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What's your Roth invested in?
Old 07-14-2006, 08:27 AM   #1
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What's your Roth invested in?

Straightforward question.

What asset class(es) do you have in your Roth IRA? Small cap value, REIT, etc? Fund names also welcome.
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Re: What's your Roth invested in?
Old 07-14-2006, 08:30 AM   #2
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Re: What's your Roth invested in?

Hi,

What is the goal of finding this out? I don't have a Roth (can't), but have a rollover IRA with a bunch of different funds in it.

A variety of asset classes, that coordinate what's in my taxable account and my TSP account (fed employee).

I could answer, but I don't know if it would help you at all, since I don't know the purpose of the question. Are you looking for good funds, tax help, etc?

Karen
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Re: What's your Roth invested in?
Old 07-14-2006, 08:48 AM   #3
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Re: What's your Roth invested in?

I'm looking into setting up my Four Pillars-style diversified portfolio in the most tax-efficient way.

If I'm looking at the tax-inefficient portion of my portfolio - value funds, REITs, taxable bonds - it seems that in theory, I should choose the asset classes with the highest expected returns first for my Roth, since Roths are tax-exempt. Bonds would seem to waste the tax-exempt withdrawals of the Roth, and so would be better in a traditional IRA.

I'm just wondering if others are using this type of theory in practice.
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Re: What's your Roth invested in?
Old 07-14-2006, 09:12 AM   #4
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Re: What's your Roth invested in?

Kronk

My Roth is in VG Emerging Markets Stock Index - VEIEX

DWs Roth is in VG European Stock Index - VEURX

I also subscribe to the idea that Roths are where you put the high volitility stuff

JohnP
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Re: What's your Roth invested in?
Old 07-14-2006, 09:24 AM   #5
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Re: What's your Roth invested in?

Small caps at the moment. However its part of the whole portfolio. I dont consider my roth any different from my other accounts all part of the bigger picture.
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Re: What's your Roth invested in?
Old 07-14-2006, 09:24 AM   #6
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Re: What's your Roth invested in?

How would holding bonds in a Roth "waste" the tax-exempt status of the account? You should hold your least tax efficient assets in such an account, not the assets with the highest expected returns. Bonds and REITs are great candidates for a Roth IMHO.

Capital gains from equities, if held long-term, are taxed at a lower rate than your marginal income. However, distributions from bonds are taxed at your marginal rate, therefore they are less tax-efficient and should be held in a tax-advantaged account (such as a Roth or regular IRA).
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Re: What's your Roth invested in?
Old 07-14-2006, 09:28 AM   #7
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Re: What's your Roth invested in?

Our Roths consist of 5 mutual funds for each of us. Energy, financial, big-cap, health, emerging markets, international, etc. As you can see we're quite diversified.

Now that we're retired and DH's part-time job allows us to contribute $5000 each to our Roths each yr. we're depositing that money into CDs. (currently 5.35%) Our objective is to keep this money safe and in the event that we decide to pay off our mtg. (4.75%) we'll use this money for said purpose.

Disclosure--we have two very secure state pensions, along with 457 accts that are not currently needed.
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Re: What's your Roth invested in?
Old 07-14-2006, 10:15 AM   #8
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Re: What's your Roth invested in?

Because I anticipate a COLAd pension I do not have much in the way of bonds. Our Roth is in VG Asset Allocation (VAAPX), this fund is currently nearly 100% equities but can swing to bonds under certain circumstances. Other than that I have a Target Retirement fund in tax deferred.
The Roth would be good for big gainers, volitility or bonds as best they would fit into your overall portfolio.
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Re: What's your Roth invested in?
Old 07-14-2006, 10:18 AM   #9
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Re: What's your Roth invested in?

Quote:
Originally Posted by soupcxan
How would holding bonds in a Roth "waste" the tax-exempt status of the account? You should hold your least tax efficient assets in such an account, not the assets with the highest expected returns. Bonds and REITs are great candidates for a Roth IMHO.

