Looking to have 50% portfolio to CSPX while 25% of stock picking, remaining 25% in cash (as buffer to add more when there is market dip). But should I allocate also for REIT to diversify?

Hi, good question. i agree with thefrugalstudent that 25% cash buffer is alot. Especially if you already have sufficient emergency cash.

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Personally, this is how I would allocate:

45% - CSPX

25% - Stock picking

15% - REITs

0-15% - cash (depending on whether I can find anything to invest in)

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however, you should do what you are comfortable with. If you are interested, do check out my article on a three fund portfolio on my website at www.thedollarsapling.com. I think it is a good starting point to build the base of a satellite portfolio such as yours. Hope this helps!

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Hi,

IMO, 25% cash buffer is a lot. I get the ideal that you want to take as much advantage of a dip whenever possible, but if a dip doesn't come for the foreseeable future and the market rallies, you'll miss out on a lot of gains because 25% of your portfolio is uninvested.

If you don't wish to add positions to CSPX or your stocks, you can consider investing a portion of your cash buffer to REITs (10-15%?). REITs are a fine investment and are generally less volatile than stocks, so if a dip does come and you want to liquidate it to have more cash, I think it's a viable option to consider.

Personally, I'd rather strengthen my position in CSPX because the returns opportunity is better than REITs.

Hope this helps!

Regards,
thefrugalstudent