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CNBC Retirement plans
Old 04-18-2013, 01:15 PM   #1
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CNBC Retirement plans

Anyone else catch Bob Pisani's segments on CNBC regarding retirement potfolios for 30/50/70 yr olds using ETF's? The one for 50yr olds is here-
CNBC ETF Retirement Portfolio -- Target 50-Year-Old

Have not worked my way through all the individual holdings but it seems like an overly complex plan by committee. Doe one really need 17 different ETF's for adequate diversification?
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Old 04-18-2013, 01:57 PM   #2
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I think once you get beyond 5-6 equity asset classes, additional holdings produce rapidly diminishing returns in terms of diversification and noncorrelation. And if you don't include "alternative" equity classes such as real estate and natural resources, you might not even need that many.
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Old 04-18-2013, 02:22 PM   #3
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Old 04-18-2013, 02:27 PM   #4
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There are just too many funds here and obviously they are all ETFs as that's what is being pushed here......it's scary that someone might come to the article and just say "I'll copy this exactly" and then end up trying to track everything and trading too much and racking up fees. Also maybe ETFs aren't the full picture, would mutual funds be a better vehicle, would an SPIA be appropriate, maybe some CDs etc.
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Old 04-18-2013, 02:53 PM   #5
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There are just too many funds here and obviously they are all ETFs as that's what is being pushed here......it's scary that someone might come to the article and just say "I'll copy this exactly" and then end up trying to track everything and trading too much and racking up fees. Also maybe ETFs aren't the full picture, would mutual funds be a better vehicle, would an SPIA be appropriate, maybe some CDs etc.
+1 To be prudent, one should read prospectuses, annual reports, etc. and I can't imagine anyone doing that with this mix.

That said, I'm guilty of not reading all of mine and I have a much simpler mix.
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Old 04-18-2013, 03:03 PM   #6
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Way more complex than needed IMO I wonder what the weighted average ER is.
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Old 04-18-2013, 03:32 PM   #7
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Way more complex than needed IMO I wonder what the weighted average ER is.
I looked at some costs for the biggest holdings and they were 0.2%ish, ok but there's trading to consider as well.
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Old 04-18-2013, 04:05 PM   #8
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Not something I would recommend for someone starting out or wanting something simple. And an experienced investor would probably have something different in mind. So the target audience seems rather limited to me. However, my portfolio has even more funds in it.
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Old 04-18-2013, 07:39 PM   #9
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17 ETFs in a portfolio is way too many. You get overlap from that many which is not necessary, plus you have to consider brokerage costs of buying those. I use 5 iShares Index ETFs in my portfolio through Fidelity and do not pay brokerage costs. Fidelity has an arrangement with iShares whereby they are able to offer 65 ETFs free of trading cost; it's a great setup.
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