Let’s assume that I want the following portfolio allocation:

  • 40% Bond Index
  • 30% U.S. Stock Index
  • 30% International Stock Index

I’m 40 years old and I don’t have a pension coming.

Let’s also assume that I had this allocation 3 months ago, and that I’m ready to make a new deposit with fresh money. 

In other words, when I checked my account three months ago, 40% of my money was represented by my bond index, 30% was represented by my U.S. stock index and 30% was represented by my international stock index.

But things have changed in the past three months.  Stock markets have moved.

Here’s a three month performance chart representing each of the above indexes. 

  • The blue line is the Canadian short term bond index
  • The red line is the S&P 500 U.S. index
  • The green line is the first world international index

If I was going to add fresh money to my account today, which index would I buy, and why?