150k to invest. Portfolio advice.
150k to invest. Portfolio advice.
So much great info on this site, thought it was time to ask for my own.
I have roughly 150k to invest which has just been sitting in a savings account.
I currently only have a SEP IRA with the following AA:
500 Index VFIAX 20%
Small Cap Index Fund VSMAX 15%
Total International Stock Index VTIAX 30%
Total Bond Market VBTLX 20%
So, I can max out my 2012 SEP contribution of 50k, and can fully fund my SEP for 2013 of 51k? Then the remaining into a taxable account?
What would you recommend for taxable? Additional VFIAX & VTIAX but keeping my total combined around my target AA? I will be adding about $3000/month to this account assuming I have maxed out my IRA.
Currently in the 35% tax bracket, so maybe convert something from my SEP to a Roth IRA?
Any advice on my choice of funds? Add some REITs?
I am 35, single, no plans of any large purchases in the near future (home, etc.).
I have roughly 150k to invest which has just been sitting in a savings account.
I currently only have a SEP IRA with the following AA:
500 Index VFIAX 20%
Small Cap Index Fund VSMAX 15%
Total International Stock Index VTIAX 30%
Total Bond Market VBTLX 20%
So, I can max out my 2012 SEP contribution of 50k, and can fully fund my SEP for 2013 of 51k? Then the remaining into a taxable account?
What would you recommend for taxable? Additional VFIAX & VTIAX but keeping my total combined around my target AA? I will be adding about $3000/month to this account assuming I have maxed out my IRA.
Currently in the 35% tax bracket, so maybe convert something from my SEP to a Roth IRA?
Any advice on my choice of funds? Add some REITs?
I am 35, single, no plans of any large purchases in the near future (home, etc.).
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Re: 150k to invest. Portfolio advice.
If you're self employed, consider switching from SEP-IRA to Solo 401k. This will make it easier for you to use the backdoor into Roth IRA and get a little more tax advantaged space (5.5K) every year. Having lots of pre-tax assets in SEP-IRA complicates the Roth conversion step of the backdoor into Roth IRA. Fidelity has a very nice Self Employed 401(k) plan that allows for incoming rollovers from IRAs.
You're in a very high tax bracket so tax efficiency is an important consideration.
Wiki article link: Principles of Tax-Efficient Fund Placement
If you hold Total International in the taxable account, you'd get the Foreign Tax Credit. Total Stock Market VTSAX is very tax efficient and would also be appropriate for a taxable account. If you want to hold some bonds in the taxable account look at Vanguard Intermediate Term Tax Exempt (VWIUX).
You're in a very high tax bracket so tax efficiency is an important consideration.
Wiki article link: Principles of Tax-Efficient Fund Placement
If you hold Total International in the taxable account, you'd get the Foreign Tax Credit. Total Stock Market VTSAX is very tax efficient and would also be appropriate for a taxable account. If you want to hold some bonds in the taxable account look at Vanguard Intermediate Term Tax Exempt (VWIUX).
Re: 150k to invest. Portfolio advice.
Its none of my business but owning a home is better than not, if you have the ability to spend 3k every month on investing you should take advantage of the current low interest rate environment and get a home in case things go south it would be great to have a place to live. Especially because the Fed just said they may stop their current policy at the end of 2013 or before which means interest rates will rise, a home is better than cash any day.
Now that is out of the way I think you have a pretty good allocation, although foreign mutual funds can be tricky due to so many markets pulling the fund in different directions. Domestic funds are easier to monitor progress on. [Commercial website promotion removed by admin LadyGeek]
What is your investment objective? Do you want to appreciate capital or make income?
As for SEP you should max those out, and since you are contributing 3k per month I would assume you wouldnt qualify for a Roth (under 127k income), so the previous posts suggestion on the backdoor is a good way to enter that arena. Since 2010 there has been no income limit on backdoor contributions also no time limit for holding in the 401k so you can do it right away up up to the limit (5500, 2013) (5000,2012).
Now that is out of the way I think you have a pretty good allocation, although foreign mutual funds can be tricky due to so many markets pulling the fund in different directions. Domestic funds are easier to monitor progress on. [Commercial website promotion removed by admin LadyGeek]
What is your investment objective? Do you want to appreciate capital or make income?
As for SEP you should max those out, and since you are contributing 3k per month I would assume you wouldnt qualify for a Roth (under 127k income), so the previous posts suggestion on the backdoor is a good way to enter that arena. Since 2010 there has been no income limit on backdoor contributions also no time limit for holding in the 401k so you can do it right away up up to the limit (5500, 2013) (5000,2012).
Re: 150k to invest. Portfolio advice.
