Where/How to Start

[SuperNoob]

I know I want to do PP.  I've been researching a ton but the more I research, the more options I find and the more questions I have.  It's becoming overwhelming.

Here's my situation:

I'm 30 years old, single, I make $85,000/yr + possible $6,000/yr bonus.
I have ~$39K in a 401(k) and am contributing the maximum % matched by my employer.  It is currently all allocated to "WF Advtg Dow Jones Trgt 2040 (WFLWX)".
I have ~$67K cash in checking/savings accounts.
I have 10oz of physical gold, so ~$13,500.

25% Stocks

Should I do ETF or mutual fund?  I was looking at iShares Russell 3000 ETF (IWV), Vanguard Total Stock Market ETF (VTI), and Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX).  Which one would be best long term?

Should I put any international stocks in there, perhaps 10-15% (of this 25%) to Vanguard Total International Stock Index Fund Admiral Shares (VTIAX)?

Should I buy everything at once or stagger things out?  If I do Admiral Shares, just do the $10K to qualify at first and then do another $x every y months?

25% Bonds

Does it really matter where I buy them?  Just buy them direct?  Should I wait for an auction?  What should I look for?  Highest YTM?  Lowest coupon?  Should I spread out the maturity right away, or let rebalancing and stuff work that out later?

25% Cash

I'm completely lost here.  VMMXX,? VMSXX? PRTXX? SHY? VBIRX? VSGDX? VWSUX? VFIRX?... argh.  CDs?  How much should I leave in savings?

25% Precious Metals

I have some gold already.  I like the idea of owning physical gold.  Should I buy some silver too?  What percentage?

401(k)

I don't have a ton of options for my 401(k) allocations.  There's Wells Fargo Stable Return Fund N6 (DSRS1) which looks like it would fit the cash category pretty well, or Wells Fargo Advantage Index Adm (WFIOX), which would fit the stocks category, although it tracks the S&P 500 instead of the Russell 3000 or Wilshire 5000.  All the other options are managed, highly diversified funds.

Taxes

How do I limit my tax liability?  I've seen some tax exempt mutual funds, should I be looking at those for certain 25% categories?  Should I get an IRA and put the max in there?  Which 25% category should I invest the IRA in?  Roth or traditional?  If DSRS1 or WFIOX from my 401(k) options would work well, would it make sense to increase my payroll withholding to the maximum, thus funneling tax free money into the 401(k) and living off of cash that I would have otherwise invested post-tax?

Finally, are there any other questions that I'm not asking, that I should?

[MediumTex]

I know I want to do PP.  I've been researching a ton but the more I research, the more options I find and the more questions I have.  It's becoming overwhelming.

Here's my situation:

I'm 30 years old, single, I make $85,000/yr + possible $6,000/yr bonus.
I have ~$39K in a 401(k) and am contributing the maximum % matched by my employer.  It is currently all allocated to "WF Advtg Dow Jones Trgt 2040 (WFLWX)".
I have ~$67K cash in checking/savings accounts.
I have 10oz of physical gold, so ~$13,500.

Outstanding.

25% Stocks

Should I do ETF or mutual fund?  I was looking at iShares Russell 3000 ETF (IWV), Vanguard Total Stock Market ETF (VTI), and Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX).  Which one would be best long term?

I would do a mutual fund, but I don't think it really matters.

Should I put any international stocks in there, perhaps 10-15% (of this 25%) to Vanguard Total International Stock Index Fund Admiral Shares (VTIAX)?

I do 15% VGTSX.  If you want some international exposure I wouldn't go more than 15%.

Should I buy everything at once or stagger things out?  If I do Admiral Shares, just do the $10K to qualify at first and then do another $x every y months?

I'm a fraidy cat, so I would ease in over some predetermined period (e.g., six months in 1/6 increments), but it doesn't really matter.  Do what feels right to you.

25% Bonds

Does it really matter where I buy them?  Just buy them direct?  Should I wait for an auction?  What should I look for?  Highest YTM?  Lowest coupon?  Should I spread out the maturity right away, or let rebalancing and stuff work that out later?

If you want to do an ETF, use TLT.  If you want to buy the bonds, just buy the longest dated that are available.  Don't worry about the yield.

25% Cash

I'm completely lost here.  VMMXX,? VMSXX? PRTXX? SHY? VBIRX? VSGDX? VWSUX? VFIRX?... argh.  CDs?  How much should I leave in savings?

It's okay to spread the cash around a bit.  All of those funds are fine.  Just make sure it adds up to 25% of your whole portfolio.

