Theoretical Investment Question for 2009

[frayne]

How would you posture a (in my best Dr Evil voice over) one million dollar IRA portfolio for 2009?

Background, Dr. and Mrs. Evil are semi retired, no debt and in their mid fifties? Current annual expenses approx. $40K.

 

[LOL!]

I'll assume no taxable investments except perhaps a MMfund with 12 months of expenses. The IRA will then hold:

25% VTI Vanguard total stock market
25% VEU Vanguard FTSE all-world
25% VIPSX Vanguard TIPS, but pick the admiral share class
25% VFIIX Vanguard GNMA fund, but pick the admiral share class

If you wanted more risk, then move up to half of the VTI (12.5% of portfolio total) to VBR Vanguard small cap value and/or move up to half ofthe the VEU to either GWX or DLS or the soon-to-be opened Vanguard small cap international ETF.

As market goes lower, I'd sell out of the GNMA fund and move to the equity ETFs until I had about 60% equities.

oh, full disclosure: I own shares of VTI, VEU, VIPSX, VFIIX, and GWX. Instead of VBR, I own IJS.

 

[Animorph]

12% cash just in case, spend it before equities.
88% equities, with a roughly even split foreign/US, growth/value, large/small, plus EM, RE, and energy.