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Retirement Discussions / Retire Early CampFIRE
|Subject: Re: On second thought, 2828 - Small Cap Issue||Date: 1/27/2013 4:50 PM|
|Author: telegraph||Number: 668532 of 789743|
Trey:""Besides Options, I'm evaluating MF Hidden Gems. I have about 35% of my portfolio in small caps and all of this, with the exception of a single small position, is split between IWN and IWO. (These are small cap value and growth stock ETF's, respectively.)"
You're too busy micromanaging things.
I'd go to the Scott Burns site and read up on the Couch Potato portfolio. You can expand that to six ways if you want with the follow up. or now he is up to 10 ways.
Index funds...index funds....minimize risk. STAY away from funds with high costs.
35% in small caps? OUch!
trey:"I used ETF's for my US small cap asset allocation both to diversify away as much risk as I could, and to save time studying stocks."
Good move. Now, how old are you and how risk averse are you? You got any money in TIPS? or other bonds?
trey:" Though IWO and IWN have done very well over the last decade or so, tracking their indeces admirably, I think I'm ready to do a little more work, take a little more rick, and shoot for slightly better returns."
or, more losses.
trey:"The question is this: how many individual positions should one take within a small cap allocation? HG holds a whole ton of tiny positions and many on the boards seem to lean toward "big" numbers (say 20-30 positions) as well. I think the risk can be managed with 10 or fewer within that asset class."
You going to wake up every morning and read the stock news for each of your 30 positions? to make sure no 'bomb' went off over night? ANd then read it again at noon, and in the evening? You actually going to read and understand the annual reports and the notes at the back that really explain what is going on? That can take 10 hours or more per stock to decipher.
Keep it simple.
Depending how close to retirement you are.....affects a lot of your choices.
The best way to retire early is to SAVE SAVE SAVE and live below your means...constantly......
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