True diversification means moving outside of the typical US Equities and US Bonds to other asset classes. A simple 5 asset class portfolio could consist of :
US Stocks (VTI)
Foreign Stocks (EFA)
US Bonds (AGG)
REITs (IYR)
Commodities (GSP)
An investor looking to add more asset classes could easily approach 15-20 worldwide betas. In this blog, starting Dec 31, 2006 I will track a number of World Beta Portfolios. They will include:
World Beta 5 Asset Class
World Beta 5 Asset Class Risk Parity
World Beta 5 Asset Class Portable Alpha (From the World Alpha ports)
World Beta 10 Asset Class
World Beta 20 Asset Class
World Beta 20 + World Alpha (50% in each)
