I'm new to the forum. I've been reading about personal finance and investing since I started working when I was 15. I'm 27 now and have about 100k USD in a tax exempt retirement account. This will hopefully improve massively since I've started reading Early Retirement Extreme and Mr Money Mustache, and increased my savings rate. I have low-interest credit cards as a first line of defense for an emergency, and the account is a Roth, so withdrawing principal would be my 2nd option in a catastrophe. In 12 years I haven't had to do this, though, so I run without a cash emergency fund. No kids or anything to worry about.
I am looking to get more aggressive long term returns. I won't be touching this money for 32 years, so I would hope that the ups and downs will end up cancelling out. My current portfolio is:
14% S&P500 (SPY)
14% US MicroCap (IWC)
26% Foreign Developed (VEA)
19% Emerging Markets (VWO)
7% Frontier Markets (FM)
5% US Real Estate (VNQ)
5% Intl Real Estate (RWX)
2% US Total Bond Mkt (BND)
2% Emerging Mkt Govt Bonds (PCY)
2% TIPS (TIP)
2% Gold (GLD)
2% Commodities (DBC)
A couple thoughts I've had:
1. Vanguard just released an international RE fund with a slightly lower fee, VNQI. I am considering selling RWX and buying VNQI with the proceeds, but since it's only worth about $5000 right now, I don't know if it's very important at the moment.
2. Gold and commodities were probably poor choices for buy and hold investments. It was an experiment I engaged in maybe a year or two ago. DBC, especially, is known for contango issues, which I still don't fully understand, but I gather that it's not good.
3. I bought PCY thinking it was an international bond index, but it's really emerging market government bonds. I've thought about investing in some sort of international corporate debt fund as well, but now doesn't seem like a great time to buy fixed income. Speaking of which, I also wanted to add either HYG or JNK, but haven't for the same reasons.
4. Should I maybe change SPY to VTIP to capture the entire US equity market? Maybe I'll just buy VTIP going forward and leave the SPY there, too.
5. Frontier markets are my shiny new purchase. I know it's pretty risky, but that's what I'm looking for, plus the correlations with other equity markets are low. Would like to hear if putting 7% in this is wise.
6. I would really like to do this "tilting" you guys talk about. In the future I would like to add small cap value to my US, intl, and emerging markets allocations. For maximum risk and return, should I do a 50/50 split between blend and SCV?
I would really like to go full bore and reach an expected return of, say, 10% after inflation (so 13.4% nominal?). Volatility is not an issue, as long as the portfolio does not lose 100% of its value