No. of Recommendations: 0
Hello Friends, my apologies if this post is in the wrong board/section ( redirect me if I am please).

Im currently a beginner that just made a Roth IRA Account. Im still researching/learning how to best invest into my retirement. Im currently in my 30s and plan to "partially" retire in my 50s, so I have a good 20~ years to grow my investment. I have one Roth IRA account which is my primary core retirement account and 1 Brokerage account I use to invest in some of the Fool's recommendations while learning how to invest. My main focus right now is to set up my Roth account to the best I can..such as investing in the "right" stock/ETF/M.F/etc. I plan on maxing out the contribution every year, and also want to keep a limited amount of "items" to fund so I can stay focus on a few and not excess amount of different "items". Any comments/concerns/advices/tips would be very helpful.

I am currently investing in these 2 funds in my Roth IRA :

-Vanguard Growth ETF (VUG)
-Vanguard Total World Stock (VT)

Im not sure what I'm missing, but my guess is some form of Bond and/or International exposure. I only want about 5-6 "item" max in my Roth ( not sure if its good or bad idea, but I want to keep it tight). I looked into a few other "items" and don't know if its a good fit for the portfolio :

(both)
-Vanguard S&P 500 ETF (VOO)
-Vanguard Total International Stock ETF (VXUS)

(one or the other)
-Vanguard Long-Term Bond Index Fund (VBLTX)
-Total Return Fund (MAHQX)

I'm open to learning and receiving any type of feedback. Do not hesitate to give any recommendations/advices that can help improve my portfolio.

Thanks,
Just another Fool
Print the post Back To Top
No. of Recommendations: 3
Im currently a beginner that just made a Roth IRA Account. Im still researching/learning how to best invest into my retirement. Im currently in my 30s and plan to "partially" retire in my 50s, so I have a good 20~ years to grow my investment. I have one Roth IRA account which is my primary core retirement account and 1 Brokerage account I use to invest in some of the Fool's recommendations while learning how to invest.

Just a warning - you're probably going to need a lot more than just a Roth IRA that was started in your 30s to be able to "partially" retire in your 50s, so I hope your Brokerage account is pretty large, and/or you are investing in a workplace retirement plan.

My main focus right now is to set up my Roth account to the best I can..such as investing in the "right" stock/ETF/M.F/etc. I plan on maxing out the contribution every year, and also want to keep a limited amount of "items" to fund so I can stay focus on a few and not excess amount of different "items". Any comments/concerns/advices/tips would be very helpful.

Google 'couch potato portfolio' or invest in Vanguard LifeStrategy Aggressive Growth. As you get more towards retirement move some/all to the LifeStrategy Moderate Growth.

AJ
Print the post Back To Top
No. of Recommendations: 0
Hi AJ, thanks for looking out.

I just started my Roth IRA and my work doesn't provide any type of retirement plans. Sadly, my Brokerage account is no where near " pretty large" at the moment. "Partially" retiring in my 50s just means that I will work less...most likely gonna work into my 60s-70s if I'm still around. Anyways, I do plan on opening a SEP or Solo 401k in a few years when I'm able to. My plan is to just set up the Roth as a Solid Foundation first and invest in the Brokerage account on the side. Thank you for telling me about the "couch potato portfolio", its definetly an interesting strategey that I will look into more. The Vanguard Life Strategy Aggressive Growth would had been a solid choice if I didn't choose any investment yet. I didn't bump into this fund before during my research... just like how I found out about Target funds a lot later. I would most likely look into both of those for my partner's IRA when opening one in the future. I plan on keeping (VT) and (VUG) in my Roth so I need to figure out what I need to balance it out so it can somewhat be similar to the "Vanguard Life Strategy Aggressive Growth"( just using as example, I know it will vary and be slightly different, I guess the word I'm looking for is "Diversify").

Thanks again AJ
Print the post Back To Top
No. of Recommendations: 2
I plan on keeping (VT) and (VUG) in my Roth so I need to figure out what I need to balance it out so it can somewhat be similar to the "Vanguard Life Strategy Aggressive Growth"( just using as example, I know it will vary and be slightly different, I guess the word I'm looking for is "Diversify").

Yeah, you'll not hear about things like Vanguard Life Strategy from the typical financial press.

The Vanguard Life Strategy Aggressive Growth would had been a solid choice if I didn't choose any investment yet.

