Where had you Invested to earn such a good profit this year, as you have announced on other thread.
Good question. Let me be clear about the percentage of return because the amount masks the percentage return. My percentage return was 14.04% when S&P 500 return was about 30%, so I did not do well at all. The amount looks big because my portfolio value was large.
Now to your question, where did I invest? I mentioned this in the beginning of year 2013 (on this thread). I invested in gold and short term bonds. My investments in gold gave me losses but it was a strategic investment. I will continue to invest in short term bonds this year. I also invested in international bonds last year. When stocks raise, they are hardly worth buying because bonds and gold falls. I usually go after asset classes that are undervalued. This year, I will also buy real-estate stocks (REITs) because my percentage allocation on REIT is falling with increasing allocations in other asset classes.
My objective is to minimize risk and get consistent returns. As you can see, even a small percentage gives me huge returns. The problem with large portfolio is that a small drop will result in huge losses as well. So, it is the losses that I am trying to avoid.