The Malkiel Portfolio

I took introductory macroeconomics from Burt Malkiel at Princeton (in 1977, just after he returned from a stint at the Council of Economic Advisers) and learned my early lessons in finance from reading his book, A Random Walk Down Wall Street. So I was interested in reading about his latest portfolio recommendations:

• 20% Vanguard Total Stock Market ETF (VTI) (Tracks a broad index of U.S. companies)
• 20% Vanguard FTSE All-World ex-US ETF (VEU) (Tracks a broad index of stocks from developed and emerging foreign markets.)
• 20% Vanguard Total Bond Market ETF (BND) (Tracks a broad index of high-quality U.S. bonds)
• 10% Vanguard Capital Opportunity (VHCOX) (An actively managed fund that likes big growth companies down on their luck)
• 10% Vanguard Emerging Markets ETF (VWO) (Tracks an index of stocks developing nations)
• 10% Templeton Dragon (TDF) (Invests in stocks from China and nearby nations)
• 10% Matthew's India (MINDX) (Invests in stocks from India)

Compared to what I expected, Burt has more in equities in general and more in emerging markets in particular. (Emerging markets include the last three holdings on his list, plus a bit of the second, making up about a third of the total portfolio). To my surprise, he lists no specific allocation to real estate securities such as REITS or to inflation-protected bonds.