Capital gains from equities, if held long-term, are taxed at a lower rate than your marginal income. However, distributions from bonds are taxed at your marginal rate, therefore they are less tax-efficient and should be held in a tax-advantaged account (such as a Roth or regular IRA).
My thoughts exactly. *That's why all my Roth (which is only about 3% of my total portfolio -- I *haven't been eligible to contribute to one for many years -- is in VGSIX *(a Vanguard REIT index fund)
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Re: What's your Roth invested in?
Old 07-14-2006, 10:18 AM   #10
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Re: What's your Roth invested in?

emerging markets (EEM)
commodities futures (PCRDX)
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Re: What's your Roth invested in?
Old 07-14-2006, 10:20 AM   #11
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Re: What's your Roth invested in?

Vanguard Lifestrategy Growth
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Re: What's your Roth invested in?
Old 07-14-2006, 11:34 AM   #12
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Re: What's your Roth invested in?

Quote:
Originally Posted by soupcxan
How would holding bonds in a Roth "waste" the tax-exempt status of the account? You should hold your least tax efficient assets in such an account, not the assets with the highest expected returns. Bonds and REITs are great candidates for a Roth IMHO.

Capital gains from equities, if held long-term, are taxed at a lower rate than your marginal income. However, distributions from bonds are taxed at your marginal rate, therefore they are less tax-efficient and should be held in a tax-advantaged account (such as a Roth or regular IRA).
Sorry if I was a bit confusing. This was assuming you have access to investing in both types of accounts.


For the sake of argument, figure that you've got a $10k Roth and a $10k 401k. Each of these accounts are tax sheltered, so growth of the account would be the same with identical investments. Now figure that over some time period, a stock fund would grow to $18k, while a bond fund would grow to $16k.

At retirement time, you'd be paying taxes as income on the 401k but not the Roth. So, you might have 2 cases:

Roth in a stock fund, 401k in a bond fund:
Roth is worth 18k - no taxes
401k is worth 16k - income tax on 16k

Roth in a bond fund, 401k in a stock fund:
Roth is worth 16k - no taxes
401k is worth 18k - income tax on 18k

So, you'd be better off using your Roth for the asset that is expected to have the higher return. That's all I meant. Bonds definitely should be in a sheltered area, but I'll leave them in my 401k/rolled over IRA accounts rather than my Roth accounts. Not all tax shelters are created equal...
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Re: What's your Roth invested in?
Old 07-14-2006, 11:46 AM   #13
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Re: What's your Roth invested in?

simple question, simpler answer: VTSMX
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Re: What's your Roth invested in?
Old 07-14-2006, 12:09 PM   #14
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Re: What's your Roth invested in?

NAESX - small cap index
VTSMX - total index
VGSIX - reit index

and <5% in a gas pipeline MLP (too much UBTI and it causes tax nightmares)
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Re: What's your Roth invested in?
Old 07-14-2006, 04:01 PM   #15
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Re: What's your Roth invested in?

Very Agressive, I am 29

Strategic Energy Fund - SEF.UN
ProFunds UltraBear Investor Class - URPIX
PALL Corporation - PLL
Gold Corp. - GG -
Merrill Lynch World Energy Fund -
Oppenheimer Real Asset Fund Class C - QRACX
Dow Jones Global Titans Euro -EXI2.SG-
Zurich Financial - ZURN.VX

I also trade options in my Roth and most people here think I am crazy and way too agressive.
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Re: What's your Roth invested in?
Old 07-14-2006, 05:01 PM   #16
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Re: What's your Roth invested in?

  • Vanguard REIT Index
  • Vanguard Small-Cap Value Index
  • Vanguard European Index (will be moving this to Small-Cap Value Index, and will start investing in it under taxable account since it has low turn-over)
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Re: What's your Roth invested in?
Old 07-14-2006, 05:12 PM   #17
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Re: What's your Roth invested in?

Vanguard Lifestrategy moderate.

Age 63 - to be tapped in case I don't die precisely at 84.6 - IRS single life expectancy calc. Not - psst Wellesley - but but what the hay - looking at maybe 20 years or more.

heh heh heh
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Re: What's your Roth invested in?
Old 07-15-2006, 01:20 PM   #18
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Re: What's your Roth invested in?

The short answer is "total international index".

The long answer is "what I wanted more of as a part of my total portfolio".
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Re: What's your Roth invested in?
Old 07-15-2006, 06:34 PM   #19
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Re: What's your Roth invested in?

50% DVY
50% SDY

Easy enough for me 8)
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