Assets Allocation

Here is my current allocation at the beginning of respective years:

	2013	2014	2015	2016	Aspired
Shares	15%	67%	51%	38%	10%
Index Funds	0%	0%	22%	30%	50%
Bonds	0%	0%	0%	20%	30%
Precious  metals	6%	4%	3%	3%	3%
Cash	79%	29%	24%	9%	7%
Total, USD K	230	304	273	281
Developed economy	0%	0%	16%	27%	50%
Emerging market	15%	67%	57%	61%	40%
Liquid assets	85%	33%	27%	12%	10%

I am moving in the desired direction and the plan is to keep investing mainly in index funds in developed economies and bond index, this is to balance it towards more stable but less delivering assets. I will also need to reduce my exposure to individual stocks, regardless how attractive they may look.  If I would have extra cash to invest, perhaps I could tolerate elevated risk levels more easily.

Thinking aloud:   I am from millennials, or more prosaic - generation rent. Graduate debt, poorer pension provision (if any) and a runaway housing market are making my financial present a struggle, let alone the financial future.  However, we are (aged between 18 and 35) are already the largest segment of the US workforce.

     It has been good 7 years, financially speaking. I tried to use extra income to actively squirreling the money away, but now it is back to the reality.

How do you recognize us, apart from age?

- Home ownership at an all-time low among this generation, we are a boon for buy-to-let landlords, typically flitting about and staying in one place for not more than a year.

- Own stuff? We can’t afford to. The income of the average 22- to 30-year-old remains stubbornly 8 per cent lower than it was in 2008, says the UK’s Institute for Fiscal Studies. This income dip is hitting the young the hardest — the income of the median UK household returned to pre-recession level last year (8 years later and new recession is coming fast).

- At best, millennials are likely to be paying 5 per cent of their salary into a pension pot with another 10 per cent contributed by their employer. Most of us paying nothing, as it not worth to feed bankers and wealth managers.

       Financial advisers and so-called wealth management is selling idea that there is era of lower returns punctuated by frequent volatility threatens to become the “new normal”, adding to the pressures to the clients. Of course, it does not affect fees for their services. These will only go up, although most of them could not outperform the index funds.  “In the past, we have seen equity returns at 8 per cent. It is likely to be a lot lower, at between 3 and 5 per cent. People have to be accustomed to that.”