Portfolio Review / Assistance

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
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mmicha
Posts: 23
Joined: Wed Feb 13, 2013 9:13 pm

Portfolio Review / Assistance

Post by mmicha » Sat Apr 06, 2013 7:52 pm

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Last edited by mmicha on Mon Jun 03, 2013 1:31 pm, edited 1 time in total.

BerkeleyChris
Posts: 62
Joined: Sat Feb 09, 2013 11:23 am

Re: Portfolio Review / Assistance

Post by BerkeleyChris » Sat Apr 06, 2013 8:29 pm

i think you pretty much nailed your 70/30 desired allocation and have the proposed funds placed optimally in the most tax-efficient accounts

Bond 29.1%
International Stock 21.4%
US Stock 49.6%

was that the balance between domestic/international stocks you had in mind?

not sure i added anything here, but nice job.

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Taylor Larimore
Advisory Board
Posts: 27106
Joined: Tue Feb 27, 2007 8:09 pm
Location: Miami FL

A superior portfolio !

Post by Taylor Larimore » Sat Apr 06, 2013 8:38 pm

mmicha:

Excellent portfolio: Suitable stock/bond allocation, low cost, diversified, tax-efficient and simple to understand and maintain.

Large savings account with its low return seems unnecessary but perhaps it is for a special need.

Congratulations and best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

mmicha
Posts: 23
Joined: Wed Feb 13, 2013 9:13 pm

Re: A superior portfolio !

Post by mmicha » Sat Apr 06, 2013 9:03 pm

Taylor Larimore wrote:mmicha:

Excellent portfolio: Suitable stock/bond allocation, low cost, diversified, tax-efficient and simple to understand and maintain.

Large savings account with its low return seems unnecessary but perhaps it is for a special need.

Congratulations and best wishes.
Taylor
What would you recommend to do with the savings aspect? I'm currently making 60k, and figure that is a good amount for emergency and rainy day?

mmicha
Posts: 23
Joined: Wed Feb 13, 2013 9:13 pm

Re: Portfolio Review / Assistance

Post by mmicha » Sat Apr 06, 2013 9:07 pm

BerkeleyChris wrote:i think you pretty much nailed your 70/30 desired allocation and have the proposed funds placed optimally in the most tax-efficient accounts

Bond 29.1%
International Stock 21.4%
US Stock 49.6%

was that the balance between domestic/international stocks you had in mind?

not sure i added anything here, but nice job.
It seems better to be more in domestic stocks. Though I'm not certain I understand the difference domestic/international. As far as what one brings over the other. The bonds matches my age roughly was what a lot of reading recommended.

BerkeleyChris
Posts: 62
Joined: Sat Feb 09, 2013 11:23 am

Re: Portfolio Review / Assistance

Post by BerkeleyChris » Sat Apr 06, 2013 9:18 pm

the split between domestic / international looks great

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Taylor Larimore
Advisory Board
Posts: 27106
Joined: Tue Feb 27, 2007 8:09 pm
Location: Miami FL

Re: A superior portfolio !

Post by Taylor Larimore » Sun Apr 07, 2013 7:05 am

mmicha wrote:
Taylor Larimore wrote:mmicha:

Excellent portfolio: Suitable stock/bond allocation, low cost, diversified, tax-efficient and simple to understand and maintain.

Large savings account with its low return seems unnecessary but perhaps it is for a special need.

Congratulations and best wishes.
Taylor
What would you recommend to do with the savings aspect? I'm currently making 60k, and figure that is a good amount for emergency and rainy day?
mmicha:

I doubt you even need a separate "emergency fund." You have a large taxable account and a Roth where money is availailable for emergencies.

Pat and I have not had a separate emergency fund for many years. This is because we know that, like many other investors, that we can obtain cash for most emergencies from:

An ATM
Our credit card
Our portfolio
Insurance policies
Bank loan
Mortgage (takes time)
Family.

For us, there is no need to complicate our finances with a separate low-yielding emergency fund we may never need.

That said, for many people, particularly young investors who don't have savings or credit, an "emergency fund" is essential.

Like many financial "truths" which are not always true, the need for a separate emergency fund is not necessary for everyone.

Based on the information you have provided, I suggest you put most of your emergency fund into your portfolio with its higher expected return. Be careful to maintain your desired overall stock/bond allocation.

You should expect your 70/30 portfolio to decline 35% or more (1/2 its stock allocation) during the next bad bear market. If this will cause you to sell or lose sleep, reduce your stock allocation now.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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