first, turn off your ****ing phone signature.

you seem to think that the past several months of performance in your accounts is relevant; it is not.

you seem to think CDs are somehow not worthy of being called "investments"; this is a strange attitude, probably related to your misunderstanding of the importance of performance in constructing a portfolio.

i would never recommend buying a stock.

brianthemick and i had a long conversation recently about the merits of investing vs paying down debt. it's in the "xx to invest" thread.

generally, i would pay down vig at 5.5% instead of saving more. sometimes i recommend that people establish retirement savings first, but since you already have a 401k and a roth established, i'd attack the debt next.

i would also think hard about your immediate future. are you going to live with your parents forever? how do they feel about that? are you paying rent or otherwise helping to cover expenses? are you relying on them for your emergency fund?

i think i would prioritize thusly:

- emergency savings - 3-8 months expenses
- 401k up to match
- save up to get my own place
- student loans
- roth ira
- 401k up to max

Thanks for the response. Based on my over estimated budget I have probably 8 months expenses. But depending on what I buy or do it could fluctuate. I may gamble /play poker but try and manage money carefully and always have.
Work has no company match what so ever. My parents don't expect anything from me in terms of rent. The only thing I don't pay for is food. I cover car insurance gas dry cleaning etc.
Since I live on long Island making what I make its near impossible to live on my own comfortable and not strained with my loans before rent. I want to move out just a financially dumb move atm.

blah,

ok cool. context matters a lot. (and thx for deleting the signature it's super annoying )

for an emergency fund, i like to estimate my NEEDS conservatively so i have a reasonable safety margin, but assume that i can cut down my WANTS quite a bit. fwiw.

in that case, mark that row as $0 and move on.

this is a terrific response. sounds like you have a good grasp on your financial situation.

getting back to your original question now that i know a little more about your situation, i would dump the "windfall" into your student loans, starting with the highest vig. guaranteed return, that debt can be burdensome at a time when you could use liquidity, etc.

that said, dropping a chunk into the roth is also fine. assuming an aggressive portfolio held for a long time, it will probably do better than 5.5% in the long run. roth contributions can also double as emergency savings in a pinch, which is sometimes helpful when you're just starting out.

Are there any examples of super successful value investors* who developed their own starting capital though whatever means (working in finance, some other venture, etcetc) and enjoyed a "career" of simply investing their own money (ie. unemployed, spending their time managing their own money), with no interest in investing/managing the money of others? Or is this a stupid question because anybody who's truly a great value investor can make so much more money if willing to manage other people's money that it would be silly not to? I guess if people like this do exist, they likely don't get much exposure anyways so it would be tough to know much about them..

*For those that are cynical about whether people actually do truly beat the market, the question can still stand with the assumption that a "super successful value investor" was simply someone who ran good.

You're basically describing retirement. People work and save, then retire when the invested savings are sufficient to support their lifestyle. Usually people with the highest salaries achieve this the fastest.

Jim Rodgers is the first person that came to mind when I read this. He has also published several books after his "retirement".

What is the better long term option?

I plan on investing $1k a year for my kid until he is 18. I planned on buying him individual stocks for his birthday. Was going to buy 1 share of Google, next year buy 2 stocks worth $500, so on and so forth, so when he turns 18 he would have a bucket of stocks. Or...just put the same amount into a halfway aggressive mutual fund every year.

Im not worried about losing the money, I'm more concerned with which option should yield greater results.

Maybe not the right spot for this question but thought I could get some good responses here...

Relatively speaking, I'm an investment noob. I know a bit but I don't attempt to time the market; I basically just dump my money into several mutual funds.

I max out my 401(k) and force myself to "match" by investing another ~20k/yr in mutual funds. (I have somewhat of a long-term eye with such personal investments although I will likely be pulling some out in the next couple of years to buy a house.)

I'm ~80% equity/~20% debt. I'm not too optimistic about the market in 2014. Any suggestions as to where I should shift my mutual fund investments?

Quick question. Vanguard Target Retirement 2020 (VTWNX) was down 1.57% today.

Allocation to underlying funds as of 11/30/2013

Vanguard Total Stock Market Index Fund Investor Shares 43.6%(VTSMX)
Vanguard Total Bond Market II Index Fund Investor Shares† 30.2%(VBTIX)
Vanguard Total International Stock Index Fund Investor Shares 18.7%(VGTSX)
Vanguard Total International Bond Index Fund Investor Shares 7.5%(VTIBX)

Of those funds only VBTIX was down and it was only down .09%. How is that possible?

