AboutJohn D Smith, CFP Expertise I can answer detailed questions regarding mutual fund investing, retirement planning, education planning and related financial planning/investment issues. I have a B.S. degree in Financial Planning & Counseling. I am also a Certified Financial Planner practitioner and have performed fee only investment management and financial planning services for the past 11 years.
Expert: John D Smith, CFP Date: 4/22/2008 Subject: Re: Advice on Investment Portfolio
Question 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: Before I can answer your question, pleaase share more about your specific investment goals. For example, your desire rate of return, your investment time horizon, the specific goal(s) for your investments, etc. Thanks!
---------- FOLLOW-UP ----------
QUESTION: Thank you, yes here are the details:
I desire at least 8 % but 10% would be awesome!
I am 33, plan to hold for 35 years and retire at 68.
Goals for investing: retirement
-Asad
Answer Hi. First, to clarify, I think you are heading in the right direction by building a portfolio of ETF's. My intial concern is that you have chosen 12 different funds and intend to invest 11k per year. With this amount to invest, I do not feel spreading it over 12 funds makes sense as the transaction charges to buy and sell will be excessive in % terms. Understanding there is no universal "right" answer to your question as each investor has their own preferences and thoughts as to what they feel is "right", I have a different opinion as to what the allocation should be and the ETF's to use. However, this opinion is based on my view which is by no means the only view out there. Keeping it big picture, I would recommend closer to 25 - 30% in international vs the 50% you are considering and I would invest between 60 - 65% in large US and 10% - 15% in small US. I would consider using ETF's from Barclay's iShares series as well as the Vanguard funds and start with core holdings such as an S&P 500 index, a small US index such as the S&P 600 and a broad international index of EAFE and Emerging Mkts. Once the acct gets larger you can add other holdings. I hope this helps.
