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Commentary: (Mutual Fund) Investment advice for those just starting out...Brett Arends Article

beebee
edited November 2011 in Fund Discussions
Brett's advice to a 26 year old soldier looking to fund a Roth IRA.

Here is a broader version of this standard portfolio:

• 20% U.S. stocks — e.g. USAA Extended Market Index Fund USMIX
• 20% European, Japanese and Australian stocks — e.g. Vanguard Extended Market Index VDMIX
• 20% emerging markets stocks — e.g. Vanguard Emerging Markets Stock Index VEIEX
• 15% bond index (including U.S. Treasury bonds and corporate) — e.g. Vanguard Total Bond Market Index VBMFX
• 15% inflation-protected Treasury bonds (known as TIPS) — e.g. Vanguard Inflation-Protected Securities Fund VIPSX
• 5% commodities — e.g. GreenHaven Continuous Commodities exchange-traded fund GCC or the iPath Dow Jones–UBS Commodity Index Total Return exchanged-traded note DJP
• 5% precious metals — e.g. the SPDR Gold Trust GLD or Central Fund CEF, a closed-end fund that holds gold and silver.

The article link:
http://www.marketwatch.com/story/help-advice-to-a-young-naval-officer-2011-10-04?pagenumber=2

Comments

  • PopTartPopTart
    thanks bee : )
  • [Deleted User][Deleted User]
    It's unlikely a 26 year old has capital to fund an account with positions in all those assets. Just start with a broad index fund like SCHB, SCHD, SCHF. Others can be added as needed.
  • beebee
    Reply to @Anonymous:

    Hi ron,

    The article explains that at 26, this soldier had the where with all to accumulate $35K into his Roth IRA but being a product of the "credit generation" (remember the Pepsi generation?) he was clueless when it came to investing.
    We do a great job of teaching kids how spend their money...not so good at teaching how to save. Anyway, he was holding it all in a cash position at the time of his letter to Arends. Arends will follow up with a second article on the topic soon.

    By the way...I like your suggest... simple, efficient, yet; well diversified portfolio.

    I believe another contributor suggested something similar using Vanguard ETFs:
    VTI (1/3)
    VT (1/3)
    BND (1/3)
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