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Oh boy! What am I gonna buy?!
Old 12-12-2009, 12:22 AM   #1
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Oh boy! What am I gonna buy?!

This is one of my favorite times of the year with NCAA football bowl season coming up, and holidays, and vacations and all. But a big thing Im looking forward to; is 2010 Roth IRA contribution time.

Im not big on DCA into my Roth, so after my projected hangover on the first of January, the next thing on my to-do list will be to dump that 5k into my retirement, and purchase an index fund. I still havent decided which one, but thats the fun part.

Right now Im shopping. I worked hard to save my 5k for this project, and now Im almost done waiting, and I get to spend. Spend like a trophy wife! I dont know what to buy. It all looks so good!

I like Vanguards total stock Market Index, but I already own that in a taxable account. I may add to my VFINX position, but I think I may have enough exposure to large-caps. What I need are small & mid caps, and anything foreign. Maybe an emerging markets index fund. Or maybe Ill go a totally different route, and buy a REIT or commodities index, ETF or ETN. (I dont know if there are any commodities indexes?) I could always use more bonds, maybe some TIPS. I still dont own any target retirement funds. Maybe Ill look into those. It all looks so good! I want them all! Im so excited! Hopefully the market will stay low for me, going into 2010.

What about everyone else? What are you gonna buy?
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Old 12-12-2009, 12:24 PM   #2
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I used the Asset Allocation tutorial to decide what I want to have in my retirement accounts. My target AA is 70% fixed and the other 30% split more or less evenly between stocks and REITs. Over the last several months I have gotten as close as I can. I just did an instant Xray and I'm now at 62% bonds & cash and 38% equities, of which 12.8% is REIT index fund.

All the money in my tax deferred account is in VTINX, and that's the next thing I'm going to buy (automatic deduction from paycheck). The next thing I'm going to buy in my Roth IRA is probably more TIP. I need to figure out how to set up that account so when my automatic deposit comes in, it automatically buys more TIP until I get my total bonds up to 70%. Unfortunately this account (at Scottrade) won't let me set up automatic payments for 2010 until after the first of the year. Maybe I can set it up to be sent automatically from my checking account rather than pulled from the other end.
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Old 12-12-2009, 03:27 PM   #3
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Unless something unexpected happens, I won't be contributing to my Roth again until late next summer.

Although I'm doing pretty well on all my goals, I've decided to focus on one at a time. Roughly it will be as follows:

1. Restore emergency fund to 6 months of expenses including income taxes. Probably will add to my taxable account at Vanguard in VFINX. Probably will reach my goal around February 12th, 2010.
2. Up retirement savings again to target nominal FIRE at age 45. Probably will add to my 401k at work; will likely max that out mid-August, 2010. That's in Fidelity's FUSEX fund. After that, I'll contribute either to my Roth (VTSMX) or traditional (VFIAX).
3. Work on kids' college funds to target 4 years at a public university. They're at Vanguard (mostly VTSMX) and in my state's 529 plan (one of those age-based allocation funds).

Simple and boring but it works for me.

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Old 12-12-2009, 04:02 PM   #4
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I'm trying the 1 thing at a time too. I don't know if I have the patience for it... Hoping to sell my truck to fund my emergency fund, then I can ramp up savings.
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Old 12-12-2009, 04:21 PM   #5
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REITs, I don't have any, and it is a good time to buy. I need International too, but I am waiting for the dollar to strengthen first.
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Old 12-12-2009, 05:13 PM   #6
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I'll be topping up short term international treasurys.


But like the OP I always send the checks in right at the beginning of the year. I only DCA when I have a large amount to add to my AA.
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Old 12-12-2009, 05:15 PM   #7
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I'll also send in another 10k to the little one's 529 (the maximum I can deduct from my state taxes). I like to get it all out of the way.
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Old 12-17-2009, 11:14 PM   #8
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I think Id like a REIT. Maybe VGSIX.
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Old 12-18-2009, 12:57 AM   #9
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Quote:
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What I need are small & mid caps, and anything foreign.
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Originally Posted by Mill View Post
I think Id like a REIT. Maybe VGSIX.
Combine them (REIT and foreign) with a Canadian REITor index like XRE.To. RE still works up here and you are also gambling diversifying on the exchange rate. If the C$ rises your a winner. If not...

All the normal disclaimers. YMMV. Good luck.
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Old 12-22-2009, 07:14 PM   #10
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the next thing on my to-do list will be to dump that 5k into my retirement, and purchase an index fund. I still havent decided which one, but thats the fun part.
If choosing what to invest in is something that you enjoy, I'd say eschew index funds and buy individual stocks.

Otherwise, you're likely best off keeping things as simple and boring as possible, buying only two or three broad-based indexes. Using focused indexes kinda defeats the basic purpose of indexing.
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