June 2006 Retirement Portfolio / Cash Snapshot

In addition to my monthly net worth updates, I’ve decided to also take snapshot of my investing portfolio and my overall asset allocation. I want to also track any fund or ETF purchases so that I can better calculate my actual returns over time.

I haven’t decided whether to do it monthly or quarterly, but here’s my retirement portfolio as of today:

Retirement Portfolio
Fund $ %
IVV – iShares S&P 500 Index ETF $9,500 15%
VIVAX – V [Large-Cap] Value Index $11,700 19%
VISVX – V. Small-Cap Value Index $12,000 19%
VGSIX – V. REIT Index $7,100 12%
VTRIX – V. International Value $6,500 11%
VEIEX – V. Emerging Markets Stock Index $5,900 10%
VFICX – V. Int-Term Investment-Grade Bond $7,100 12%
BRSIX – Bridgeway Ultra-Small Market $1,900 3%
Total $59,800
June Fund Transactions
None.

I also decided, after meaning to do it for a long time, to track my “what I could come up with in 24 hours” cash balance as well as my current metric of “non-retirement” funds for my Mid-Term goal. This Liquid Available Cash is a better measurement of how much money I could put towards a house down payment as it removes things like my 0% balance transfer money, and my car equity. My small individual stock portfolio is included because I would just sell them as needed.

Right now, I’m just putting down my best estimate.

Liquid Available Cash $25,000 (est.)

Thoughts

The stock market overall ain’t doing so hot. I wish I had more money to dollar-cost average, but I think I have already put too much money into retirement and have neglected my cash needs. I am going to keep most of the money I make this summer in cash accounts and hopefully pump up that $25,000 number a bit.

I am also considering moving my IVV S&P 500 ETF holdings, which are currently in a taxable account at Scottrade, to a Self-Employed 401k (administrator unknown). Since they are currently at a loss, I won’t have any capital gains tax to pay if I sell and I’ll just need to find an appropriate ETF to avoid wash-sale rules. I’ll also be able to harvest some tax losses.

Comments

  1. I have a comment about Tradeking. Many years ago, I used Ameritrade and when I sold shares, I always used to get the best price (according to real time) but lately when using Tradeking, my selling prices are way below the real time quote…..

    Could it be possible that Tradeking does not have a mechanism to get the best price out there in the market when you are trying to sell/buy shares?

    If I am not wrong, Ameritrade gets you the best price.

    Example: I just sold WPO…real time quote said 782.50 but the price I sold it for was 780.00

    Does anyone know if online brokerage companies have the ability to sell at the best market price as mentioned above?

  2. you are way to split up and not nearly invested enough overseas.

    You are right the market is not so hot right now- which means its the perfect time to buy!! (Unfortunately for me, I have no cash until August)

    I know lots of traders and lots of high powered investment bankers…and like buffet, they are going overseas. Long term trends for the US economy are not so hot. The world is changing and in this new world, the US wont be #1. You should consider investing about 40% of your portfolio overseas, especially if u are buying for the long term.

    owning the S&P fund is not needed because ur are gonna have a lot of overlap with the large value and forgeign value funds. Additionally, there is no reason to own any type of bond fund at your age. I bet you also have overlap between bridgeway and the vanguard small value.

    If I were you, I would sell the bond fund, the s&p 500 fund, and the vanguard small cap. I’d buy a mid cap blend fund, add more money to the bridgeway, and more money to the emerging markets and international value. Though emerging markets have took a hit, the economic fundamentals of all of those areas are still strong.

  3. Setting up a SEP with Vanguard was about as easy as breathing. Just an FYI :)

  4. Though I’m buying a house this summer, I envy the size of your retirement account at your age. I have a 401k and a Roth but I have only worked for 2 years, and my fiancee just started a Roth last year as a grad student, there’s only so much we can do.

  5. I know lots of traders and lots of high powered investment bankers…and like buffet, they are going overseas. Long term trends for the US economy are not so hot. The world is changing and in this new world, the US wont be #1.

    Some such as Bernstein and others have said that investors shouldn’t expect the high historical returns of the past. They also say return is intrinsically connected to risk. So, the only explanation I can reason is that the risk will go down and therefore one must seek other more riskier investments in hopes of higher returns.

    I don’t see why a more stable, less risky US economy would spell doom for the country. Will US stocks become the “bonds of stocks”? I really don’t see any other way to reason lower returns. Investors demand to be compensated for commenserate risk.