Annual dividend.

Ok cool. Thanks.

Rebalance periodically. I'm assuming you are fairly young and that your annual additions will make everything ok.

If it is making it difficult to sleep, consider putting some of the money in your accounts into a money market fund and rebalance out of that.

If you are feeling like getting all fancy you could read this: http://www.amazon.com/Value-Averagin.../dp/0470049774

Or you could just put it all in GLD Jan 18 2013 $125 calls.

Seems to me you are trying to time the market.

Figure out what you want your long term asset allocation to be, then stick to it. If you are not comfortable at 80 / 20, try 70 /30. There are many "lazy" portfolios available on the internet, a typical mix is domestic and foreign bonds, REITs, emerging markets, US, and world equities.

Find the lowest expense mutual funds or etfs possible that meet your allocation.

http://www.bogleheads.org/wiki/Asset_allocation

The consensus here is that you should put the money into a very low cost index fund.
I don't even understand what this sentence means.

Mr and my wife both max out our 401ks, we're federal employees in the Thrift saving plan.

We also max out Roth IRAs in Vanguard and I've only put dividend paying ETs in the Roth's, a combo of VIG, VYM and a REIT, VNQ. I was looking for tax free dividends in retirement. Anything wrong with this strategy?

I also have a brokerage account I put 250.00 a month in that I buy ETFs in, I have some Emerging Market ETFs, large cap and small cap etc.....

Unless you have some reason to think you are a superior stock picker, you should put the money in a low cost mutual fund.

Depending on one's job 8 months of expenses can be a lot. You never said what to do with that money either. Should he be keeping it under his pillow, putting it into a money market, OR investing part in a money market and part in a mutual fund?

Why do you recommend putting the max in a 401k (as the last step or anytime) instead of contributing the minimum to get the max match? Why not put the amount over that 'min to get the max' into a taxable account or an IRA?

After saying you are an investing noob and how you have never tried to time the market what makes you think you are smarter than the market now and can time it? Why are you "not too optimistic about the market in 2014"?

I'm not trying to be a smartass, mean, or call you out. Questions like mine should be asked of 80% of posts ITT, IMO.

I am an attorney that works mostly with derivatives, securitization, structured products etc. My clients are large financial institutions (banks and hedge funds) so when my work slows down I look at it as in indicator of what's to come for the market generally.

It seems really weird to me that you would say that you are an investment noob in one post and then you reveal that you are an attorney that works with some of the most complex and sophisticated investment vehicles possible in the next post. But, I don't know what you do, so maybe you don't have to understand these contracts to do your job.

A diversified asset allocation is your best defense against a market downturn.

Knowing the mechanics of a credit default swap or mortgage backed securities or whatever has nothing to do with knowing about personal investment. I wish it did, though!

I understand I should be diversified but would you say that pulling out of equities completely would be overly conservative? I don't mind being 80/20 or whatever in my 401k but my personal investments could stand to be a bit more conservative, no?

I missed the part about needing money to buy a house from your previous post.

I would say that pulling all of your money out of equities would be a little too conservative but you certainly want to shield the money you are going to need for the house. There are really no easy answers here, short term yields suck and the bond market is as risky as the stock market,
IMHO. You can put some money at Ally Bank at .85% interest. You lose some ground to inflation but the principle is safe.

One option would be a life strategy fund:
https://investor.vanguard.com/mutual...ifestrategy/#/

icwudt

Yeah, which is why he gave a 3-8 month range instead of suggesting an inelastic figure.

Isn't it obvious that emergency is synonymous with liquidity? Where to hold is largely dependent on the person.

Maxing out 401k contributions will reduce your taxable income by almost $18,000.

all of this is awesome.

it's weird to talk about tax-free dividends when all of these are tax-advantaged accounts.

i haven't done a ton of reading on the subject but i believe that a strategy that seeks dividends is strictly dominated by a strategy that seeks to maximize total value.

some overall observations on your portfolio:

- assuming all of your money is for one goal -- retirement -- it's best to think of it all as one big bucket. this helps with tax-efficiency and keeping costs and complexity down.

- speaking of complexity, you own quite a few funds. slice and dice is fine (i overweight REITs and small cap value stocks) but you should be very clear on why you're doing what you're doing.

- i don't see fixed income/bonds anywhere. i like at least 10-20%.