stock price ranges will remain low until corporate earnings improve and layoffs slow down. He believes the real story for investors lays in preferred allocations, which have higher yields that can compensate for lower money market rates (some below 2%). An average blue chip preferred is yielding 6%-7%. With some work you can find 8%-9% yields.
Bryant believes the Federal Reserve may lower interest rates one more time, bringing them close to zero. From there, rates will only go up which will limit bond price appreciation and make yields less attractive. “I would look to a good corporate bond fund as the economy rebounds,” says Bryant. “The bond selection [in a portfolio] should be split 50/50, treasury bonds and corporate bonds.”
|
Age: 35 and younger Designed for: investors new to the market, younger with longer time horizon. Primary objective is wealth accumulation. |
||
|
ASSET |
RANGE |
BRYANT’S |
| Stocks |
60%-80% |
65% |
| Bonds |
10-20 |
10 |
| REITS |
5-15 |
10 |
| Preferreds |
0-10 |
10 |
| Cash |
0-10 |
5 |
| Here we use nonstock investments as a cushion. Bonds shouldn’t be viewed as a disadvantage to a portfolio because bonds beat stocks for the second year in a row. REITS also had a good two-year run. New money should go into stocks. | ||
|
Age: 36 to 50 Designed for: investors who have been in the market forsome time, middle-aged. Primary objective is growt with some caution. |
||
|
ASSET |
RANGE |
BRYANT’S |
| Stocks |
50%-70% |
55% |
| Bonds |
10-25 |
15 |
| REITS |
10-20 |
10 |
| Preferreds |
5-15 |
15 |
| Cash |
10-20 |
5 |
| Here we still look for growth, but increased exposure to bonds and preferreds allows seasoned investors to sleep at night and avoid portfolio disasters. | ||
|
Age: 50 and Above Designed for: older investors preparing for retirement — assumes investor has saved at least 70% of retirement objective. |
||
|
ASSET |
RANGE |
BRYANT’S |
| Stocks |
30%-60% |
40% |
| Bonds |
20-30 |
25 |
| REITS |
10-25 |
15 |
| Preferreds |
10-25 |
20 |
| Cash |
10-30 |
5 |
| Here stocks play a less important role than securitieswith a yield; allows investors to view their portfolioas a source of living expenses. | ||
Source: Dale Bryant, portfolio manager for The Bryant Group, www.bryantgroup.com