25% Precious Metals

I have some gold already.  I like the idea of owning physical gold.  Should I buy some silver too?  What percentage?

I would stay away from silver, but if you must own it I wouldn't let it exceed 10% of my PM holdings.

I don't think there is anything wrong with a PM ETF for a portion of your PM holdings.  Do your own research, of course.  GTU is selling at a negative premium right now.  That doesn't happen too often.  You may want to check that out.

401(k)

I don't have a ton of options for my 401(k) allocations.  There's Wells Fargo Stable Return Fund N6 (DSRS1) which looks like it would fit the cash category pretty well, or Wells Fargo Advantage Index Adm (WFIOX), which would fit the stocks category, although it tracks the S&P 500 instead of the Russell 3000 or Wilshire 5000.  All the other options are managed, highly diversified funds.

A typical 401(k) lineup is usually only suitable for the cash and stock holdings of your PP.  See if your plan offers a "brokerage window."  This is a great tool for PP purposes.

Taxes

How do I limit my tax liability?  I've seen some tax exempt mutual funds, should I be looking at those for certain 25% categories?

NO!!!!!!!!  

Should I get an IRA and put the max in there?  Which 25% category should I invest the IRA in?  Roth or traditional?  If DSRS1 or WFIOX from my 401(k) options would work well, would it make sense to increase my payroll withholding to the maximum, thus funneling tax free money into the 401(k) and living off of cash that I would have otherwise invested post-tax?

I think most of these nuts and bolts questions will work themselves out when you start actually putting your PP together. 

I would max out your 401(k) first.  You may not be eligible to make an IRA contribution--check that out for yourself.

Finally, are there any other questions that I'm not asking, that I should?

PRPFX is a great fund and can be part of a larger PP commitment.

For example, you might want to commit 10% of your PP funds to PRPFX and the other 90% to a traditional PP.  PRPFX is super tax-efficient, so I would consider doing this with your taxable accounts. 

[moda0306]

I tend to push the Roth IRA over traditional.

With a Roth, after 5 years, you can pull out what you put in, with no taxes or penalty.  There is also no required minimum distribution.  This could all change, but I find that the facts, as they currently stand, favor the roth significantly.  Plus, the IRS doesn't gain much by changing these rules as they currently stand, so I'm not too worried that they'll change things around too much on those fronts.

Not that you necessarily want your retirement money available on a whim, but liquid is always better than not, as long as you can keep from using it to buy a cigarette boat or a Ferarri.

[SuperNoob]

I don't think my 401(k) offers a brokerage window.  I'm checking to be 100% sure, but if it doesn't, it seems that I'm stuck with Wells Fargo Advantage Index Adm (WFIOX) and Wells Fargo Stable Return Fund N6 (DSRS1).

My 401(k) makes up more than 25% of my total, so I'll have to split it between at least two asset classes.  If WFIOX and DSRS1 are my only options, which should I weigh it more heavily towards?

Are the other managed, diversified funds that my 401(k) offers even worth looking at?

You may not be eligible to make an IRA contribution--check that out for yourself.

Why would that be?  How would I check?

If I did invest in an IRA, which asset class should I invest it in?

[MediumTex]

You may not be eligible to make an IRA contribution--check that out for yourself.

Why would that be?  How would I check?

If I did invest in an IRA, which asset class should I invest it in?

Depending upon your income, participating in a 401(k) plan (or even being eligible to participate) can phase you out of eligibility for IRA contributions.

If you invest in an IRA, I would simply use it for whatever assets you couldn't get covered in your 401(k) account and other taxable accounts.

[SuperNoob]

With a Roth, after 5 years, you can pull out what you put in, with no taxes or penalty.

I can't find anything online that backs that up.  Everything I have found says you need to meet certain criteria for the distribution to be tax-free and avoid the 10% tax penalty.  Am I missing something?

If you invest in an IRA, I would simply use it for whatever assets you couldn't get covered in your 401(k) account and other taxable accounts.

The yearly contribution limit of $5,000 would only cover a small amount of what I have outside my 401(k).

Basically, what it comes down to is which asset classes have the highest long term tax liability?  I would want to invest as much of those asset classes in my 401(k) and IRA as I could, and leave the rest to taxable accounts.  My problem is that I have no idea what the relative tax liabilities of each asset class are.

[KevinW]

I know I want to do PP.  I've been researching a ton but the more I research, the more options I find and the more questions I have.  It's becoming overwhelming.

