This is the third in an occasional series inspired by a toy at CNNMoney. Previous installments covered how big your housing payment should be and emergency funds.
Today’s topic is asset allocation, which in the dumbed-down context of the CNNMoney "tool" means the 
percentage of your savings to put in stocks. If you type in that your age is 45 and that you’ve got half your kitty in the stock market, you get a big red flag and a warning. But maybe not the warning you were expecting.
Uh-oh… Looks like your portfolio is invested too conservatively. Stocks can provide good growth, but pose plenty of risks in the short-term. Bonds offer more stability. If you’re saving for retirement and want a quick idea of what percentage of your portfolio should be in stocks, subtract your age from 120.
So at 45 the right answer is 75% in the stock market. In fact, from experimenting with it a little I find that for a 45 year-old anything between 65% and 84.9999% gets the "Good Work" pat on the back.
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It’s time for another visit to the world of survey results. As I wrote when I last visited, poll numbers are not my favorite kind of numbers, but they are way better than no numbers at all. Particularly on economic issues, poll numbers are less informative than how people and companies actually spend money,
but they are way more useful than mere words put out by people like me. (Note I said "like me" not "me". My analysis is always first-rate.)
If you know the world through words from the media, some of the numbers the pollsters find may be jarring. For example, Gallup recently found that 45% of Americans think there is too much government regulation of business and industry and only 24% think there is too little. That’s a fairly wide margin in favor of less regulation, but what may be truly surprising is that in the past year that plurality has widened. In September 2008, just before it all hit the fan, too much beat too little by 38%-27%. In fact, 45% is the highest number in at least a decade.
You might have thought, and I will admit to having thought this, that the Great Recession had won over enough converts to the unbridled-capitalism-is-bad camp that there was now a broad consensus that we needed more regulation, with only the details of what and where to be worked out. Turns out the opposite is true. The GR seems to have, miraculously, won over more people to the less-government-is-better-government side. Go figure.
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Slate’s The Big Money had an amusing post the other day about some fake Treasury Bonds that were seized earlier this year. The post is mostly about the implausible conspiracy theories that were subsequently hatched, but 
what’s interesting to me is the implausible nature of the fake bonds themselves.
In two separate incidents, Italian authorities confiscated stacks of bonds with a total face value of $250 billion. A collection of US debt that large is itself pretty unlikely, but what really pushed it over the frontier of believability was the fact that these stacks weren’t all that tall. Denominations for single bonds, that is, single certificates, went as high as $1 billion.
To understand just how far beyond the realm of reasonable this is, you need to know that a) the government stopped printing paper certificates in 1986 and b) in the days in which it did print certificates the highest denomination was $100,000. The total amount of authentic paper bonds still in circulation is $105 million. That’s million with an M.
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Another last Tuesday, another positive report on the S&P Case-Shiller Home Price Index. The 20-city composite was up 1.2% in August, putting it 4.85% above its April low. That’s a long long way from the heights of 2006 (it’s now 29% 
below the July 2006 peak) but it’s increasingly looking like this is not just a blip in the data.
17 of the 20 cities recorded gains. Charlotte, Cleveland, and Las Vegas were the only unfortunates. Charlotte and Cleveland don’t have much to worry about, they were both up more in July than they were down in August, and overall they saw relatively modest declines in the bust.
Vegas, on the other hand, can’t seem to snap its losing streak. This makes three solid years of down months. The only consolation seems to be that Sin City was down only 0.3% in August, breaking up two years of monthly losses greater than 1%. It’s now down 55% from the peak. Yikes.
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Musings | Frank Curmudgeon | 
November 3, 2009 3:40 pm | 
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