Investment Mistake?

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Golf maniac
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Joined: Wed Dec 27, 2017 2:02 pm
Location: Charlotte NC

Investment Mistake?

Post by Golf maniac » Fri Jan 12, 2018 3:48 pm

I have been reading posts on here for a few weeks and I think I may have made an investment mistake. Overall we have a large tax deferred portfolio for retirement (1.3M), no debt, and a pension. We are retired and live very comfortably within our means.

We decided last year to sell our home because we were in a really hot market and we will probably (95%) move to another state in the next 2 to 4 years. We wanted to lock in our gains and not worry about a possible down market in a few years. We took the proceeds and put in a Vanguard Brokerage Account. I tried to set up a conservative portfolio that will get us some return without taking excessive risk. The following are the investment and percentages:

VBIAX Vanguard Balanced Index Fund Admiral (10%)
VMFXX Vanguard Federal Money Market (10%)
VSCGF Vanguard LifeStrategy Conservative Growth (10%)
VASIX Vanguard LifeStrategy Income Fund (30%)
VBIRX Vanguard Short Term Bond Index (40%)

Given our short term need for this money to reinvest in a house is this portfolio taking too much risk?

What would you suggest we invest the money in to provide some return without taking excessive risk?

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Joined: Sun Aug 16, 2015 9:22 pm

Re: Investment Mistake?

Post by bikechuck » Fri Jan 12, 2018 3:53 pm

I would invest it in CDs of short duration. If the move is immanent I would consider 11 month no fault CDs with Ally. If the move is down the road a bit you could use longer term CDs.

I am pretty conservative and would not take market risk with money that I need in a 2 - 3 year time frame.

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David Jay
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Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: Investment Mistake?

Post by David Jay » Fri Jan 12, 2018 4:05 pm

You have two type of funds in the account: Funds with a stock component and funds without a stock component.

If you are under 2 years to withdrawal, I would not have any money in an fund with a stock component. I would use Short Term bond funds and CDs for money I didn't need to access immediately. For money you need access to immediately (a new car purchase, etc.), I would leave that in the money market fund.

If your timeframe is 2-4 years, I think your Asset Allocation of approximately 22/78 is reasonable but too complex. You could add a lot of simplicity by simply holding LifeStrategy Income (20% stocks) instead.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

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