No. of Recommendations: 0


I'm 42, married with 4 kids. My wife and I retired 4 years ago. Last January, I
switched our stock portfolio from mutual funds to individual stocks.

Our investment portfolio consists of 5 years of living expenses (17%) in a MMF
and the rest (87%) in a 12 stock RKE portfolio. R is 4 Foolish Four stocks. K
is 4 KeystoneEPS stocks. And E is 4 PEG semi-annual stocks.

Our withdrawal rate is 4% of our stock portfolio's value per year which is
deposited in the MMF every January. We then live off of 1/60th of the MMF
total per month for the next 12 months.

Our portfolio costs are as follows: 0.8% commissions, 0.8% spreads, 0.4%
taxes, 4% inflation, and 4% withdrawal rate for a total of 10% per year
"portfolio drag".

My only complaints about my RKE portfolio is that it requires about a 150%
turnover rate and costs about 1.6% of assets per year (commissions and
spreads). It is also volatile as hell.

Question: is this 12 stock portfolio a good portfolio for an early retiree like
myself or should I be in an index mutual fund or say 100% invested in 15 or 20
Rule Maker stocks? Four Foolish Four Dow (R) stocks plus four Beat the S&P
500 stocks (B)?

Any takers on this one?


I do not know the answer, but since you are asking the question I think you are looking for a smoother ride. I would put some money in a market index. The ideas would not be to beat the market but stay with it. If you stay with the market your retirement income should be ok. I think I would add a few more stocks also.
Print the post  

Announcements

The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.