I'm pretty sure most people here would not advocate such an attempt at market timing.illcrx wrote:[Commercial website promotion removed by admin LadyGeek]
Edit: Forgetting about market timing in general, even the "[Commercial website removed by admin LadyGeek]"'s website is rife with typos... "If you do not have a retirement account and no nothing about any of this it will be confusing"
Re: 150k to invest. Portfolio advice.
Whats wrong with market timing, it can yield great results. So are you telling me you sat through 2008-2009?
Also if you know nothing about investing, an different concept like market timing a retirement account would be a bit confusing.
Also if you know nothing about investing, an different concept like market timing a retirement account would be a bit confusing.
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Re: 150k to invest. Portfolio advice.
I'm pretty sure most people here would not advocate such an attempt at market timing.assumer wrote:illcrx wrote:[Commercial website promotion removed by admin LadyGeek]
x2
You won't find too many people here who agree with the idea of actively managing/timing anything.
K. I. S.
- Pennstateclj1
- Posts: 501
- Joined: Sun Apr 03, 2011 2:53 pm
- Location: State College, PA
Re: 150k to invest. Portfolio advice.
How about just keeping it simple in taxable- you can rebalance in the IRA or Solo401k- whichever you go with.
150k split 3 ways-
Total Stock Index
Total International Index- foreign tax credit
Intermediate term tax-exempt (you have painful tax rates, this fund has no AMT bonds I believe.)
http://www.bogleheads.org/wiki/Principl ... _Placement
Add new money to whichever isn't doing so hot, or equally if they all are about the same.
You shouldn't be considering REITs for your taxable account,especially at 35% marginal. But in tax-advantaged they're appropriate.
I would disregard the market timing idea also, you can't do it consistently and effectively throughout your entire investing career.
Take what the market gives you, control what you can- costs, taxes, risk.
150k split 3 ways-
Total Stock Index
Total International Index- foreign tax credit
Intermediate term tax-exempt (you have painful tax rates, this fund has no AMT bonds I believe.)
http://www.bogleheads.org/wiki/Principl ... _Placement
Add new money to whichever isn't doing so hot, or equally if they all are about the same.
You shouldn't be considering REITs for your taxable account,especially at 35% marginal. But in tax-advantaged they're appropriate.
I would disregard the market timing idea also, you can't do it consistently and effectively throughout your entire investing career.
Take what the market gives you, control what you can- costs, taxes, risk.
- Pennstateclj1
- Posts: 501
- Joined: Sun Apr 03, 2011 2:53 pm
- Location: State College, PA
Re: 150k to invest. Portfolio advice.
Where can I get your newsletter? How much is it?illcrx wrote:illcrx wrote:[Commercial website promotion removed by admin LadyGeek]
Re: 150k to invest. Portfolio advice.
illcrx wrote:Its none of my business but owning a home is better than not, if you have the ability to spend 3k every month on investing you should take advantage of the current low interest rate environment and get a home in case things go south it would be great to have a place to live. Especially because the Fed just said they may stop their current policy at the end of 2013 or before which means interest rates will rise, a home is better than cash any day.
Hmmmmm. There are millions of people in the country who would say otherwise. Doesn't it also depend upon why one buys a home? Is the home for shelter and refuge? Is it for an investment?
Owning a home isn't for everyone and ought not be assumed to be better than renting in every circumstance.
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Re: 150k to invest. Portfolio advice.
That was before I had anything more than a Target Retirement fund in a Roth IRA, but I think the answer to your question from most of the more mature bogleheads on this forum would be:illcrx wrote:Whats wrong with market timing, it can yield great results. So are you telling me you sat through 2008-2009?
"Yes, I stayed the course in 2008 and 2009, rebalanced if necessary, and I have now recovered and made great gains."
Are YOU trying to say that you "market timed" 2008 and 2009? That is certainly a dangerous precedent. I'm surprised you didn't do something crazy like, say, sell all your holdings before the fiscal cliff...
To the OP -- Stay the Course. You'll find no support for attempted market timing here.
Re: 150k to invest. Portfolio advice.
Wow, the first post there I can find (consisting of "Current Outlook: Good") was 4 days before the poster joined bogleheads.assumer wrote:Edit: Forgetting about market timing in general, even the "[Commercial website removed by admin LadyGeek]"'s website is rife with typos... "If you do not have a retirement account and no nothing about any of this it will be confusing"
A whois reveals that site was registered less than 60 days before that. The owner who has the name of the blogger and the email address of the poster.
The sewer system is a form of welfare state. |
-- "Libra", Don DeLillo
Re: 150k to invest. Portfolio advice.
Good eyes. I took care of it.