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Old 06-08-2012, 11:35 AM   #1
Confused about dryer sheets
Join Date: Jun 2012
Posts: 4

Hi All,

I've lurked for a while and figure its time to actually join the community. My wife and I do a pretty good job saving but I would love to hear any advise that anyone has. Now that our balances are getting higher I'm trying to figure out the best diversification strategy. Right now we're simply using target retirement funds and I'm sure we could do a better job.

Our Ages, 28 and 31

My TSP: $21k
Her TSP: $82k
My Rollover IRA: $114k
My Roth IRA: $5k
529 (for kids): $10k
Emergency Savings: $50k

Our only liability at the moment is a student loan at $25k that we're focusing on paying off quickly.

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Old 06-08-2012, 12:28 PM   #2
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Join Date: Jan 2008
Location: Chicagoland
Posts: 10,661
Welcome aboard. There's nothing at all wrong with investing in target retirement funds, most people who don't want to bother with investing would be better off with target funds instead of buying various funds for sketchy reasons (misc hot tips from TV, magazines, brother-in-law, neighbor, co-worker, etc.).

You really don't need to make it complicated, the next logical step for you is a lazy portfolio, most hold anywhere from 3 to 10 funds representing different asset classes. Here's a primer from a good resource IMO...Put Sloth to Work for You - Registered Investment Advisor. You'll find many here have (large) portfolios that are 10 funds or less, even though they've been investing for decades. Unless you want to be a full time investor, there's no need to get more complicated.

And here are examples of a few other lazy portfolios MintLife Blog | Personal Finance News & Advice | The Lazy Portfolio: Asset Allocation Made Easy
  1. No reason to rush into anything, you're fine with target funds until you decide how you want to proceed.
  2. Some people make the mistake of building lazy portfolios in each of their accounts, that's not necessary or ever desirable. Once you choose the asset allocation and specific funds you want to hold, you can place them for tax efficiency. Most people would hold equity funds in taxable accounts and fixed income in tax sheltered accounts for example, though it appears your accounts are mostly tax sheltered.

No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
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Old 06-08-2012, 08:39 PM   #3
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Join Date: Apr 2006
Posts: 9,214
Welcome aboard. I second Midpack's suggestion that a target retirement date fund is fine for now. As you learn more, you may want to take a more active approach, but if you never do, you should be fine. You've already saved a quite a bit for people your age. Keep it up.
Living an analog life in the Digital Age.
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Old 06-09-2012, 04:25 AM   #4
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Join Date: Sep 2007
Posts: 15,360
I'm very impressed with how much you have already put away at 28 and 31. Keep it up!You

I'm sure DH and I would have used target retirement funds had they been available in our plans way back when.
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Old 06-09-2012, 11:59 AM   #5
Confused about dryer sheets
Join Date: Jun 2012
Posts: 4
Guess we'll stay the course on target retirement funds for now. I appreciate the advise and hope that I can help contribute to the forums!
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Old 06-11-2012, 12:57 AM   #6
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Join Date: Sep 2010
Location: midwestern city
Posts: 4,062
Welcome to the forum.

Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
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