Ron, you hit it: Allocation is the name of the game in investing. It means a bit here, a bit there and a it over there. But what "bits?" If you consult your Wall Street broker, you'll be allocated to what he can sell -- stocks, bonds and some (limited) mutual funds -- usually his firm's own. Most brokers can't sell you Vanguard funds.

The sad part is there are few "brokers" selling anything else -- like real estate syndications. To find them, you have to scrounge. And when you do find them, their story is often the same -- serious success on Wall Street, ultimate annoyance at its tactics and lack of ethics, and then a search for an investment vehicle for themselves that offers more stability and less risk than common stocks.

Typically the "investment vehicle" they find is real estate. These people become experts and do well. Ultimately their friends ask "Can I get in?" Quickly they become a sort of broker, with one major important caveat. They typically put their own money into the deals they like and recommend to investors like me. I promised a little while back I'd write more on these people. I haven't forgotten. (I've been busy.)

As to commercial versus residential real estate? Frankly, it depends on the deal. And since all real estate is location-specific, it depends on the location. I know nothing about Naples, Florida, except people are moving there and prices have risen. Does Naples residential or commercial make sense? Research, research and yet more research is the answer. You may find more joy in Naples commercial since residential has hit the headlines so much. But that's a guess, pure and simple.

I'm reluctant to publish my present "allocation" since I'm rebalancing. This is what I published in September 16, 2004's column.

Since then, I've had two cash payouts -- one in one LBO and one in one private equity fund. I've put a little more money into my favorite hedge fund, which was up 20% in 2004 and I've put more into secured real estate loans -- all in California and all secured against trust deeds -- the equivalent of mortgages in the rest of the country. The biggest part of my assets remains in cash or cash equivalents.

A friend's allocation: A longtime friend and grad school classmate, likes (and has had much success with) Vanguard Total Market Index fund, Harbor International, Vanguard European Index fund, T Rowe Price Emerging Market, Pimco Total Return (Bill Gross bond fund), Euro Pacific Growth FD.

For more on allocation, read Friday's column. I'm following my Friday's advice -- reading and studying. No hurried conclusions, yet.

Helpful wife
A police officer pulls over a speeding car. The officer says, I clocked you at 80 miles per hour, sir.
"The driver says, "Gee, officer I had it on cruise control at 60, perhaps your radar gun needs calibrating."
Not looking up from her knitting the wife says: "Now don't be silly dear, you now that this car doesn't have cruise control."
As the officer writes out the ticket, the driver looks over at his wife and growls, "Can't you please keep your mouth shut for once?
"The wife smiles demurely and says, "You should be thankful your radar detector went off when it did."
As the officer makes out the second ticket for the illegal radar detector unit, the man glowers at his wife and says through clenched teeth, "Darn it, woman, can't you keep your mouth shut?"
The officer frowns and says, "And I notice that you're not wearing your seat belt, sir. That's an automatic $75 fine."
The driver says, "Yeah, well, you see officer, I had it on, but took it off when you pulled me over so that I could get my license out of my back pocket."
The wife says, "Now, dear, you know very well that you didn't have your seat belt on. You never wear your seat belt when you're driving."
And as the police officer is writing out the third ticket the driver turns to his wife and barks, "WHY DON'T YOU PLEASE SHUT UP??"
The officer looks over at the woman and asks, "Does your husband always talk to you this way, Ma'am?"
"Only when he's been drinking."

Harry Newton

This column is about my personal search for the perfect investment. I don't give investment advice. For that you have to be registered with regulatory authorities, which I am not. I am a reporter and an investor. I make my daily column -- Monday through Friday -- freely available for three reasons:
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