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Is this a reasonable investment profile?

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  • Is this a reasonable investment profile?

    I have cash in my SEP-IRA and I just need to invest it.  I've been delaying this for many months.

    I read http://www.kiplinger.com/article/investing/T030-C007-S001-5-vanguard-index-funds-you-need-to-own.html

    Does this make sense?  It more or less does to me.

    All the index funds have 0.15 - 0.3 expense rate.  One of them has a 0.25% purchase fee, which I think is a one time fee to get into it.

     

    Would appreciate your opinion.  Thanks.

  • #2
    The actively-managed funds tend not to beat the passive index funds over time, which is why the Kiplinger article recommends them.  Their ERs are also really quite low.

    How far out you are from retirement will help determine how much equities vs bonds you should hold.  I'm way out, so I'm still 90/10.  If you're in your 40s, you might be a bit closer, and might want a bit more.  That article recommends 25%, which might not be too unreasonable at your stage, but might still be a bit high.

    Good ideas here: https://www.whitecoatinvestor.com/150-portfolios-better-than-yours/

    Also, SEP-IRAs are generally un-good for their lack of flexibility.  It would have been wise to convert that to Roth to enable more backdoor Roth contributions.  Even if you're at a high bracket, some Roth space can be very useful for tax-inefficient holdings and to modulate your in-retirement tax bracket.  Now you're stuck with a pretty high tax bill for converting it, so that's a tough call to make.

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    • #3
      I'd get a total bond market fund rather than a pure corporate bond fund.  It's not a bad idea to have some US treasuries mixed in to lower your risk on the bond side.

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      • #4




        I have cash in my SEP-IRA and I just need to invest it.  I’ve been delaying this for many months. I read http://www.kiplinger.com/article/investing/T030-C007-S001-5-vanguard-index-funds-you-need-to-own.html Does this make sense?  It more or less does to me. All the index funds have 0.15 – 0.3 expense rate.  One of them has a 0.25% purchase fee, which I think is a one time fee to get into it.
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        Read the latest version of Simple Wealth, Inevitable Wealth. I cannot recommend it highly enough. Quick read, logical, fascinating. imho, there is far too much focus on fund cost and far too little on appropriate behavior of long-term investors, which accounts for 90%+ of results.
        Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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