...Freebird, I am intrigued by the concept of 2 different investing strategies for the "OMG" fund and the long-term fund. Would you care to post details? Or you could PM me if you'd prefer.
Amethyst
Sure.
No rocket science going on here. Well, maybe a little...
I invest with a very analytical approach. I keep the emotion out of it, just like I would conduct a lab experiment. I look at the boundary conditions (market), propose a hypothesis (what if?), test it (portfolio tracking over a year), and do a lab report *.
Overall AA = 40/60, combo of Account #1 and Account #2.
I can figure out the AA of each if you want me to.
Account #1 - I keep my real long term retirement fund in a zero fee TDAmeritrade account. I grew it to a certain size while w*rking. I no longer contribute to it, but reinvest all distributions. The only cost is the MF expense ratios. I own 1 ETF, VTI. The rest are all MF from VG and Dodge & Cox. I just bought some CELG stock cuz I felt like it after I "found" less than $1K doing nothing in the TDA sweep money market account earning 0.25% interest. Big whoooooo.
I do an occasional exchange between funds if it makes sense for TLH. This account is set in Park with the emergency brake on (no withdrawals). I am now looking at a 11.5 year horizon until I turn 62.
Account #2 - the OMG short term stash is completey independent of Account #1. It is with VG directly.
I use my 2 FIRE income streams to cover current expenses. However...I pay myself first. I am religious about monthly DCA and cut out a lot of "mad money" expenses to accomodate that. I usually do $600/mo, have gone as high as $1000/mo in fall 2008
, and currently do $800/mo. All of this goes into my short term account.
The core funds in this subportfolio are VWAHX and VNYTX, and very recently added VHDYX and VYFXX. With the exception of VHDYX, I am acting like an income investor, and view VWAHX, VNYTX, and VYFXX as my OMG emergency funds. These 3 funds pay dividends that are almost completely tax free for my zip code.
I view the dividends as a partial "match" mechanism for my DCA, except of course VHDYX. My stake is too small right now to be a big player.
More bang for the buck, the joy of componding interest every 30 days, and
to the IRS.
NAV is usually pretty stable on munis but last year knocked it back a little (-10.5% on VWAHX, -3.7% on VNYTX for 2008
per M*).
Life happens. NAV recovery has been OK so far in 2009.
* Just kidding about the lab report.