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#11
05-18-2006, 09:43 AM
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Re: My Invesment Plan. Any advice?
[ QUOTE ]
[ QUOTE ] Does it make sense to have such a heavy allocation in the US when the dollar is falling and seems to be on the edge of collapse? [/ QUOTE ] Good question. I have no idea. Anyone else care to weigh in? [/ QUOTE ] This information may have an impact depending on your goals of your investments. If you plan on using your money somewhere in the near future then it would probably be better invested less aggressively. If you are in it for long haul, then i dont see it being much of an issue. -mike 
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#12
05-18-2006, 12:30 PM
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Re: My Invesment Plan. Any advice?
You may want to dollar cost average over an extended amount of time. You may have a high risk tolerance, but it is never fun watching 10% or more of your capital evaporate because of a short term correction just after you have plunged into your funds.
Most fund companies allow you to put all your money into one of thier money markets and then put a percentage of it into your allocations over time. Generally speaking the period from May until October are stagnant or down times in the market.
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#13
05-18-2006, 12:37 PM
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Re: My Invesment Plan. Any advice?
[ QUOTE ]
[ QUOTE ] [ QUOTE ] [ QUOTE ] 5.) Open an individual account through Vanguard and invest the remaining $16,000. Here is where I am pretty clueless. I read and enjoyed this 2+2 post and while I know nothing about investing, it's advice sounded pretty good. The breakdown one poster recommend (and everyone pretty much agreed on) was: Quote: 20% US Total Stock Market Index 20% US Large Cap Value Index 10% US Small Cap Index 10% US Small Cap Value Index 10% REIT Index 10% European Index 10% Asia/Pacific Index 10% Emerging Markets Index So I was thinking about allocating the $16,000 in this manner. [/ QUOTE ] The problem with doing this through vanguard is that the index funds require you have to $10k in each fund or else they take a yearly fee. adding up all of those yearly fees can take away anywhere from a quarter to a full percent of your gains. also, i beleive most of the funds require you to invest atleast $3k in each fund, which you would not have enough to cover initially. finally, i hear some of the funds, large value, small cap, small value, REIT, are not very tax efficient. alas, i have only read this in a book and planned to make a future post about how to evaluate their effect on your taxes. also, re-balancing a taxable account will run up some capital gains, so you should rebalance through deposits and withdraws, rather than doing every year or two. id poke around on the vanguard website to see what kind of minimuns and fees are involved with the funds you would like to purchase. hopefully this helps some, and hopefully somebody can prove me wrong if im giving bad advice. -mike [/ QUOTE ] Thanks for the advice Mike. What book have you been reading? It sounds interesting and I should probably check it out. I really don't know much about the tax (in)efficiency of these funds, but mwgr5 recommend the Total Us/International indexes as highly efficient funds. [/ QUOTE ] The book is "The Four Pillars of Investing" by Bernstein. [/ QUOTE ] Thanks, I'll get up to the bookstore and check out this book. [ QUOTE ] [ QUOTE ] [ QUOTE ] Does it make sense to have such a heavy allocation in the US when the dollar is falling and seems to be on the edge of collapse? [/ QUOTE ] Good question. I have no idea. Anyone else care to weigh in? [/ QUOTE ] This information may have an impact depending on your goals of your investments. If you plan on using your money somewhere in the near future then it would probably be better invested less aggressively. If you are in it for long haul, then i dont see it being much of an issue. -mike [/ QUOTE ] I don't plan on withdrawing my money any time soon, so hopefully the strength of the dolar won't impact my strategy.
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#14
05-18-2006, 12:37 PM
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Re: My Invesment Plan. Any advice?
[ QUOTE ]
You may want to dollar cost average over an extended amount of time. You may have a high risk tolerance, but it is never fun watching 10% or more of your capital evaporate because of a short term correction just after you have plunged into your funds. Most fund companies allow you to put all your money into one of thier money markets and then put a percentage of it into your allocations over time. Generally speaking the period from May until October are stagnant or down times in the market. [/ QUOTE ] Thanks leto, I'll look into this.
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