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Portfolio > Portfolio Construction

Behind the Numbers, with Liz Ann Sonders

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Charles Schwab & Co.’s Chief investment strategist, who debuts on our asset allocation panel this month, explains that her suggested allocation is designed for a moderate-growth portfolio, and is overweight in both U.S. and emerging-market equities. “I think emerging markets probably will outperform the U.S. equity market this year, but that doesn’t mean you want to put all your money there. We’re underweight in bonds to the equivalent degree that we’re overweight in stocks.” So in this portfolio, cash is basically neutral, although a rise in interest rates and inflation would cause her to reduce equity exposure in favor of cash rather than bonds.–Robert F. Keane