23 yo, My situation - looking for investment help

[kamana]

I'm 23 years old. Have $80K liquid sitting in a 5% account now, a $15K poker roll used to generate income, and like $8K in student loans (7.5% interest). Also have a Roth IRA started in 06 with $8K. Very conservatively, we can say income at $5K / month.

I want to get started investing in the market, but I'm not really sure what to look for specifically. I was just going to go in blind with any of the following rated at 5 stars. I plan to buy a house within 2 years, but not sooner than 6 months.

http://mutualfunds.about.com/library...lvanguard3.htm

any specific ones I should invest in or focus on? thanks

[ahnuld]

as a poker player, yout income and bankroll dont look to be correct meaning yout roll is to small for the limits you are likely playing. With a 15k roll you should be playing max max 400nl and even then if it was my sole source of income I wouldnt be comfortable with that.

If you need the money for a downpayment on a house in 2 years I dont think investing in the market makes much sense right now, aka if losing 30% of the money in the next two years crushes you then you have no choice but bonds or the like.

[DcifrThs]

[ QUOTE ]
as a poker player, yout income and bankroll dont look to be correct meaning yout roll is to small for the limits you are likely playing. With a 15k roll you should be playing max max 400nl and even then if it was my sole source of income I wouldnt be comfortable with that.

If you need the money for a downpayment on a house in 2 years I dont think investing in the market makes much sense right now, aka if losing 30% of the money in the next two years crushes you then you have no choice but bonds or the like.

[/ QUOTE ]

this is some severe advice.

his "roll" is probably what he keeps liquid for poker..and you assume he plays NL [img]/images/graemlins/wink.gif[/img] ... limit ain't dead bitches! i'm sure if it falls below some level he'll add to it from his 5k income/month, drop down, or add to it from the 80k liquid.

he can lock that in for some good rates right now, or lock in a good portion of it and keep the rest in high yielding savings accoutns. or he can do both of those and with the last 3rd start investing in a high sharpe ratio portfolio (like the one i'll eventually post when i get through with the current project).

either way it isn't "savings account or nothing"

depends on what his goals are in the coming months/years etc.

so what are your goals and restrictions OP?

Barron

[darinvg]

I'm in a similar situation at the OP. I'm probably going to put together something like this.
I'll probably start w/ just a few of them and add as I get more money.

[ahnuld]

Barron, he said his goals are to buy a house in 6-24 months. Hence my advice of fixed income

[Actual God]

i'm in a similar boat as well, except i'm not playing poker anymore. that 50G tax-managed fund looks pretty cool. advantages/disadvantages to throwing such a high % of your money in there? i think i'll do that once i get a high-salary job. make sense?

[darinvg]

Tax managed vs regular is something I'm trying to figure out as well now. FWIW I should be making 6 figs if anyone has advice.

[kamana]

[ QUOTE ]
[ QUOTE ]
as a poker player, yout income and bankroll dont look to be correct meaning yout roll is to small for the limits you are likely playing. With a 15k roll you should be playing max max 400nl and even then if it was my sole source of income I wouldnt be comfortable with that.

If you need the money for a downpayment on a house in 2 years I dont think investing in the market makes much sense right now, aka if losing 30% of the money in the next two years crushes you then you have no choice but bonds or the like.

[/ QUOTE ]

this is some severe advice.

his "roll" is probably what he keeps liquid for poker..and you assume he plays NL [img]/images/graemlins/wink.gif[/img] ... limit ain't dead bitches! i'm sure if it falls below some level he'll add to it from his 5k income/month, drop down, or add to it from the 80k liquid.

he can lock that in for some good rates right now, or lock in a good portion of it and keep the rest in high yielding savings accoutns. or he can do both of those and with the last 3rd start investing in a high sharpe ratio portfolio (like the one i'll eventually post when i get through with the current project).

either way it isn't "savings account or nothing"

depends on what his goals are in the coming months/years etc.

so what are your goals and restrictions OP?

Barron

[/ QUOTE ]

You have that right about my "roll" Dcifr. I look forward to what you'll eventually post after your current project.

Goals: More aggressive than passive investing since I'm young. Something I can easily add funds to/buy more of with minimal or zero costs.

Restrictions: I'm not quite sure what you mean by this, but liquidity is always good since I want to buy a house in 6 - 24 months.

[DcifrThs]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
as a poker player, yout income and bankroll dont look to be correct meaning yout roll is to small for the limits you are likely playing. With a 15k roll you should be playing max max 400nl and even then if it was my sole source of income I wouldnt be comfortable with that.

If you need the money for a downpayment on a house in 2 years I dont think investing in the market makes much sense right now, aka if losing 30% of the money in the next two years crushes you then you have no choice but bonds or the like.

[/ QUOTE ]

this is some severe advice.

his "roll" is probably what he keeps liquid for poker..and you assume he plays NL [img]/images/graemlins/wink.gif[/img] ... limit ain't dead bitches! i'm sure if it falls below some level he'll add to it from his 5k income/month, drop down, or add to it from the 80k liquid.

he can lock that in for some good rates right now, or lock in a good portion of it and keep the rest in high yielding savings accoutns. or he can do both of those and with the last 3rd start investing in a high sharpe ratio portfolio (like the one i'll eventually post when i get through with the current project).

either way it isn't "savings account or nothing"

depends on what his goals are in the coming months/years etc.

so what are your goals and restrictions OP?

Barron

[/ QUOTE ]

You have that right about my "roll" Dcifr. I look forward to what you'll eventually post after your current project.

Goals: More aggressive than passive investing since I'm young. Something I can easily add funds to/buy more of with minimal or zero costs.

Restrictions: I'm not quite sure what you mean by this, but liquidity is always good since I want to buy a house in 6 - 24 months.

[/ QUOTE ]

here is the post i'll be expanding upon very heavily for various circustances in a week or two:

Post Linky. First post on page.

that is looking at just a limited universe of funds, but shows how great leverage can be in maximizing one's sharpe ratio.

the next step is to use the leverage gained through the rydex funds to develop a kind of lifecycle fund that is heavily weighted towards equities for the first 10-20 eyars and then moves the allocations towards TIPS and global sovereign bond funds, EMD funds etc. as the retirement age nears.

that is what i'll be working on from a simplified mean-variance optimization perspective.

Barron

[Gigi]

Barron, can't wait for the walk through guide on creating the highest possible sharpe ratio buy and hold portfolio!

There are so many index investing books out their, with each author suggesting his own asset allocations. While they mention expected return and standard deviation, I rarely see the risk adjusted return mentioned.

I did some tuning to my current portfolio. Got rid of REIT's, switched to some more diverse and deeper value indexes, changes include VV instead of SPY, BRSIX instead of IWC, VEA (lower expense ratio than EFA), GWX (smaller than DLS and more diverse). I've learned to not always look <a href="www.altruistfa.com%2FHaas%2520Expense%2520Ra tio%2520Study%2520working%2520paper.pdf" target="_blank"> the lowest expense ratio</a>, but rather to focus always on the sharpe ratio.

I know I can simply buy the Vanguard Target Retirement 2050 Fund but that's no fun, plus I completely agree with your view on hedging your international currency exposure since not doing so only adds risk without return, and it doesn't seem like these retirement funds do that, nor any of the suggested portfolios I've come across.

And by walk through guide I mean: open an account here, place an order for x% of this ticker symbol, a y% order for this, hedge this % of this currency by doing so and so, if you are young leverage your portfolio by this amount by..., if you are old have this % of bonds... That would be great!

Edit: Noticed you got the portfolio posted in the other thread. If you get a sticky going, would appreciated more details on how to exactly leverage.