Buying a ETF is not like getting married. It's not a forever and always decision. You can switch from VT+VUG to Vanguard LifeStrategy Growth Fund (VASGX) with no more effort than a couple of mouse clicks, and at most a few dollars of commission.

I guess the word I'm looking for is "Diversify").

You surely realize that VUG isn't a great diversified with VT. VT is good enough all by itself. Pretty much covers all the bases, US & non-US, 1st world and emerging markets.

If you have 20+ years to go, there's no reason to have any bond exposure. Which is essentially what "diversified" comes down to--owning bonds. Not to mention the terrible losses that bonds will have in the coming decades as interest rates cease their long decrease and start going back up to normal levels.

I'm not sure why you'd want to balance out to be similar to VASGX. If you want that, just buy VASGX and be done with it.
Print the post Back To Top
No. of Recommendations: 2
Go to Saul's Investment Strategies

Just buy what he buys.
He lists his portfolio at the end of the month and reasons for his convictions.
Only has 10-11 stocks.

We call him a stock whisperer. Read his Knowledgebase articles. #1, #2, #3.

Saul says to learn how he does it, not copy him.

Is this aggressive sector of stock? Hell yes. But as Motley Fool brothers say "it always goes up in the long run". You are in a very looooooong run. No need to be conservative.

John
40% YTD last Friday
Print the post Back To Top
No. of Recommendations: 1
"If you have 20+ years to go, there's no reason to have any bond exposure. Which is essentially what "diversified" comes down to--owning bonds. Not to mention the terrible losses that bonds will have in the coming decades as interest rates cease their long decrease and start going back up to normal levels."

Oh, there are several good reasons for owning bonds in your portfolio. Or a ladder of CDs.

Yeah, the market , so far, has never gone down and stayed down. But if you bought in 1929, it would be till the 1940s before the DOW recovered....more than 15 years.

If you had retired in 1929, your portfolio would not look all that great with just stocks after 2 years. Stocks down 90%. Now, if you were 50/50, each year you rebalanced...you would have bought a lot of cheap stocks and really cleaned up as the market recovered.

If you owned all stocks, you would be crying in your beer (if you could afford it) in 1932 with the market down 90%. With your stocks down that far, you probably couldn't afford it. Unemployment was 25% so going 'back to work' would have been a big problem too.

1968 also wasn't pretty. all stocks? Hmmm.....

Remember, the 4% rule is based upon a diversified portfolio of bonds and stocks, even starting out at the beginning of a 30 year period.

Now, for the past 30-40 years, running 90% of stocks or more has been the most successful strategy....... but that could all change TOMORROW..... who knows?

But telling someone who is retired, with 20 years left on the 30 year withdrawal period, that 'all stock' is just peachy.....well, not in my book. The next 10 years could be down 10% a year for year after year after year.......


t.
Print the post Back To Top
No. of Recommendations: 0
AJ already mentioned the couch potato portfolio, another term used is "lazy portfolio". Here's a set you can look through to see how they're built :

https://www.marketwatch.com/lazyportfolio

And I'm with Ray, with your time horizon, and using the above models, I'd shrink or remove the bond component.
Print the post Back To Top
No. of Recommendations: 2

But telling someone who is retired, with 20 years left on the 30 year withdrawal period, that 'all stock' is just peachy.....well, not in my book. The next 10 years could be down 10% a year for year after year after year.......


Did you miss the part where he said he is some 20-30 years to retirement, and his portfolio is currently small?
Print the post Back To Top
No. of Recommendations: 0
AJ already mentioned the couch potato portfolio, another term used is "lazy portfolio". Here's a set you can look through to see how they're built ...

If you are willing to do the work to run a Couch Potato portfolio, I think you'd be better off putting that same effort into Gary Antonacci’s Dual Momentum Global Equities Momentum (GEM) strategy.

In both CP and GEM you just make one decision and (perhaps) one portfolio adjustment a year. The thing that I find really attractive about GEM is that it is self-timing--it inherently switches you over from stocks to bonds when stocks are doing bad.

For wealth building, bonds are a performance drag so you generally don't want to have anything in bonds but everything in stocks. But sometimes you DON'T want to be in stocks.

