Portfolio Allocation

One of the most neglected topics on the personal finance blogsphere is asset allocation, and if you believe modern portfolio theory asset allocation this could be one of the most important determinates in portfolio performance. So today I'd thought I'd share with you my personal portfolio allocation. My goals are simply to own most major asset class, be diversified internationally as well as across market caps, and have the traditional 60/40 balanced portfolio split between stocks and bonds. It is designed to help weather downturns in the market, currency risk, country risk and individual security risk, and emphasizes value, small cap, and emerging markets, areas that have historically over long periods of time outperformed the total market.

Fund Name	Symbol	Asset Class	Target
Vanguard Total Stock Market	VTI	LCB	6.75%
Vanguard Value VIPERs	VTV	LCV	6.75%
Vanguard Small-Cap	VB	SCB	6.75%
Vanguard Small Cap Value VIPERs	VBR	SCV	6.75%
Vanguard REIT Index ETF	VNQ	REIT	3.00%
Vanguard FTSE All-World ex-US	EUV	INT'L LCB	5.40%
iShares MSCI EAFE Value Index	EFV	INT'L LCV	5.40%
Vanguard FTSE All-World ex-US Small-Cap Index	VSS	INT'L SCB	5.40%
WisdomTree Int'l Small Cap Div Fund	DLS	INT'L SCV	5.40%
Vanguard Emerging Markets Fund	VWO	EM	5.40%
iShares S&P World ex-US Property Index	WPS	INT'L REIT	3.00%
Vanguard Intermediate Bond Market ETF	BIV	INTER BOND	10.00%
Vanguard Short-Term Bond Market ETF	BSV	SHORT-TERM BOND	5.00%
Nuveen Select Tax Free Fund	NXQ	MUNI BOND	10.00%
iShares S&P/Citi Intl Treasury Bond	IGOV	INT'L BOND	10.00%
SPDR Barclays Cap S/T Intl Treasury Bond	BWZ	INT'L BOND	5.00%

Is it perfect? I don't think anything is perfect when it comes to investing. But it is something I where can sleep at night and provides returns that are competitive. The shortcomings are that I wish I could find a more broadly diversified international small cap value ETF, and I wish there were more broadly diversified international bond offerings available. As the financial marketplace changes, I'll keep searching for new offerings that better fit my needs and will adjust the portfolio accordingly. Do I have any investments outside of this portfolio? A few... primarily a small position in a commodities ETN that I don't consider a core holding, and some physical gold as a hedge against worse case scenarios.