Expert: Paul Henneman - 4/18/2008

Question
Re: Advice on Investment Portfolio

Hello,

after reading 9 books on investing I have created my first portfolio.

A little about me:
Age: 33
Annual income: 135K

Here is my portfolio plan:

Invest 10.8K/Year (2.7K/quarterly)

ETF’s w/ ETrade.com | Research on ETFconnect.com

U.S. (1/2)

Style | Symbol | Exp Ratio | Unit(s) | Portfolio %

(LG) Large Cap Growth | VUG | 0.11 | 1 | 4.17
(LB) Total Stock Mkt | VTI | 0.07 | 1 | 4.17
(LV) Large Cap Value | VTV | 0.11 | 2 | 8.33
(SG) Small Cap Growth | VBK | 0.12 | 1 | 4.17
(SB) Small Cap Blend | VB | 0.10 | 1 | 4.17
(SV) Small Cap Value | VBR | 0.12 | 6 | 25.0

United States Totals | 6 | 0.11 | 12 | 50%


INT (1/2)

Style | Symbol | Exp Ratio | Unit(s) | Portfolio %

(LB) Large Cap Blend | VWO (Em Mkts) | 0.30 | 1 | 4.17
(LB) Large Cap Blend | VGK (Europe) | 0.18 | 1 | 4.17
(LB) Large Cap Blend | VPL (Pacific) | 0.18 | 1 | 4.17
(LV) Large Cap Value | EFV | 0.40 | 2 | 8.33
(SG) Small Cap Growth | GWX | 0.60 | 1 | 4.17
(SV) Small Cap Value | DLS | 0.58 | 6 | 25.0

International Total Avg | 0.48 | 12 | 50%

Portfolio Total Avg | 0.30 | 24 | 100%


Please give me your input. Thank you!

Asad Raza
asad_raza5367@hotmail.com

Answer
Asad,
  Thank you for your question! Sure, I think you are very much on the right track. Your choices of ETF's are broad, and diversified. My only comment would be to consider a stock portfolio. Holding stocks does require a greater time and research commitment, but a portfolio of stocks can significantly out perform general ETF's if done right. You could start small, perhaps 10% of your entire portfolio in stocks, and slowly increase that based on your success.
   But, if you are a more conservative investor, and do not plan to spend substantial time on your investments, general ETF's are a good choice.
   One final question: Is this through a retirement plan, such as a 401K or IRA account? If not, you should seriously consider this, as there are significant tax advantages. There are limits and maximums to what you can invest in these types of retirement accounts, and differences between for example a ROTH IRA and standard IRA. Please do not hesitate to follow up with me if you have any questions about this, these types of accounts can make a huge difference to your investments over time.

Sincerely,
Paul Henneman
President
ValuEngine Inc
www.ValuEngine.com