Rate my portfolio - I'm 42 and have a high tolerance for risk?

Question

US Large Cap- VTI (0.07 expense ratio) - 15% of my portfolio
US Inflation Protected Bond - STIP (0.20 expense ratio) - 5% of my porfolio
Foreign Inflation Protected Bond - WIP (0.5 expense ratio) - 5% of my portfolio
Foreign Emergening Markets Bond - PCY (0.5 expense ratio) - 5% of my portfolio
Foreign Developed Large - FSIIX (0.10 expense ratio) - 20% of my portfolio
Foreign Small Cap - VSS (0.40 expense ratio) - 6% of my portfolio
Foreign Emerging Markets - VWO (0.27 expense ratio) - 5% of my portfolio
US Small Cap - VB (0.14 expense ratio) - 11% of my portoflio
US Mid Cap - FSEMX (0.10 expense ratio) - 14% of my portfolio
Commodities - DJCI (0.5 expense ratio) - 5% of my portfolio
US REIT - VNQ (0.13 expense ratio) - 5% of my portfolio
Foreign REIT - VNQI (0.35 expense ratio) - 4% of my portfolio

Answer 1

While I fully support your diversification, this portfolio does not have the risk reward ratio of someone with a high risk tolerance. A larger investment in foreign small caps and foreign currency would yield a larger risk reward ratio. Russia and Canada seem to have the most potential, yet do as you will.



Overall I would give it a 8, The diversification play is a choice with the uncertainties of the future.



Best of luck.

Answer 2

Very good overall, but a couple of comments. TIP bonds are overpriced right now, and don't really pay any decent dividends. I would suggest BND and VCIT for Bond ETFs. Second, your funds seem to be selected primarily on the basis of expense ratio, but the ultimate criteria should be performance; Check out some of the ETFs from Guggenheim, Powershares, Wisdom Tree and others. Morningstar is a good place to do research. You might want to consider some stocks or ETFs with higher dividends, like CVY, DES, DEM, DGS, and others. Finally, if you're not risk-averse, you'll want to add some strategic stock holdings, when you see a good company at a good price. Selecting stocks takes a lot of research, knowledge, and experience, but it can pay off, especially in a bull market like we're having now. In a bear market, it's better to stick with indexes, or stay out altogether. The Motley Fool has some good stock newsletters, and Morningstar premium research is worthwhile also.

Answer 3

If I were you, I would first start funding a retirement fund. That should be first and foremost. Mutual funds can be a good investment, but you really have to know what to look for. About 75% of them under perform the stock market, all have management fees, and some have sales loads. When you look at a mutual fund, look at its annual return for the past 10 years. Look at its management fees. And also, be sure it does not have a sales load. All the things I have just described is why I seldom purchase mutual funds anymore. One option you might consider is a DRIP Plan. They are seldom talked about because brokers make very little money when they suggest them. Yet, they have proven to be one of the best, if not the best, long-term strategy on Wall Street. You can use solid Blue Chip Companies like US Bancorp, General Electric or Walmart and still get generous long-term returns. They are perfect for small investors, as well as big investors. They are safe and allow you to not care about whether the market is going up or down.

Answer 4

Very busy, with a lot of little niche investments. Not how I would build a portfolio. But you're the one that needs to be happy with it. I'd give it a 6 on a 1 to 10 scare. Go to morningstar & do an instant x-ray on it.

Answer 5

Whatever I said, you would need to do the opposite. I entered a contest (not with real money) with CNBC. I did very well, but because of the uncertainty and previous losses, I was too chicken to invest real money in my play portfolio. If I had bought when the bottom fell out I would be rich. I kept listening to the bears. Wish you well with yours!

Answer 6

Good to see you have REITs, I think this sector will outperform market in next quarters.



(In my opinion) your holdings -- too diversified. I'd combine foreign-small and foreign-emerging (only hold foreign-emerging). I'd cut bonds from 15% to 5% and only hold foreign-emerging bond. The 10%, I'd distribute equally between foreign-developed-large and Us-mid-cap.

Answer 7

Nice... I see that you are buying ETFs. Just hope you're using TD Ameritrade since they offer commission free on 100 ETFs. Have you thought of buying JNK? They yield at leat 8% and they pay out dividends every month not quarterly.

Answer 8

Your a bit to spread out.

Dump the bond holdings.

Invest more in US and foreign stocks.