Poll: Asset Allocation (other than stocks)

Do you own (or plan to own) x% or more (of your net worth) of certain asset classes? Multiple choice is possible.

  • a) 15%+ Fixed Income / Cash
  • … not yet, but a) is my plan
  • b) 15%+ Real Estate
  • … not yet, but b) is my plan
  • c) 15%+ Commodities
  • … not yet, but c) is my plan
  • d) 15%+ Crypto
  • … not yet, but d) is my plan
  • e) 15%+ Other (but Non-Stocks)
  • … not yet, but e) is my plan
  • f) 30%+ Non-Stocks as a whole
  • … not yet, but f) is my plan
0 voters
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Where does Pillar 2 goes?

edit: and no non-of-the-above option? (e.g. for people 100% equity)


I don’t know :slight_smile: it won’t go neatly in any category (but it’s close to fixed income?)

I would not include pillar 2 in this question, because the goal of the question is to understand how many of us are not 100% in stocks in their free net worth and what they do.

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It’s a bit weird, some of us are doing holistic asset allocation (beyond free net worth), so it might not give you the answer you’d want to know?

(anyway I counted pillar2 as non stock :))

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Best is to include those assets that both i) are accessible to the public and ii) you can exercise control over and use for re-balancing.

You can neither control your Pension Funds Asset Allocation and Interest nor can you use it to re-balance against Shares. Further, your pension funds asset is nothing anyone else could invest into - what does it help me if there is a fund that yields 20% p.a. but I can’t access it, nor do I know how long I would stillbe able to keep the Investment (change of job => major change to the investment, its risk and return).

Meaning that I would count self-invested FZ invested e.g. at Viac and 3a, as well 1e but not Pension Fund Assets as such. Would as well remove non-vested Stock options; shares with a lock-up beeing the borderline case.

My AA:

  • 3a: 40% Shares, 8% Swiss RE Funds
  • Basic Needs Pension Planning Portfolio: 53% Shares, 15% Swiss RE Funds & Shares
  • Excess Savings Portfolio: 65% Shares, 35% Swiss RE Funds
  • Pension Fund is about as big as my „Basic Needs Pension Planning Portfolio“
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I would consider it 35% Shares, 25% Real Estate, 25% Bonds and 15% Alternatives (that both smoothen its return over a few years and that give you a Short Long-Term-Treasury exposure)

But as said above, for this exercise I would not count it.

To be sure I am understanding correctly, simplifying means the 6% CAGR and maximum 30% drawdown are in nominal USD (so no inflation adjustment and returns accounted for in USD)?

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I’d do 60/40 bonds/stocks. A higher amount for stocks would risk failing the 30% drawdown hurdle.

Actually, make that 80/20 bonds/stocks. TLT already gives you >5% so with capital gains and the automatic re-balancing with stocks, you can probably make up the missing CAGR target.


6% CAGR with no more than a 30% drawdown seems like a big hurdle. I don’t see the Golden Butterfly or the All Weather reliably beating the CAGR burden, the 60/40 would probably struggle with the max drawdown.

Here would be my bet: Wolverine’s Extraordinaire Risk Adjusted Performer (please, pretty please, ignore tax and asset management drags)

75% High Yield Corporate Bonds (VWEHX)
25% Gold (GLD)


I don’t because they’re not a very efficient investment for a swiss investor: high taxable yield and high TER. My own parameters also allow for bigger drawdowns, so I can afford a high stocks allocation, which is better mixed with higher quality bonds.

I’d consider junk bonds as behaving like a mix of stocks and bonds. There’s probably a tax premium somewhere in there because for many investors (at least US and Switzerland), the high coupons are taxed higher than capital gains would so I guess investors would want higher returns to compensate for that. I would consider them fine for an investor still wanting some level of returns with a lowish volatility.

They’re what came to my mind given the specific conditions of this poll and since a 100% allocation to them has historically been (since 1979) a bit too close to the 30% drawdown to my liking, I’ve tried to tame them a bit. Gold is in my usual trifecta of uncorrellated assets of stocks, investment grade bonds and gold so I’ve used it for that since stocklike and bondlike behavior was already kind of included into the mix.

I’m fairly confident it can hold up to the challenge.


in your simplified scenario, inflation doesn’t exist :wink: Although you can get inflation protected bonds with very little yield hit right now (market doesn’t price in much inflation risk).

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  • Bearer asset/no counterparty risk


  • Very long cycles (maybe more useful for multi-generational timeframes)
  • Cost/hassle of holding/storing
  • Cost/hassle of transacting

I always find it is never at the price I want when I want to buy it. And then it is then too late.

It seems like gold is just an asset you have to buy early, hold onto and overpay and suffer the opportunity costs, because it feels more like insurance than investment.


Gold only works if you re-balance it systematically and at low cost. Personally, I learnt that I faily to re-balance gold in my personal portfolio. Physical gold comes with very high transaction cost and even on paper gold, my emotions often come in my way as you generally re-balance gold in times of distress. Hence loads of investor risk that you start to fiddle around with your asset allocation. Therefore, I only hold gold in my 3rd Pillar - where I have an automatic set and forget re-balancing logic at zero/no fees. There, Gold works for me.

The question however is if you trully need gold. My sample portfolio above serves a second purpose - I used very strange assets and essentially just equal weighted them, gold beeing part of them. The outcome pretty much matches a combination of Shares, Bonds and Money Market. So long story short: Efficient Market Hypothesis works - you can pretty much replicate any asset with a combination of most assets with a combination of Shares, Bonds and Money Market.

This implies that you can’t win much with gold - but you take on loads of idiosyncrotic risk related to it. Therefore, I even in my 3rd Pillar keep a very low exposure to Gold (2-4% max).


You realize that the Great financial crisis of 2008 and the great depression of 1920th were the only two occasion when the stocks market went down by more than 50%?

Here’s 5:

Biggest Stock Market Crashes in U.S. History (And How to Prepare).

Let’s not also forget non-US markets. Japan crash is pretty scary.

I’m not holding it right now but as with other asset classes, I’d try to keep the fringes liquid while trying to capture what I’m searching in the asset class with most of the investment.

I’d keep most of my investment in gold in physical gold, including a fraction in jewellry and other easier to pass by items and have some part in an ETF for purpose of rebalancing the global allocation.

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