    Also, the other week I calculated that at the constant rate of current growth of GDP, China wouldn’t match the US economy until about 40 years from now. And that’s keeping their GDP growth rate constant, which will surely taper off over time.

    It seems people paint such a rosey picture of international investments while failing to put the whole picture into perspective. Smells of a boom. Recent returns might agree with me. And where there’s a boom, there’s a bust.

    For what it’s worth, I own 30% VGTSX. [fixed 'won' to 'own' - Jonathan]

  6. Jay-

    Im gonna bet with the wizard of omaha on this. Im not just talking china here, Im talking to eastern europe, asia, india, the mediteranean. while booms do lead to busts, im talking over the long term these countries will do better.

    thats not to say “us stocks” wont do good but most of the best performers are big mulitnational firms.

    why don’t i think the us is the best bet over the long run? crappy currency, high twin deficits, high consumer debt, and a low savings rate. and given the growing government social obligations and the enivetable high taxes that this is going to entail, along with a crappy education system that doesnt educate the youth of today for the world of tomorrow, within 10-15 years, this country is not going to be #1. its a slow decline.

    you know what country has the best cell phone network in the world? mongolia.

    when you come on the playing field, u can use all these advantages quicker than a country like the US can.

    I bet against the US and until our politicians start arguing about real issues instead of homo marriage and flag burning and cut and running, im going to continue to bet against us.

    Just one mans opinion.

  7. Matt,

    why don’t i think the us is the best bet over the long run? crappy currency, high twin deficits, high consumer debt, and a low savings rate. and given the growing government social obligations and the enivetable high taxes that this is going to entail, along with a crappy education system that doesnt educate the youth of today for the world of tomorrow, within 10-15 years, this country is not going to be #1. its a slow decline.

    It’s not like things are completely peachy in China. There’s the 4-2-1 problem for them. 4 grandparents and 2 parents will be supported by 1 working child. Unlike many other countries, the US won’t suffer from a population decline in the coming years, which is a major component of the GDP. Not to mention the legal, democratic, and capitalistic systems that have been in the making here for several centuries. Those will not come overnight. Certainly not in 10-15 years.

    Regardless of how many engineers China or India churns out, the fact is we still produce the best ones. We still have more of the top universities in the world than any other country.

    I bet against the US and until our politicians start arguing about real issues instead of homo marriage and flag burning and cut and running, im going to continue to bet against us.

    I completely agree. The theocracy took 40 years to build, but it is quickly crumbling beneath their feat. I have hope that things will change before it’s too late.

  8. Wow! This is an incredible discussion!!
    I’d like to compliment everyone.
    What a topical discussion.

    Has anyone read Jeremy Seigel’s recent writings on fundamental value – he had an editorial last week in the journal.

    My thoughts are that growth will accelerate globally, though not necessarily in China alone. Globalization is a long term trend that will benefit other countries besides the US. So I expect foreign investments to grow on the long term. Of course EEM and such not will be riskier since their legal and political infrastructures vary in maturity.

    As far as small cap value, I’d recommend keeping it for the long time. I talked with a pension fund manager yesterday and he told me they were deemphasizing small cap for international, however, I agree with Siegel’s argument about small cap value – that over the long term it will outpeform most domestic investments.

    You need to keep some domestic large cap in order to maintain a diversified portfolio mix. So I’d be careful about how you disinvest.

    I’m leary about China as a specific country, but do have investments there myself. China has not yet managed to have effective rule of law. The vast number of corrupt / non-performing loans in China is vast and had been covered up by government and the banks. Eventually problems like these will have to be purged and in the process either eliminate shareholder equity or require government bailouts. Japan had a similar but I think smaller problem in the 80s/90s with real estate loans.

    In spirit, I like some of what Sri has said. But, I’d keep the bond fund, you need an alternate asset class to equities.

    I might trim the s&p 500 and large value a bit and put more of it into international.

    I’m very split about reducing the small cap and movign it to mid-cap. If you want to buy and hold, I’d keep it where it is. If you want to dynamically sector allocate – i.e. trade sectors, then I’d consider adding midcaps, but it’s not really my style – is it yours?

    Regards,
    makingourway

  9. do you own the bridgeway fund through a broker? Because I think the fund minimum is $2000 to open directly with bridgeway.Would u mind letting me know which broker u use for bridgeway? I cant afford the 2000$ min but i would like to invest in bridgeway funds as i have heard really got things abt it.

  10. I opened with $2,000 at Bridgeway. It dropped…

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