Well, okay, you need to run the GEM rules every month and not just once a year. But most of the time the rules just tell you to stand pat; no need to make any changes. My wife does this with the grandkids' accounts--takes her about 5 minutes each month.


Good writeup on the rules and some issues with GEM here: https://blog.thinknewfound.com/2019/01/fragility-case-study-...

Gary's response to that article here: https://www.dualmomentum.net/2019/01/whither-fragility-dual-...

=========
Funny thing about "couch potato" "lazy" portfolio is that you *still* have to do a bunch of work in picking out which lazy strategy you want to use. That marketwatch article lists 8 strategies--but oddly doesn't mention the original Couch Potato made popular by Scott Burns.
Print the post Back To Top
No. of Recommendations: 8
I'll give you the same advice that I give my two sons, both in their late 20's:
-US stocks will give you the best return over the next many decades.
-If you ignore the daily and even yearly gyrations, holding bonds and other "diversifiers" won't do you any good, but will hold you back on the upside for the trade-off of not dropping as much on the downside.
-At the beginning, a large percentage drop in the stock market won't be a large monetary loss for you because you won't have as much invested yet.
-All the volatility and drops will buy you more shares when you're investing every paycheck. Because your buys are (amount invested)/(index price) you buy more shares at the low than at the high.
-The value of your portfolio on any given day is not as important as its value when you're ready to start "winding down." That is, when you're ~10 years from pulling money out of it, your asset allocation will start moving to optimizing drawdown vs. optimizing growth. Until then, go for the strategy that has the best chance of maximizing the amount you'll have in the future.

If you are able to ignore stock market gyrations, you could go 100% Total US Market Index. You could also go 80/20 US/International (rebalance yearly). If you are not able to endure potential big drops, you can include a bond fund whose anchor will reduce the downs but also reduce the ups. But, whatever allocation you think you need, don't screw with it continuously. A study (was it Dalbar?) showed that investors earned several percent a year less than the funds they invest in. Why? Because they panic and sell at lows, then fear they'll miss out on the upswings and buy in really late.

My two sons do this:
-One doesn't want to worry about all this stuff, so invests in a life-cycle fund. However, he's one of the people who has a pension promised to him.
-The other is aggressive, and has the 80/20 US/Intl mix.

Bonus advice:
-I have some money in REITs and commodities, and if I had to do it over, would not do that. I thought I could both reduce volatility and possibly increase the upside, and they both have been a 20 year drag.
Print the post Back To Top
No. of Recommendations: 2
Im not sure what I'm missing, but my guess is some form of Bond and/or International exposure. I only want about 5-6 "item" max in my Roth ( not sure if its good or bad idea, but I want to keep it tight). I looked into a few other "items" and don't know if its a good fit for the portfolio :

Portfolio design is a pretty deep rabbit hole. You can start here for some ideas:

https://www.bogleheads.org/wiki/Category:Portfolios

I'm becoming increasingly convinced that simpler is usually better, however. Most portfolios are based on historical results--which is the only tool we have. But the world is a very different place today, so

Based on your age, I would recommend something like

80% Vanguard Total Stock Market (VTI)

10% Vanguard FTSE All-World ex-US ETF (VEU)

Then top off with bonds and small caps up to your comfort level.
Print the post Back To Top
No. of Recommendations: 5
I have some money in REITs and commodities, and if I had to do it over, would not do that. I thought I could both reduce volatility and possibly increase the upside, and they both have been a 20 year drag.

Likely true for commodities (see note at end of post), but not for REITs in an indexed approach, looking at Total Returns (assumes dividend reinvestment, thus a better approximation of what one could do in an IRA or the like, rather than in a taxable account).

S&P 500 Total Returns index from https://finance.yahoo.com/quote/%5ESP500TR/ :
Start 1999, 1379.84; End 2018, 5383.63. Ratio of 3.90, CAGR over 20 years 7.0%.

FTSE NAREIT total returns index from https://www.reit.com/sites/default/files/returns/AnnualRetur...
Start 1999, 1099.09; End 2018, 6852.72. Ratio of 6.23, CAGR over 20 years 9.58%.

In other words, with dividend reinvestment, the indexed total of REITs in North America has materially outperformed that of large-cap North America stocks (S&P 500) over the last complete 20-years period. Most definitely not "a drag".

