Do you have an asset allocation of your wealth?

Do you have an asset allocation of your wealth?

It’s a stupid question but it really can make the difference

Why this point underrated will allow you to better manage your assets.


Photo copyright: David.

Some will say nothing… others will say “Yes, but which one are you talking about? “

‘From my allowance currentfrom my allowance objective or my ideal endowment ?? “

Asset allocation kesako?

To put it simply, this is it division of your assets from asset class.

Generally reserved for investors, this allocation can also serve everyone.

It is really interesting to know the share of your assets in this or that asset class.

The target allocation is also a good goal which must be kept an eye on to move forward.

5 main types of business

We thus distinguish several large families that we can then review in smaller ones.

In this article we will remain “classic” by taking only what is generally done.

So let’s find out these 5 main asset class families:

  1. Real estate: main residence, secondary residence, rent, SCPI …
  2. Bonds: AV euro funds, shares of AV bonds, direct bonds, bond UCITS
  3. Equities: direct shares and also some derivative products, UCITS shares, UC shares of AV
  4. Monetary: monetary SICAV, passbook, current account, cash
  5. Other: gold, wine, forest, art and exotic investments …

Normally enough easy to classify the different parts of yours inheritance.

But there are some exceptions that confirm the rule we just saw …

For example how to classify a property listed ? In action or in real estate?

Recall that a listed real estate company is a company that owns real estate.

But it is listed on the stock exchange and to own a part of it you have to buy it Actions.

Its price is therefore strongly correlated to the value of the properties but remains influenced by the stock market.

This type of asset, by choice to make, is usually classified in real estate.

Distribution at all levels

It should be noted that the asset allocation can also be used in a broader sense.

Taking into account, for example, geographic, risk and availability criteria.

We can also talk about it at different levels such as the scale global or in a AV or a PEA.

Today we will focus on asset allocation as a whole.

A tailor-made distribution

The best asset allocation is the one for you.


Photo copyright: Mesut Sahin.

Good foundations

For this, it is necessary to take them into account different criteria some of which will change and some will not.

For example, your age, your risk aversion, your situation and your financial goals.

So it’s not uncommon to have a different asset allocation depending on the weather.

And this for both the current allocation and the target allocation.

With a small apartment for the second because it can remain almost fixed if it is well done.

It is therefore in your best interest to define a good target allocation from the beginning.

So you will only have to make changes over time but not big changes.

Your current situation

First of all, I suggest you take some time make the point.

For this you have to inventory all your current resources.

A sheet of paper or a computer spreadsheet will do just fine.

Draw a table with the following three columns: Asset, Amount, Type.

Then complete this table by doing the necessary research.

You can then calculate easily the weight of each type of resource in your resources.

If you used a IT tool it will all be very easy.

In the event of a mistake or when your assets evolve, changes will be quick.

In addition, the computer will help you do the necessary calculations and percentages.

Without forgetting that it can then give you a nice gift distribution chart.

This last point is important because it allows you to immediately visualize your situation.

So if your legacy is too unbalanced you realize very clearly.

This will allow you to act accordingly to make the necessary decisions.

A strategy to be built for the future

Now you have to define where you want to go.

Plot the path

For this you will have to determine yours target asset allocation.

She must be coherent with respect to your risk aversion and your financial goals.

Perhaps you’d rather secure a real estate annuity for your retirement.

Or invest in stocks of solid companies with growing dividends.

This distribution it just depends on you and what do you want to do.

The French generally have a larger share of real estate than the rest.

A good idea of diversification it is fighting for a balance between action and immovability.

Or to have a more or less marked mix between the different types of assets.

There is no better distribution than another or a miracle formula.

In fact, everyone will address this topic with their own experience, needs, desires and knowledge.

You just have to be careful to keep on reasonable proportion and not unbalanced.

There is no more…

Thanks to your current situation and your wishes for the future, you will to be able to move forward.

Preparing a strategy which will allow you to move from one situation to another.

Since each situation is unique, the method to be used will also be unique.

For example, it will take relieve certain types of assets overrepresented to buy more.

Or invest only in those that bring you closer to the target allocation.

For greater efficiency you will need to follow the evolution of your asset allocation.

There is no need to do this every month, an annual report will be more than enough.

If you realize that your strategy is not the right one, act quickly.

It is better to make changes without losing too many feathers than opening your eyes too late.

Likewise, if your strategy isn’t complete enough, don’t hesitate to make the necessary additions.

The case of the main residence

What place should it occupy in your asset allocation?


Photo copyright: Jon Scally.

An eternal question

I open a debate that animates many exchanges everyday !

And to which I will return in more detail in a future article 🙂

And this: ” Is primary residence an asset or a liability?“.

We could also expand Main residence both active and passive?“.

Since this is not the topic, I recommend it alternative solution”.

What interests us today is to map your assets.

So we’ll kick him and pretend he is active.

And so we won’t waste time procrastinating in an endless debate 😉

Another quick question …

Well ok the main residence is an advantage but there is another question!

Should it be included in the asset allocation or not?“.

As you can see, this question is important for the following.

Well there it is two schools of thought like the previous topic …

And as for the other question, we could debate for hours and hours.

I confess that I have not taken a stand for one or the other but it does not matter.

We will take both possibilities so we won’t be jealous! 🙂

Especially since I find it very nice to know the general distribution of our assets.

And that I like to have a vision of the “productive assets” that bring money.

With these two allowances you will then have a clear perception of what you have.

It’s yours !

So you know what you need to do …

3 asset allocations and not one less, attention I look at you 😉!

I know I’m tough in business, but you’ll see It is really worth it.

Oh no, I was told in the earpiece that I was wrong …

They are not 3 beautiful graphics that you will have to do but 4 divisions !

And yes, you may have a primary residence in the future …

If you don’t have one at the moment, see how much a suitable property for you costs.

Then add its amount into the target allocation as if its price is not moving.

If you already have one, we also assume that its price remains fixed.

It’s not quite right but it will allow you to have a idea of ​​greatness.

Especially at a time when prices are treading on or even falling and we can’t project ourselves.

So take a few minutes to make your four allowances:

  1. The current one without your primary residence
  2. The current one with your main residence
  3. The goal without your primary residence
  4. The target with your primary residence

When you are done take time to compare them.

So dwell longer on breakdowns number 2 and number 4.

Only to resume the path you still have to do 🙂

You will then be ready to change yourresources in the right direction.

Using the investment strategy you defined above.

And have you ever done an asset allocation?

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