I am advising my 27-yr old child to use the three-fund strategy with an allocation of 64% US equities, 16% Global ex-US, and 20% Bonds, to be de-risked with age.
My question is how to build the US equities portion at these lofty valuations. Historically, ten-year returns at these valuation levels fluctuate around zero. And, as a new investor, she has no tax basis to moderate the allocation decision.
Is there a received wisdom about whether to immediately provide a full allocation to US equities? Or, if not, the smartest way to build the allocation?