Investment Portfolio Checkup

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Posts: 4
Joined: Tue Dec 21, 2010 10:01 pm

Investment Portfolio Checkup

Post by bballkking1 » Fri Dec 21, 2012 5:24 pm

Good Evening and Merry Christmas!

I've been a long time lurker but have left the advice giving to the professionals. I truly appreciate all the advice found here. I made my first post a few years ago for advice about where to begin. I knew I would buy and hold and check back in eventually. I'm back looking for any advice given the following IPS:

Age: 26, single
Annual Gross Income ~ $52,000 (Jan. 1, 2010 - Dec. 30, 2012)
TSP Account Balance ~ $16,000
Vanguard Roth Balance ~$16,5000
ING Cash Savings ~$5,0000 Debt $0
Currently renting with no major real assets

Financial Objectives:
Short Term (Next 10 years)
Marriage in ~3 years
Have $30,000 - $40,000 for house down payment in 5 years (20%)
Contribute $5,000 to Roth IRA Annually
Contribute to TSP an amount to equal any match
To minimize potential tax liabilities

Mid Term (Years 11-Age 65)
To gift $20,000 to each child on their wedding day
To minimize potential tax liabilities
Contribute to children's College Funds

65 - Death
To retire at the age of 65 and have 30 years of income
To have an annual income from my invsetments of at least $60,000 after taxes in today's dollars
To minimize potential tax liabilities

Investment Objectives:
"Buy-and-hold, long-term, all-market-index strategies, implemented at rock-bottom cost, are the surest of all routes to the accumulation of wealth" - John C. Bogle

Risk Tolerance:
My ability to tolerate the uncertainties, complexities and volatility inherent in the investment markets has been considered in the development of this investment program. The main factors that have influenced my risk tolerance and asset allocation are: age, present financial condition, specific financial goals, discretionary income and its variability, past investment experience. At a young age my current tolerance for risk is high.
StockAllocation ~ 85%
Bond Allocation ~ 15%

Investment Vehicles:
Vanguard - $5,000 yearly contribution to Roth IRA with .19% e.r. Currently ~ $16,500
TSP - 6% to ensure employer match with .025% e.r. Currently ~ $16,000
Cash Savings: Online Savings Account ( Currently ING) Currently ~ $5,000

Target Allocation & Asset Classes:
Vanguard Target Retirement 2050 (Already Taxed)
Total U.S. Stock Market Index Fund - 63%
Vanguard Total International Stock Market Index Fund - 27%
Vanguard Total Bond Market II - 10%

Thrift Savings Plan (Tax Deferred)
TSP Government Securities - 3.83%
TSP Fixed Income - 7.67%
TSP Common Stock - 43.4%
TSP Small Cap Stock - 18.7%
TSP International Stock - 26.4%

Gives a Current Allocation of:
U.S. Stocks - 62.5%
Int'l Stocks - 26.5%
Bonds - 11%

Selection Criteria:
Investment portfolios used to implement the investment program shall be subject to specified selection criteria and shall be monitored for adherence to my investment policy guidelines, major changes in the portfolios and comparative performance with similar investments. The expense ratio and overall cost of funds shall be a major point in the selection criteria. To minimize style drift, index funds are preferred, if available, for all asset class.

Monitoring and Control Procedures:
My investment performance will be monitored and reported on a quarterly basis and will be compared against the appropriate benchmarks. The investment program will be reviewed at least annually to make sure that it continues to achieve his stated objectives. Since this investment program is long-term in nature and the retirement accounts rebalance automatically, the periodic adjustments made to his investment program should be small. No market timing or investing based on current trends.

I appreciate any critique or advice about my investment portfolio and allocations at this point. I do plan to focus on my cash savings amount. It has been over $10,000 but a few emergencies have eaten away at it recently. With the house purchase on the 3-5 year horizon that will be a savings goal. I'd love to not take the $10,000 allowable from the Roth for the down payment.

Bob's not my name
Posts: 7347
Joined: Sun Nov 15, 2009 9:24 am

Re: Investment Portfolio Checkup

Post by Bob's not my name » Fri Dec 21, 2012 6:14 pm

bballkking1 wrote:To minimize potential tax liabilities
You are paying $250 of unnecessary state tax on your Roth IRA contribution every year. viewtopic.php?f=10&t=86262

Posts: 4
Joined: Tue Dec 21, 2010 10:01 pm

Re: Investment Portfolio Checkup

Post by bballkking1 » Mon Dec 24, 2012 2:43 pm

Thanks for the help!

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