Author Topic: Help me balance my investments!  (Read 2414 times)

Jacob1234098

  • 5 O'Clock Shadow
  • *
  • Posts: 17
Help me balance my investments!
« on: December 06, 2013, 11:34:02 PM »
Ok,

I've been procrastinating, feeling like all investment classes are risky and not wanting to pull the trigger. But my savings account is now at $21,940 and I need to do something with it. Here's my current portfolio. I think I'm going to aim at a similar portfolio to the Vanguard Target Retirement 2055 fund, A. because I'm 27, and B. because I prefer more aggressive investing though I plan to retire way before 2055. With all investment classes being such poor options these days I feel I need to keep a good percentage in cash, 10%? No idea really how much.

           Current $   Current %
US stock   83209.54   0.612510416
US Bond   18268.64   0.134476555
Int stock   11996.66   0.088308134
Int Bond   435.16   0.003203239
Cash           21940   0.161501656
Total           135850   

Vanguard 2055 % + 10% in cash?:

US stock  63%
US Bond  08%
Int stock  27%
Int Bond  02%

I plan to slowly rebalance, not all at once, but maybe $500 every week until it's balanced.

Any suggestions on what I'm thinking, if it sounds like a good approach?



Cooperd0g

  • 5 O'Clock Shadow
  • *
  • Posts: 67
Re: Help me balance my investments!
« Reply #1 on: December 07, 2013, 08:58:18 AM »
I am a fan of the Vanguard Target Retirement funds. Personally, I'm not sure I see a benefit of slowly rebalancing other than making your investing situation more complicated. I think it would be better and simpler to just move everything at once into the TR2055. As for cash, I don't really keep much cash on hand. I think it depends a lot on your expense level, job security, and non-retirement investing accounts. If you have $30k or more invested, even if all in stocks, you'll have access to that in cash in a day if you need it. Better to have it work for you than just sit there.

engineerjourney

  • Bristles
  • ***
  • Posts: 269
  • Age: 31
Re: Help me balance my investments!
« Reply #2 on: December 07, 2013, 09:14:07 PM »
Where are your investments?  Roths, 401K, taxable?  Just keep in mind making them tax efficient, like don't put bonds in the taxable account. (only some exceptions to this). 

RobertBirnie

  • 5 O'Clock Shadow
  • *
  • Posts: 77
  • Age: 32
  • Location: San Jose, CA
Re: Help me balance my investments!
« Reply #3 on: December 09, 2013, 10:24:09 AM »
Check out this book:
Random Walk Down Wall Street http://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393340740/

Also if you are looking for something a little more hands on than a target retirement account; Wealthfront has a great asset allocator. Go through the couple questions at the start and it'll give you the ETFs they recommend for your risk tolerances, try adjusting the risk profile and see what they recommend. The recommendations are based on the target portfolio from RandomWalk. I have money with WealthFront, but you could just as easily take their recommendations and mimic them in your portfolio ( I do this for my wife in her Vanguard account).

http://wlth.fr/1gjSiL6

daverobev

  • Magnum Stache
  • ******
  • Posts: 3288
  • Location: UK
Re: Help me balance my investments!
« Reply #4 on: December 09, 2013, 12:30:47 PM »
Cash AND bonds? Cash will always be a losing proposition. Timing the market is usually a bad plan.

Why not a simple 50% domestic stock, 25% intl stock, 25% bonds split?

prestojx

  • 5 O'Clock Shadow
  • *
  • Posts: 67
  • Location: Boulder, CO
Re: Help me balance my investments!
« Reply #5 on: December 10, 2013, 01:37:32 PM »
Ok,

I've been procrastinating, feeling like all investment classes are risky and not wanting to pull the trigger.

This is the problem with not having a well thought out, written Investment Plan. Without an investment plan, it is tempting to believe one can control the uncontrollable. The most successful investors make a plan and stick to it year in and year out, rebalancing no matter what one thinks about the markets or what the experts are saying.

It has been shown time and time again that even professionals with staffs of PHD mathematicians, managing huge portfolios (and making big money doing so), do no better than average trying to out-think the market with timing, picking stocks, etc. etc. etc.

So constantly changing ones plan is absolutely wasted effort and will most likely result in much more risk and much lower returns.

Consistency is boring but it the only real secret to investing. Most people make bad investors because they don't have the temperament to make a plan and stick to it - no matter what.