presentation: If Your Funds Are Not Enough, You Have Not Started Pledging, You Have Not Watched the Videos Carefully, and You Have Not Studied the Excel File, Do Not Ask Pledging Questions!

Document Text

US and Taiwan retirees who need to withdraw from assets for living expenses, without pledged borrowing, and asset allocation for different funding levels: https://docs.google.com/file/d/1xeJLBxGD_iGOZTNtuT5kkG78KVyfgDoy/edit?usp=docslist_api&filetype=msword

Asset allocation for people with pledged borrowing, whether retired or not and whether borrowing for spending or not: https://docs.google.com/file/d/1EmtCiOL3A7dSmHpkvyxRi87o9DKOfOG0/edit?usp=docslist_api&filetype=msword

Asset allocation for people still some time from retirement, or retirees who do not need to withdraw from assets, rev2.0: https://docs.google.com/file/d/1HFdkW93n-1J5Bzp6VLf3uaDDZBOTLAUq/edit?usp=docslist_api&filetype=msword

Best safe asset allocation after already borrowing a lump sum through pledged assets, rev 3.0.xlsx https://docs.google.com/file/d/1s6fIn5NSsYRb5an_hnINvBjCcOhUhInO/edit?usp=docslist_api&filetype=msexcel

Simplified 30% Simulation of Asset Allocation for Different Investor Profiles, rev 4.0f2

Pledged borrowing question reply, rev 1.0 https://docs.google.com/file/d/1X0UmnG5XTjzENAnjw20OiZiHzVctnd2v/edit?usp=docslist_api&filetype=msword

Simplified 30% simulation of asset allocation for different investor profiles, rev 4.0f2, where 30% of the gain from leveraged funds in up years is moved to cash, video 00466.

https://docs.google.com/file/d/1fCrU_QJj7a3OQqzGYoppmYL31vbi9Yn5/edit?usp=docslist_api&filetype=msexcel

Retirees should deleverage and reduce debt.

When you still have wages and new cash inflow, expanding leverage can be beneficial and may accelerate asset growth.

But for people who choose early retirement or are already retired, whether through a home equity loan or a large pledged loan, borrowing does not necessarily increase asset growth. For safety, you must increase cash reserves and choose lower-volatility, lower-return assets. If asset allocation and risk control are not done properly, risk increases.

Therefore, After Retirement, Deleverage. Only People Still Working Should Increase Borrowing, and Only Borrow Debt That Wages Can Repay

• Highest guiding principles for investment asset allocation:

• Under any extreme condition:

• 1. Money markets and time deposits have no interest.
• 2. Borrowing rates rise sky-high.
• 3. Stock prices fall to zero and markets close for ten years.

• If these extreme conditions occur and you can still live calmly, that is a good asset allocation.

• There must be long-term stable cash flow.

• Emergency funds must be available at any time.

• Assets must continue growing to resist inflation.

• Cash is air. Cash is air. Cash is air.

• Keeping cash can produce returns as good as ordinary people who are fully invested without cash, while providing higher safety.

• Keeping enough cash without reducing returns is the essence of asset allocation.