December 31, 2020

Beginning on January 1, 2021, we’ll be making a couple of changes. We will include Emerging Markets, US small-cap stocks, and the broad Commodity Index. We will substantially reduce allocation to US Treasuries. Here’s what things will look like starting the year.

Asset ClassAllocationYTD 2020
S&P 500 Stocks20.65%16.02%
US Russell 2000 Stocks17.70%30.76%
Emerging Market Stocks22.11%14.89%
Gold22.18%24.65%
Commodity Index7.91%-7.96%
US Treasuries9.45%16.36%
Cash0.00%
Total100.00%
Beginning 2021 Conservative Model Allocations

I’m making these changes for now because of the increased risk of inflation and the likely continuation of the dollar’s decline. In 2020, Small-Cap stocks were the top-performing asset class, followed by Gold and US Treasuries. At one point, the S&P-500 was down about 35%. Yikes!

I will continue doing research on ways to manage risk for our conservative clients so that we can continually adapt to the changing markets.

Please be safe out there and have a blessed 2021.

Dale Beals