Author Topic: Need Advise  (Read 787 times)

OneCoolCat

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Need Advise
« on: July 31, 2016, 02:47:20 PM »
I'm fortunate to be in new territory financially where I have surplus money each pay period and am looking for advice of how to best invest it.  I'm already maxing my HSA, IRA & 401k and all investments are in index funds.  I'm 100% in index funds for US equities.

I know I want to put it into a Vanguard brokerage account but i'm not sure of what is best to put into a taxable account.  If I recall correctly, bonds should go in the tax preferred accounts and equities should go in the taxable accounts.  So if the consensus is that I need bonds then I suppose I would do that by converting some of the tax preferred index funds into bonds and buying index funds for the brokerage account.  I'm 29 and my goal is to be FI by 45 in case that helps assess what my allocation should be.

I have 10% of my portfolio sitting in a Vanguard money market account, and its growing by about 1.5% every other week.  How should i invest it?  Should I wait for another correction?
« Last Edit: July 31, 2016, 02:50:50 PM by OneCoolCat »

Goldielocks

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Re: Need Advise
« Reply #1 on: August 01, 2016, 01:51:53 AM »
What are your trading fees?  If low (e.g., zero), then no need to wait for a dip.   Just start putting in money monthly, over the next 6-12 months, until it is all in.  If a big dip happens, top up with a lump sum, but not everything.  Decide now what you think a big dip will look like.

Others will suggest a balanced mix of funds, but you should not need more than 3 index funds, to keep it simple.

Your choice on bonds, but I tend to be more aggressive with money I don't intend to draw upon for at least 10 years, especially while I am still working and can make back any severe losses with simple life choices while I am younger.  Again, this is true if the only bad thing that will happen to you if 50% of your money was suddenly lost, is that you have to work until you are 50 instead of 44.

nereo

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Re: Need Advise
« Reply #2 on: August 01, 2016, 06:00:49 AM »
There is no consensus on what your asset allocation (AA) "should" be.  That's one of the most individuals questions for an investor, and only you can decide how you want to invest.  Questions like: "how much do market dips effect you? What is your risk profile? What is your timeline for accessing these funds? How much do you want invested in domestic and developed countries vs developing countries? What are your monthly expenses and how would you meet a large emergency? ..."

First and foremost - do you have an Investor Policy Statement?  If not - make one... then do what it says whenever this question comes up.