(Note: I can't easily get exact numbers for commodity indices going back 20 years, but just eyeballing historical charts e.g. at https://tradingeconomics.com/commodity/gsci it does appear that, despite an enormous spike in-between, GSCI is pretty close to flat over the last 20 years, thus would most certainly have been quite a drag compared to either FTSE NAREIT or S&P 500).
Print the post Back To Top
No. of Recommendations: 1
Hello Friends,

Thank you for everyone's input/advice. I'm actually not too experienced in replying back in forums either...so I'm just hitting reply on the last message which is meant for everyone that posted previously..Anyways, It definitely gives me more to look into. I will check out both the Lazy Portfolio and the "GEM" Strategy. I will also consider only investing a small percentage into bonds ( or none at all). I will hold off on any type of real estate investment since its already a lot to learn right now. As of now, I will hold onto both (VT) and (VUG) which I have only 10 shares in each. Im considering the Vanguard Life Strategy Growth Fund and if I do end up with it, most of the Roth contribution will go towards that ( I know this fund more or less covers/includes both VT and VUG within but I will still keep them for now even if it doesn't make any sense).

A random question :
Does it make any sense to invest in both " Target Date Fund " AND " Target Risk Fund" together?


Again, Thank you for everyones feedback. I will keep researching and looking into different portfolio builds. Will keep everyone updated.
Print the post Back To Top
No. of Recommendations: 4

A random question :
Does it make any sense to invest in both " Target Date Fund " AND " Target Risk Fund" together?


No. In fact, don't invest in either. Stick to the index funds that we've talked about.
Print the post Back To Top
No. of Recommendations: 0
ok I will place more focus on index funds. thank you for the follow up!
Print the post Back To Top
No. of Recommendations: 0
Hi Money,

I have followed Saul for a long time but have a hard time finding things on the boards since MF changed things awhile back. Can you direct me where I can go to find Sauls portfolio? Your help is greatly appreciated.

Best Regards,

epm
Print the post Back To Top
No. of Recommendations: 1
Epm,

Here's a link. Saul posts his portfolio and any changes at the last weekend of the month.

https://boards.fool.com/sauls-investing-discussions-120980.a...

David
Print the post Back To Top
No. of Recommendations: 0
Thanks David for the link.
Print the post Back To Top
No. of Recommendations: 0
I have some money in REITs and commodities, and if I had to do it over, would not do that. I thought I could both reduce volatility and possibly increase the upside, and they both have been a 20 year drag.

Likely true for commodities (see note at end of post), but not for REITs in an indexed approach, looking at Total Returns (assumes dividend reinvestment, thus a better approximation of what one could do in an IRA or the like, rather than in a taxable account).

S&P 500 Total Returns index from https://finance.yahoo.com/quote/%5ESP500TR/ :
Start 1999, 1379.84; End 2018, 5383.63. Ratio of 3.90, CAGR over 20 years 7.0%.

FTSE NAREIT total returns index from https://www.reit.com/sites/default/files/returns/AnnualRetur......
Start 1999, 1099.09; End 2018, 6852.72. Ratio of 6.23, CAGR over 20 years 9.58%.

In other words, with dividend reinvestment, the indexed total of REITs in North America has materially outperformed that of large-cap North America stocks (S&P 500) over the last complete 20-years period. Most definitely not "a drag".


OK, I looked closer at the REIT portion of my portfolio.

My REITs are:
~45% VNQ which has performed well
~35% ICF which has performed OK
~20% SNH which has been a stinker.

SNH is Senior Housing Properties, which I thought was a way to not only diversify my portfolio with Real Estate, but also capitalize on the trend of aging in the US with more senior care housing needed. Maybe SNH is doing a bad job, maybe the demographic shift isn't increasing senior housing property, maybe senior housing is increasing but unprofitably, or maybe I'm "right but too soon." I arrived at the thought to do this after reading a book about how demographics will be driving worldwide assets over the next half century by...oh, now I forgot. But he's one of the pundits about demographics, and those guys don't get notoriety by saying "here's a trend that will change things slightly over a long term" but by saying "these investments will crash and only these other ones can save you, ZOMG!!!" I "discounted" the intensity of the book's premises, but it still made sense for a couple percent of the port.

So, anyway, that's part of why my REIT slice hasn't been going gangbusters. Maybe it's another plank in the platform of "buy the Vanguard Index, and rebalance occasionally."
Print the post Back To Top