Maybe a +5% shift in the stock allocation to take on more risk.

The idea that we can protect a portfolio from loss is why many people are sold on the idea of Index Deferred Annuities. We can never be sure that risk of loss is limited to some percentage. The only way to provide some level of protection is by diversifying investments between type of stocks (large vs small, foreign vs local) and bonds (short, medium and long term, treasury) and cash.

Consideration to add in short term bonds might be in order (5-10% of bond allocation to VBISX) to provide an additional level of principal protection. VBISX barely budged during the crash of 08/09

Ok, kind of a theoretical question I have.

I'm going to max my IRA contribution and put in 5k this year.

My brief background - I'm a 21 year old business student at Indiana university. I'm unsure of my future income (30-130k?). Risk tolerance is fairly high 8/10... I'm a gambler at heart but obv looking for +EV always. Timeframe- my funds will be in my IRA account for another 40 years.

MY current investments-
My portfolio of stocks, is diversified containing all equities (some ETFs). It has about $75,000 in it.
My traditional IRA has about $25,000 in it. About 11k worth is large cap high dividend equities. $10,000 is in VFFVX (2055 vanguard retirement fund, 90% stocks, 10% bond current allocation). $3500 is in vanguard short-term bond fund.

Ideally, I'd like to maintain an OVERALL 90% stocks/10% bonds ratio out of of all my $100k invested. Right now I only have $4500 total in bonds out of 100k invested (1/10 of VFFVX and the 3500 in short term bond fund).

Now my question - (1)Should I put my 5k contribution this year in all bonds to help reach that 90/10 ratio (do you agree with 90/10?)

(2) Lets say I have that 5k in my vanguard account but haven't invested it yet. Is there any reason to lets say, add $200 to both VFFVX and the bond fund EACH month instead of all at once? When should one "dollar-cost" average?

(3) I know this may speculation on your part, but would you be more comfortable buying an aggregate bond index or short term bond index now? Personally, I feel interest rates have nowhere to go but up thus my choice in choosing Short-term bonds. I'm open and looking for other opinions though.


Thanks for all your help here in this forum nuclear

Being young and, for now, having a higher risk tolerance I think 90/10 is fine. Some people go with age in bonds, sometimes age - 10 is more appropriate especially at a younger age with a lot of time to recover from any stock loss.

Deciding whether to DCA is a personal choice that involves determing your risk level as well as comfort level. Lump sum investments see considerable amount of money leaving your cash account - that can be a tough pill for some people to swallow. My opinion is that if you can afford to lump it is often the better option - it gets the task done and out of mind - whereas you can cancel a DCA and lose track of your investment goals. DCA reduces risk by buying less when the price is high, but it also means you have a lower expected return compared to a lump sum investment - unless you happen to lump right before a market fall

As for the lump into a bond fund - if your comfortable with where the other investments are and its just to get to a desired AA ratio, the decision is fine.

Sticking with short term doesn't hurt, though you could consider the regular Total Bond Market. I don't think it'll get routed that much and it is an income fund, so being young it has plenty of time to recover from a rise in rates - plus (if you do) automatic reinvestment of the bond income eventually the cost basis will average down and increase the yield.

Country of residence: Canada
Income: N/A
Risk Tolerance: Low to moderate, anything below a 4 on a 10point scale if that helps
Time frame: 1yr+
Debt: None
Additional info: Poker player with no real bills, looking to invest money on stuff besides the fish options. Prior to this year, I did basically all GICs and now, I'm just throwing them into random mutual funds as the GICs mature. Currently, I am toying with the idea of buying AAPL but honestly, I dont know if thats a good option or if there are better options.

Thanks nuclear - you're expertise is appreciated. I hope to have the knowledge to share that you do one day

Anyone ITT focused on the Swedish stock market and high risk investments?

I'm very interested in companies like Pilum, Sensodetect etc. And also clean-tech and other related investments. These are high risk high reward companies. I might be a bit naive in thinking someone very knowledgeable about these subjects would exist itt. But if you don't ask the chance will surely be 0%

Hi. I have 50k that Id like to set aside for income taxes next year. Rather than it sitting in around, id like to make some interest with a low to moderate risk (doesnt have to be a no risk type thing, i would be OK if I lost some of it in the corse of the year). I looked into CD options at my bank and theyre less than 2% interest. Are there any better options for me? would opening an Etrade account and investing in some companys that have been around for a long time be a good choice?

*I know nothing about investing, so explain it to me as simply as possible if you can. Thanks in advance.

No. Since this is money you know you will need, you can't afford to not have most of (or all of it) be protected. You say you're okay to lose some of it - but how much, really?

Since you don't actually know what you will pay for taxes, you could afford to take a small bit of risk with market exposure. At most 20% in Vanguards Total Bond Market or Short Term Bond Index or the Short Term Investment Grade Index.

If you're determined for stock market exposure, I suggest Vanguards Balanced Index. Its 60/40 stock/bond. It lost ~1/3rd during the crash of 08/09 unlike stock indices which tumbled 50%

Use Admiral Class shares.

Be aware that you'll still have to pay taxes on any earnings in these funds when you cash out.

But really, any money you know you absolutely will need, it should stay in cash or if short term availability isn't necessary then a CD.

Thanks for the reply.

Im looking through the suggestions you gave me on vangaurds website now, and they look like some good options

I am a 20 year old 3rd year undergraduate student at UCLA. I've recently started to move up in stakes and have about 20k of liquid money. I don't really no much about investing or have plans to, but was wondering what kind of planning I should do for the future with my finances.

I can expect to make presumably about 75k-100k this year from poker while being a full-time student, but not sure what I should do with this. It seems dumb for me to just have this kind of money sitting around.

