My retirememt portfolio

[Bob B.]

I'm 38, with no particular knowledge or experience in investing.

I started working with my current employer in October 2000. During that 10.5 year period, my employer and I have contributed $65K into my retirement fund. It's current value is $85K. So, I've obviousy gained $20K over the entire period, or $1900 per year, or 23.5% of the value of the portfolio is gain.

According to the website of the company that manages the fund, my current fund allocation is:

51% Equities
30% Money Market
14% Guaranteed
5% Real Estate

Is that a good mix for my age? I expect I'll plan to retire in the next 25 years or so. I set up those allocation preferences back when I was hired.

[StepRightUp]

I'm no expert but I'm puzzled why there's 30% in Money Market. I'm also unsure what "Guaranteed" means. I would think that at your age, an aggressive allocation would be be 80%-85% in stocks, 10-15% bonds, 5% cash. Moderate would be 70% stocks, 20% bonds, 10% cash?

I'd defer to others on this forum though when it comes to specifics.

[jpg7n16]

IMO no. Not unless you're super risk averse.

Guaranteed = Guaranteed Investment Contracts. They're like CD's.

For asset allocation, I like to go to the Vanguard website, look at their target date fund and then adjust a little for risk tolerance.

As an example, 25 years to retirement would put you in the 2035 target date fund. (see: https://personal.vanguard.com/us/fun...t#targetAnchor)

They're allocation is:
88.65% Stocks
11.24% Bonds
0.11% Short-term

Your equivalent is:
51% Stocks
5% Bonds (kind of a stretch for your real estate, but I view RE as more income than growth)
44% Short term

[thomsoad]

Bob that 23.5% sounds nice until you factor in that the company is matching either all your contributions or a good portion of it.

Frankly, your investing like a 60+ year old man who is trying to save his capital instead of trying to make it grow.

30% in a money market?? Dude, thats a savings account. To get a good idea on that return; take a look at how much interest you made in your checking account last month .... thats gonna be 30% of your profits in the next 30 years.

Guaranteed is just as bad... Guaranteed are essentially Bonds usually in the form of annueties from Life Insurance companies and the like. They guarantee you somewhere in the neighborhood of 4-6% so long as you stay in it for 10+ years. Why? ... Cuz the insurance companies know that if they stick YOUR money into the stock market for 10+ years they will make more then 10% on your money. Then they give you the 4-6% and keep the rest.

Look Im not gonna tell you what your risk tolerance are. Im just gonna tell you what I was doing at your age.
100% stocks
25% Large Companies
25% Mid Cap
25% Small cap
25% International

When I hit 50 I might start protecting some of portfolio. But for now .. you have 25-30 years man!! Any bad news going on today wont barely even be remembered 30 years from now.

But I dont mind the roller coaster ride. Cuz it only hurts if you get off.

[Bob B.]

Just an FYI that I did change allocations to match quite closely what JPG suggested.