My gf has 50k in cash that she'd like to invest. I'm trying to put together some investment ideas.

Country: Canada (Toronto)
Income: $80k
Timeframe for investment: 10+ years
Debt: None besides an upcoming mortgage

She's 29 and slightly/moderately risk-averse. She's willing to rebalance the portfolio annually, but doesn't want the constant "upkeep" associated with owning stocks. I've read a bit about the Vanguard three-fund strategy, but am unsure about the % allocation and which ETFs to go in given that:

- She's in Canada and intends to stay here for the long-term.
- The $50k will be transferred to a discount brokerage, either in a US or CAD account.
- New Vanguard ETFs are available for Canadians now, e.g. VUN as the Canadian version of VTI and unhedged to the CAD. As Canadians, do we prefer to be unhedged/hedged to the CAD? I need an explanation for this one.

ITT 5-years ago, someone suggested this breakdown, albeit it was for someone less risk-averse:

35% - Vanguard Total Stock Market ETF (VTI)
35% - Vanguard FTSE All-World ex-US ETF (VEU)
10% - Vanguard Short-Term Bond ETF (BSV)
10% - Vanguard Emerging Markets Stock ETF (VWO)
10% - Vanguard Mid Cap ETF (VO)

The investment landscape has changed quite a bit since 5 years ago so I'm not sure if these ETFs make any sense now. Thanks for the help.

I have 30k to invest and am looking at a 5 year time horizon. Below I have posted my current portfolio breakdown and would really appreciate any advice or feedback. Most likely looking to exit Pepsico+Cisco but not sure what my overall play should be.

12% - Cisco
12% - Pepsico
15% - Matthews Asian Growth & Income Fund (MACSX)
3% - Vanguard all world excluding US (VEU)
25% - Vanguard total market index (VTI)
6% - Pimco Multi Asset CL D (PGMDX)
27% - Cash

What are your gf's investment objectives?

Will she need cash soon for the house down payment or she has that already?

When is she planning to get married?

It's difficult to give a good recommendation without answers to these questions.

Disclaimer: This information is given for investment education only. It may not work for your specific situation. It is not investment advice, and I am not your investment adviser. You have to find your own financial adviser to get investment advice and help with your problem.

Why 5 and not 3 or 10 or 20?

Disclaimer: This information is given for investment education only. It may not work for your specific situation. It is not investment advice, and I am not your investment adviser. You have to find your own financial adviser to get investment advice and help with your problem.

Planning on probably heading to graduate school 5-6 years from now.

I would not have money in the market if I was going back to school in 5-6 years. School loans are what 6.5% or some crap? Capital preservation to minimize loans IMO

This.

How likely is she to do grad school? If she's not sure, then you have to adjust to that. If she's nearly certain to do grad school and she thinks she'll need the money for grad school, then I'd put the money in a CD ladder.

It depends on your credit tbh. My loans are 4.5% for private ones, and ~3.8% for the federal ones. They're pretty similar to a mortgage. It would be wiser to invest this capital and take the loans.

anddddd....$14.97 today. lol

Federal grad school loans are 6.21% right now

Yes, I see that, and don't forget that interest is deductible on income taxes so the actual rate upon graduation will be lower assuming the person makes money. That said the bulk of mine are private because they are way cheaper.

Those loans will also compound while you're in grad school making them far more expensive than they seem.

Strictly talking about grad school, there is a chance that person is going to be phased out of student loan interest deduction (60k - 75k for single).

Also, the maximum deduction allowed is $2,500 per year.

The tax benefits of student loan interest are not that fascinating. Similar to how I feel when people say they're going to buy a house because "LOL Tax deductions!"

I appreciate all the advice so far. However, I am not looking to invest in a CD. Over the next 5-6 years I will be saving an additional larger sum of money and am looking for a way to reallocate my current portfolio.

Well it's 65k-80k single based on AGI and 130k-160k married. These deductions, as well as some other common ones reduce your AGI. Additionally, the maximum being $2500 per year is irrelevant. The stafford loans are now fixed to the 10 year+a bps spread and the max someone can borrow is $20,500/year ($41,000 for the typical 2 year masters program.) Any amortized max loan at these rates will fit within the interest deduction below the $2500 cap.

That said, yes I agree about the tax deduction not being at all relevant to decisions such as this. I'm just stating why interest rates for student loans are incredibly low and should be taken advantage of. The 4.5% mine are at are only about 40 bps higher than a 30 year mortgage rate. Anyone following the wiser approach to investing would suggest you keep the loan and invest what you would have used to pay it down faster.

For 2013, the phaseout was from 60-75k for single; 125-155 married.

The government doesn't allow you to factor in the student loan interest to calculate your modified AGI (MAGI). A fresh graduate is pretty much going to have Wages - any 401(k) contributions - any pretax benefits = MAGI.

I'm nit picking but I like to make sure people know the whole story

Well if we're going to nitpick an even more important point is that the interest was also only 5.41% in 2013, but we're also not talking about loans from 2013, hence it is 65-80k now for the deduction now.

Didn't see the 2014 numbers on the IRS site, but looks like that is the case

I called the federal student loan people once before to ask them to lower my 6.8 interest % and the girl laughed in my face. Talk about some predatory capitalism, the entire education system is ****ed up when the student loan market is LARGER than the housing market.

Yeah student loans are a scam. Thank God I rid myself of those last year.

Why didn't you just borrow money from your parents?

I wish that was an option at the time, but it wasn't. So it was either borrow loans or don't get an education, it put me in a tough spot.

You can consolidate those 6.8% loans into a better rate assuming your credit is good. They won't just lower it because you ask, you'd have to apply for the reduced rate via a separate loan. If you can't qualify for a lower rate because your credit isn't good enough, why would you think you deserve the lower rate in the first place?

Sorry that was a bad Mitt Romney joke.

I have perfect credit. I don't see anything like that on the website, would you mind pointing me in the direction of it? I'd appreciate it greatly. How big of a % reduction are we talking about?