Help With Inheritance

[wolfgango]

I'm a new member here but have been reading and following the forum for the past month. I recently inherited a sizable sum of money and would like to invest according to the PP allocations. My inheritance includes the following:

Trust Fund
33% stocks
33% bonds

Non Trust
33% cash

I cannot directly make changes to the trust fund other than to adjust stock/bond % allocation.

The bond portion of the trust recently moved from Treasury to corporate bonds to achieve a higher yield.

I've been struggling with whether I should invest the cash portion alone according to the PP allocation or to treat all of this as a whole and try to get as close as possible by dividing the cash into half gold and half cash.

Any suggestion or comments on this?

Thanks

[KevinW]

With only 33% of the portfolio available for cash and gold, there's no way for you to rebalance to 4x25.  So you'll have to make some kind of compromise.

Idea 1: replace the 25% cash and 25% long term bond allocations with a single 50% intermediate bond allocation.  This is under the assumption that the trust fund "bonds" are intermediate-term.  So you'd have:

trust:
50% IT bonds
16% stock

non-trust:
9% stock
25% gold

Idea 2: run the trust as a conservative 33/66 portfolio and the non-trust as a separate 4x25 PP:

trust:
22% stock
44% IT bond

non-trust:
8.25% each stock, LT bond, cash, gold

Of these, I prefer idea 1 because I think it'd be safer.

[AdamA]

The bond portion of the trust recently moved from Treasury to corporate bonds to achieve a higher yield.

Can you change it back?

[AdamA]

I've been struggling with whether I should invest the cash portion alone according to the PP allocation or to treat all of this as a whole and try to get as close as possible by dividing the cash into half gold and half cash.

If you have limited control over the trust, maybe you could go 50/50 stocks/bonds for that portion. 

With the nontrust 33%, I would buy 16.5% 10 year US treasuries and 16.5% gold, and add to these positions over time.

I think as long you hold some hard assets and some government bonds, you will be way ahead of most people, and your portfolio will do fine.