Grove O'Rourke on Asset Allocation

Grove O'Rourke here. I'm the fictional hero of Top Producer, which is getting great reviews in the press. Norb and I are flying to Atlanta, right now, so this post comes from 30,000 feet above sea level thanks to a new service called "Go Go."

How cool is that?

There's an insert in USA Today that says 78 percent of those surveyed are confident their "asset allocation is the right one at this time." I wonder what process investors used to deploy their assets.

Did they invest based on their cash flow needs? Or did they listen to financial advisers talk about standard deviations, Monte Carlo simulations, and the other inscrutable trademarks of Wall Street's asset allocation process?

I believe it's important to identify cash flow needs first: tuition, house improvements, or even capital calls. Then, invest safely through fixed income instruments to fund those requirements. Any cash that remains can be invested in risk assets like equities. And there's nothing fictional about my advice.

Have a great week.

Grove O'Rourke