Introducing the Generational Portfolio™

ComposedPro Wealth is offering a new portfolio to those who wish to invest for multiple generations. The Generational Portfolio™ is designed for a long time horizon with an undefined goal start date. Therefore, the allocation differs from our more traditional Retirement Portfolio because the allocation for The Generational Portfolio™ is static and does not become more conservative as a goal date approaches.

This Generational Portfolio™ has a similar allocation profile to endowment funds. As discussed later, for those who qualify, we recommend investing up to 25% in alternative assets, including private equity, private credit, real assets, and hedge funds. The goal of adding alternatives is to enhance returns while lowering risk (private equity), enhance after-tax returns by providing income tax benefits (hedge funds), and enhance the yields of the allocation to bonds (private credit).

This portfolio could be a good fit for you if you have accumulated more wealth than you intend to spend during your lifetime, and you wish to leave an inheritance for one or more generations down the line.

Let's take a look at how the portfolio would have hypothetically performed over the past 10 years, examine the portfolio's allocation, and make a case for each asset category in the allocation.

The Generational Portfolio™ Performance

This portfolio would have provided attractive return and risk characteristics over the past 10 years. A $100,000 investment made on 10/11/2015 would have grown to $388,612 as of 10/10/2025. That translates to an annual return of 14.7%, after management fees of 0.5%. The max drawdown would have been only 27.3% over the past 10 years.

The Generational Portfolio™ Allocation

The fixed allocation below is invested in 86% higher-risk investments and 14% lower-risk investments.

Justifying the Allocation

This allocation is ideal for a portfolio with diverse account types (taxable, tax-deferred, and tax-exempt), with each asset category strategically placed to maximize portfolio efficiency and increase the after-tax return.

According to Ray Dalio, the founder of the largest hedge fund firm Bridgewater Associates, there are four fundamental economic environments, or "seasons," that move asset prices:

• Rising economic growth (expansion or "bull market")

• Falling economic growth (recession or "bear market")

• Rising inflation (rising prices)

• Falling inflation (deflation)

We will identify the seasons in which each asset category tends to perform well in parentheticals and provide a rationale for its inclusion in the portfolio.

Cash and T-Bills (falling economic growth)

Since there is no need for distributions in the near term, we keep the allocation to cash and treasury bills at 0%.

Metals (rising inflation / falling economic growth)

Metals have very low correlations to equities and perform exceptionally well during periods of stagflation, when inflation is stubbornly high, economic growth is stagnant, and unemployment is rising. We may be entering into a stagflationary environment as of the writing of this article. During the last period of stagflation in the 1970s, the S&P 500 returned only +35.0% in total or +3.0% per year from 2/12/1970 through 2/11/1980. During the same time period, gold returned +1832.8% or +34.5% per year. That period did include a significant economic policy change known as the Nixon Shock, when the last ties to the gold standard were severed. The Nixon Shock had other economic measures that enhanced stagflationary pressures, and the price of gold soared.

Digital Assets (rising inflation / falling economic growth)

It is our view that Bitcoin, a digital asset, is essentially digital gold. Also having low correlations to equities, adding this asset category to the allocation enhances the portfolio. The strongest case for Bitcoin and other digital assets is increased adoption by Gen Z and Millennials as they accumulate wealth, start to inherit assets from older generations, and move a portion of their allocation to the digital asset category. These younger generations feel left behind due to economic issues such as high student debt, lower real wages, and difficulty finding stable employment, especially during economic downturns and shifts like the rise of remote work. This rising inequality is compounded by the perception that older generations benefited from policies that are now undermining younger generations' ability to build wealth. All of this translates to a search for alternative methods to build wealth, and has contributed to the rise of crypto.

Source: Crypto Adoption on the Rise, Driven by Europe, Younger Demographics. Fintech News Network. https://fintechnews.ch/blockchain_bitcoin/crypto-adoption-on-the-rise-driven-by-europe-younger-demographics/76796/. Accessed October 10, 2025.

Commodities (rising inflation)

We include a low allocation to commodities to lower the risk of the portfolio during times of rising inflation.

US Large Cap Equities (rising economic growth / falling inflation)

So long as we maintain economic policies to reward megacaps, this asset category justifies the largest allocation.

US Mid and Small Cap Equities (rising economic growth, falling inflation)

We reserve this allocation for private equity investments in smaller, growth-oriented companies for those investors who qualify. Private equity has the potential to enhance the return and lower the risk profile of the portfolio.

The visual below, created by JP Morgan Asset Management, shows that adding 5% to 15% of private equity to a portfolio not only increases returns but also decreases volatility.

Source: Burgiss, Factset, JPMorgan Asset Management.

Non-US Developed and Emerging Equities (rising economic growth, falling inflation)

These investments perform exceptionally well when the US dollar is weakening and economic outlooks abroad are improving comparatively to the US. As of the date of this article, this year Non-US Equities (+24.4% YTD) have more than doubled the return of US Equities (+12.0% YTD), as the US dollar has weakened by 8.9%.

US Mid-Term and Long-Term Government Bonds (falling economic growth)

Allocations to these categories reduce the risk of the portfolio, as these investments in perform exceptionally well during recessions. A higher allocation to long-term bonds over mid-term bonds is justified because the portfolio has a very long time horizon, intended to last for multiple generations.

US Municipal Bonds (falling economic growth)

Included to be strategically placed in taxable accounts, as the interest earned is exempt from federal income tax.

US Corporate Bonds (falling economic growth)

These investment-grade corporate bonds generally provide higher yields than government bonds and serve as safe-haven assets in times of economic uncertainty. Like the bonds mentioned above, the prices of these bonds will increase as the expectations about interest rates fall. For example, their prices do not necessarily improve when the Fed actually reduces its target rate. Instead, bond prices tend to rise beforehand when the market shifts its expectations to believe the Fed will reduce its target rate due to economic challenges.

US High-Yield Bonds (rising economic growth)

These are ideally placed in tax-advantaged accounts, as the interest income from their high yields (currently 6.6%) is then shielded from current income tax. This asset category can reduce the risk in the portfolio and still provide ample return when protected in a tax-advantaged account.

Non-US Developed and Emerging Bonds (falling economic growth)

Similar to the discussion in international vs domestic equities earlier, foreign bonds serve as a hedge against a worsening outlook for domestic markets and perform better as the US dollar weakens.

How to Invest for Generational Wealth

If you intend to pass on your wealth to multiple generations, this portfolio was built for you. Visit our contact page to schedule an in-person meeting or give a call. We also offer a wide range of services in addition to investment management, such as tax, estate, and financial planning. Our transparent pricing is unmatched, and you will be working directly with a CPA and CFP®.