IRA asset allocation in 2014


As 2013 winds to a close, I am within a couple years of early retirement.My balances are where I need them to be, and Iím finally listening to the conventional wisdom that I should dial back the risk a tad and embrace bonds.Still feels like buying bonds is a guaranteed loser at this date, but commodities havenít done very well for me in the last couple years either.I had already moved out of oil-based commodities in the IRAs, as I have a fair amount of exposure to the energy industry in Master Limited Partnerships (MLPís) in my non-IRA accounts.

Since Iím using Schwab as a brokerage, I am primarily pivoting to their ETFs.These funds are low expense, and as a bonus they trade for free in the Schwab universe.

 

Here is what Iím considering:

 

 

Category

FundName

Ticker

Percent

Expense Ratio

US Equities 50%

US Large Cap Growth Stocks

Schwab U.S. Large-Cap Growth ETF (SCHG)

SCHG

10.00%

0.07%

US Large Cap Value Stocks

Schwab U.S. Large-Cap Value ETF (SCHV)

SCHV

10.00%

0.07%

US Small Cap Growth

SPDR S&P 600 Small Cap Growth ETF

SLYG

10.00%

0.28%

US Small Cap Value

SPDR S&P 600 Small Cap Value ETF

SLYV

10.00%

0.30%

ETF - REIT

Vanguard REIT

VNQ

10.00%

0.10%

Bonds 15%

Short Term Treasuries

Schwab Short-Term U.S. Treasury ETF

SCHO

6.00%

0.08%

Intermediate Term Treasuries

Schwab Intermediate-Term U.S. Trsy ETF

SCHR

5.00%

0.10%

TIPS

Schwab U.S. TIPS ETF

SCHP

4.00%

0.07%

International Equities 35%

Intl Equity

Schwab International Equity ETF

SCHF

7.00%

0.09%

Intl Large Cap Value

SPDR S&P International Dividend

DWX

7.00%

0.45%

ETF - Int'l Small Cap

WisdomTree International SmallCap Div

DLS

14.00%

0.58%

Intl Diversified Emerging Markets

Schwab Emerging Markets Equity ETF

SCHE

7.00%

0.15%

100.00%

0.22%

 

The result is very low expense with decent diversification and mostly free trades.I hung on to the Vanguard REIT in lieu of Schwabís SCHH, as the Vanguard just seems to perform much better, at least on a trailing basis.

 

Similarly, the Wisdom Tree International Small Cap Dividend Fund (DLS), while roughly twice the expense ratio of the roughly equivalent Schwab offering (SCHC) seems to earn that expense with markedly better performance.Since itís the largest slice of the portfolio, I didnít want a laggard.


2011 ETF holdings


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