Issue #14: Simple Portfolio Allocation for Upside and Protection
Portfolio allocation simplified for people who value their time
Reading time: 2 minutes
This is the question that haunted me for ages. You cannot believe how long I struggled with it.
But what I came to realize is that, as always—dammit—it depends. There’s no one rule.
Portfolio allocation is personal. It depends on your goals, your risk tolerance, and where you are in life. What works for someone else might not work for you, and that’s okay.
That said, here’s what I aim for right now at 27. I call it The Wealth Quadrant:
25% in Crypto: Split evenly between Bitcoin (12.5%) and everything else (12.5%).
25% in U.S. Stocks: Split evenly between $VOO (12.5%) and everything else (12.5%).
25% in Real Estate: If you don’t own a home, allocate this portion equally to crypto and stocks, making them 37.5% each (The Modified Wealth Quadrant).
25% in Cash: This includes your emergency fund and reserves for buying dips or seizing opportunities.
This, in my view, is a perfectly balanced portfolio—diversified, growth-focused, and equipped with a cushion for unexpected events or opportunities. It strikes the right balance between upside potential and safety.
Why Simplicity Wins
There are as many portfolio allocation strategies as there are analysts in the world. My goal is to simplify my approach as much as possible. I don’t want to track 200 indicators and companies every day or overcomplicate my life.
In Issue #2, I wrote about how concentration builds wealth. This is the continuation of that idea.
A portfolio with 2-3 crypto projects and 2-3 well-researched stocks requires minimal effort. Once you’ve done the research, it’s all about staying updated and checking if the thesis remains intact. Managing this takes less than 1 hour per week, making it perfect for lazy people like me.
For those who own a house, it’s likely your primary residence, which means managing it isn’t a huge hassle either.
Thank you so much for reading! I’ll catch you on Thursday!
Too heavily into crypto IMHO