|
#1
|
|||
|
|||
Whats my next index?
So right now I a large chunk of my poker savings in a Vanguard account and I think I'm ready for another purchase. My current holdings consist of about 70% S&P index and 30% emerging markets index, I kinda thought the emerging markets one would be a nice hedge against a US decline but apparently when things crashed a bit last week that was no exception...shows what I know.
I have an amount equal to my emergings markets 30% available to invest, which will make it about 22% 22% 56%. I was looking at small or mid cap funds, but I wouldnt mind something international that is less risky...developed markets fund maybe. Anyway, obviously my portfoilo isnt as diversified as it could be but we arent talking about massive sums of money here so I cant break it up as much as I might like. |
#2
|
|||
|
|||
Re: Whats my next index?
Check out their Int'l Value fund. It's been beaten up a little this month, but it's real solid IMO. I prefer it to the Total Int'l fund. I'd also recommend a target IRA.
|
#3
|
|||
|
|||
Re: Whats my next index?
Dude! The FIRST question you must ask yourself when investing is "What is my time horizon?" or in it's other form, "What is this money to be used for?" Are we talking retirement? House downpayment? It matters. Mutual funds are designed for the long-term, so be sure not to get caught caring about short-term fluctuations.
PS The dollar will go into freefall soon enough. When boomers retire, the national debt devours your generation like the Mother of all Sneaker Waves, and world oil markets shift to the euro, the greenback becomes toilet paper- so DO keep a finger in the international pie. |
#4
|
|||
|
|||
Re: Whats my next index?
Yeah sorry, I should have mentioned that I am a 22 year old college student who will be starting in the working world this year with a reasonable income...the point being that I dont need this money for anything in particular. I guess the main goal is growth maybe on the 10 year horizon, I kinda have this idea that it would be cool to use my poker cash money for a down payment on a house someday. Either way I dont have a ton of faith in the ol US right now so international looks good to me, I checked out the value fund and I think its a winner, thanks for the tip.
|
#5
|
|||
|
|||
Re: Whats my next index?
First, your emerging markets allocation is too large. To maintain your interntaional allocation of 30%, I would reduce the emerging markets fund to about 10% and invest the remaining 20% in a more diversified fund, such as the total interntaional stock market index.
Second, are these investments in taxable accouts or non-taxable accoutns, such as an IRA? This is very important because you need to have your least tax efficent funds in the non-taxable accounts. If you dont have an IRA, I would open a ROTH IRA. I would make the maximum investment in the small cap index. The small cap index actually has mid cap exposure, so by holding this fund you be better diversified and have a more aggressive and historically better performing portfolio. Also, make sure to contribute to your employeer retirement program, if available. Try to treat all of your investements in different accounts as 1 portfolio. So if you can contribute to an employeer plan, again make sure you are investing in a fund that is not tax efficent. |
#6
|
|||
|
|||
Re: Whats my next index?
How about keeping the other 30% in something not tied to the indices? Bonds? Regular savings account? I am no expert though.
|
#7
|
|||
|
|||
Re: Whats my next index?
[ QUOTE ]
First, your emerging markets allocation is too large. To maintain your interntaional allocation of 30%, I would reduce the emerging markets fund to about 10% and invest the remaining 20% in a more diversified fund, such as the total interntaional stock market index. Second, are these investments in taxable accouts or non-taxable accoutns, such as an IRA? This is very important because you need to have your least tax efficent funds in the non-taxable accounts. If you dont have an IRA, I would open a ROTH IRA. I would make the maximum investment in the small cap index. The small cap index actually has mid cap exposure, so by holding this fund you be better diversified and have a more aggressive and historically better performing portfolio. Also, make sure to contribute to your employeer retirement program, if available. Try to treat all of your investements in different accounts as 1 portfolio. So if you can contribute to an employeer plan, again make sure you are investing in a fund that is not tax efficent. [/ QUOTE ] Thanks for the solid advice, I was actually just reading more about emerging market volitility and am planning on re-allocating some of that now, the only problem is that I only have so much money and there are fund minimums that must be met. Its probably true that with a relatively small amount like this I should stick more to bonds and savings, but like I said earlier its money from poker so in that spirit I don't mind gambling with it a little for some slightly higher risk/reward. As for the IRA, I havent actually started my job yet, but as soon as that gets going I will be opening a roth IRA and maxing it out for the 2006 year. I am sadly somewhat clueless about which funds are more or less tax efficient so any help people can offer about that would be great. My employer does offer a relatively weak 10% 401k match but its still free money so I imagine I'll take some advantage of that too. |
|
|