Qs Laptop
Thinks s/he gets paid by the post
- Joined
- Mar 11, 2018
- Messages
- 3,578
As you may recall, we recently had GS#1 who is now 18 months old and GBaby#2 "in the oven" and my DM recent died. Part of my inheritance will include an inherited Roth IRA of ~$50k.
This is money that I would never need. I'm thinking of investing the Roth for dramatic growth for the grandkids benefit and then taking the money out in the tenth year as required.
I'm thinking of Hedgefundie's Excellent Adventure Portfolio (HFEA). See attached link and you can also find it on bogleheads.
HFEA is 55% 3x leveraged S&P 500 bull ETF (UPRO) and 45% 3x leveraged 20-year Treasury bull ETF (TMF) that would be rebalanced quarterly... a risky and volatile combination that backtests very well.
The reason for using a Roth is because with the HFEA the quarterly rebalancing can result in signifcant taxes if done in a taxable account.
The way I figure it is even if the return is average then the grandkids will remember grandpa as a genius.
Thoughts? Am I crazy?
You're not crazy, you're brilliant! Great idea that I'm tucking away for possible future use.
I particularly like the use of the Roth to avoid taxation. The only caveat I would consider is perhaps winding down the risk factor as you reach the last couple of years. I'd still be aggressive in those years, but not at a 3X leveraged factor.