Some interesting side points, I have about 15k in student loans that I took out in my first 3 years of undergrad. Interest doesn't accrue on this until 6 months after I graduate (over 18+ months away) so it would be okay to not pay it off until I have to right? Also, I am planning to attend medical school after taking 1 year off after graduation. I'm not too sure how I am going to be paying for this and will likely have to take out loans. I was wondering if it would be dumb to take out low interest loans while investing my poker money and paying off the loans later.

Keep those student loans, their 0-low interest rate should be much lower than the potential gain you would get investing the money(opportunity cost). You also get a tax break on the interest you pay on those loans making the effective rate even lower.

Location: United States
I'm 26 I have 30k to invest. I really don't know anything about investing. I'd be ok with moderate risk. I have about $1200 dollars per month in bills+expenses. Have about 150k net worth right now. Will need a lot of cash for when WSOP comes around and do there is a lot of variance to my cashflow as I play PLO mainly. With these figures do you think 30k is a good number for investing and what would you recommend. Thank you

[B * Country you live in: US
* Age: 25
* Income: 80K full-time job + 50ish poker
* Risk Tolerance: medium
* Timeframe for investment:1.5-2 years
* Amount to invest: 50-130k
* Debt: zero[/B]

Have 130k sitting in a savings account that earns nothing. CDs expired and I'd rather not go that route again. Set up an ING savings that earns 1% APY and was planning on moving all the money there, but would like to consider other options. Would you advise putting the majority in ETFs? Dont have time to actively manage the money and am looking for a balanced buy/hold strat for the next 1.5-2 years. Plan on going to business school in 2012 so will need access to this money buy than.

Probably worth noting that I Live in NYC and have about 3-3.5k expenses per month. In other words, I don't save much from my full-time job.

Thoughts?

Thanks for your time/help

I am self-employed, with only poker as an income. I max out my IRA each year, and am wondering if there is another way to invest with a tax advantage? Right now I have both my Roth IRA and regular account 100% in an S&P 500 index fund. I don't plan to do a lot of trading, and am fine investing in the index fund, just wondering if there is a different way I can do it to gain some kind of tax break, government subsidy, etc.

Open a 529 plan. http://www.scholarshare.com/ and start socking away extra money from poker. You won't have to pay taxes on what you withdraw as long as its used towards education.

The amount you want to invest is up to you. You've come up with the figure as that is what you feel comfortable with. We really can't tell you what amount you should or shouldn't invest.

I would recommend you consider either the Vanguard Balanced Fund (VBIAX) with all $30k (this is split 60/40 US stocks/bonds) or 2/3 in VTSAX (Total Stock Market) and the other 1/3rd in VBTLX (Total Bond Market)

I would first establish an emergency fund. Make sure you have 6-9 months of expenses put aside in a savings account in the event your income stops.

So figure $30k, so that knocks it back to $100k.

With a Real Short term timeframe in mind, unless you really want exposure to stocks, you should consider bonds only in order to preserve as much principal as possible (in the event things go south with the economy). Otherwise I would recommend the same as the above poster - The Vanguard Balanced Fund (admiral class shares) VBIAX.

nuclear,

thanks for the recommendation. is there any reason why majority go with vanguard for etfs/funds? is there something that they offer that other brokers don't (besides possibly larger selection of funds)? what kind of return would you guesstimate with that fund for one year, assuming no major unforeseen events?

The big reason is costs. On average, Vanguard has the lowest expense ratio for all of its funds compared to similar funds from other providers. For example two similar funds. One charges .75% and the other .25% - after 30 years of identical growth the lower expense ratio results in 16.25% more in the cheaper fund. (Vanguard Balanced vs Schwab Balanced, both are roughly 60/40 stock/bond)

Second is familiarity. Fidelity and Schwab both have similar type funds but I am not as familiar with their offerings.

Third - simplicity.

Being in the game of guessing performance isn't my thing, if it were, I likely would be a millionaire already However, I'd guess it'll trail the S&P 500 by 3-5% going forward - but on market slides it'll outperform and hold more value.

I am a 23 year old living in the US. As a gift for graduation my parents put $2,500 in a traditional IRA account at my local savings bank. The interest is pretty much nonexistent.

My risk tolerance is moderate.

I am wondering what to put it into and what are the ways that I can transfer it while limiting the penalties of moving it.

I would move it to Vanguard, keeping it as a Traditional IRA to avoid taxes, and put it all into the Vanguard STAR Fund (VGSTX). The minimum of the STAR fund is $1000 - all others are $3000. While you could open a Traditional IRA brokerage at Vanguard and split the money up amongst various ETFs - I think starting out the STAR fund is perfectly fine. With the no commission trades on Vanguard ETFs at Ameritrade and Vanguard you could build a more widely diversified portfolio - but I think its overkill with such a limited amount of money.

For most 23 y/os wouldnt a roth be better?

Roth's are better all around. He'll have to pay taxes on the conversion - if he's alright with that then sure, he should do that.

22 year old In United States. 0 debt

I have 12k sitting in a Self Directed IRA with Etrade and it's all been just sitting in money market account for about 10 months :/. The IRA was created for tax reasons and it was supposed to be used by me for practice trading/investing but I've just recently got into studying that and obv not ready for real $ trading yet.

So looking for something to stick the $ into until then(could be 2-6 months before I'm ready to start buying stocks/managing the $). I've heard about low cost Idex funds, is that a good idea and if so which ones? Once I find a good fund/stock, should I put 100% of it in there until I develop my own stratagies?

Thanks

Will also be adding probably 4k-12k more into it this year