IMO, aside from the tax-exempt bond thing, these are picayune Ford-vs.-Chevy sorts of dilemmas.  Meaning that you can put a lot of effort into weighing pros and cons, and in an internet forum like this you may get some strong arguments on either side, but being perfectly practical about things, any choice will work and you'll get essentially the same results no matter what you choose.  So maybe you should just choose whatever's cheapest or most convenient.

As evidence, compare a backtest of a 4x25 orthodox portfolio versus PRPFX.  Those two portfolios differ on all these details, but for all intents and purposes they performed equivalently.

That being said, here's my $.02:

Should I do ETF or mutual fund?

I have a slight preference for mutual funds since they have less counterparty risk (no broker).  For idiosyncratic reasons, the slightly higher ER sits better with me than paying similar amounts as broker commissions and bid/ask spreads.

I was looking at iShares Russell 3000 ETF (IWV), Vanguard Total Stock Market ETF (VTI), and Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX).  Which one would be best long term?

These are almost interchangeable so we're really splitting hairs.  I would choose VTSAX for the reasons stated above.  IWV's ER is higher than the alternative so I'd eliminate it on that basis.

Should I put any international stocks in there, perhaps 10-15% (of this 25%) to Vanguard Total International Stock Index Fund Admiral Shares (VTIAX)?

My position is that the four economic conditions are all relative to the domestic economy, so the stock allocation needs to be all in domestic stocks for the portfolio to function properly under prosperity.  International stocks can introduce a beneficial currency hedge to a stock/bond portfolio, but the PP already has a strong currency hedge in gold, and double-dipping only adds complexity and expenses.

Should I buy everything at once or stagger things out?  If I do Admiral Shares, just do the $10K to qualify at first and then do another $x every y months?

Whatever you prefer.  I wouldn't sweat the Admiral shares thing.  If your holdings are below the Admiral cutoff then by definition they aren't large enough for the difference in expense ratios to amount to a significant sum.

Does it really matter where I buy them?  Just buy them direct?  Should I wait for an auction?  What should I look for?  Highest YTM?  Lowest coupon?  Should I spread out the maturity right away, or let rebalancing and stuff work that out later?

As already stated, just buy the longest duration bonds you can and ignore the other factors.  The treasury bond market is efficient enough that it doesn't matter where or when you buy them.

I'm completely lost here.  VMMXX,? VMSXX? PRTXX? SHY? VBIRX? VSGDX? VWSUX? VFIRX?... argh.  CDs?  

I follow craigr's advice to use a short term treasury fund for most of the cash portion.  I'm not familiar with all those ticker symbols but I'd just go with whichever short term treasury fund has the lowest expenses at your brokerage.

How much should I leave in savings?

Personally I aim to keep roughly 1/2 the cash component in a taxable online savings account.  I plan on moving that to Vanguard's treasury money market once that opens up again.  This is a household financial planning issue where it's difficult to give blanket advice.

Should I buy some silver too?

No.  Gold works the way it does because it is primarily a monetary metal with very little industrial demand.  Silver is the opposite.  "Inflation-Proofing Your Investments" discussed how silver was considered, and ultimately rejected, for the PP.

How do I limit my tax liability?

Maximize your contributions to tax deferred accounts; prioritize holding tax-inefficient assets in tax-deferred accounts instead of taxable accounts; use the wider 15/35 rebalance bands instead of narrower ones.

I've seen some tax exempt mutual funds, should I be looking at those for certain 25% categories?

No, as discussed on the radio show, the tax benefits of municipal bonds aren't worth the added credit risk.

...would work well, would it make sense to increase my payroll withholding to the maximum, thus funneling tax free money into the 401(k) and living off of cash that I would have otherwise invested post-tax?

IMO, yes, you should maximize 401(k) contributions, because the advantages of tax deferral outweigh the disadvantages of the limited fund selection in 401(k)s.  There are ways of making lemonade out of lemons, and you can roll everything into an IRA of your choosing when you change jobs.

[KevinW]

With a Roth, after 5 years, you can pull out what you put in, with no taxes or penalty.

I can't find anything online that backs that up.  Everything I have found says you need to meet certain criteria for the distribution to be tax-free and avoid the 10% tax penalty.  Am I missing something?

Look for materials on "withdrawing Roth contributions".

Basically, what it comes down to is which asset classes have the highest long term tax liability?

The usual ranking, from least tax efficient to most, is:
cash - all returns are interest
bonds - mix of interest and capital gains
stocks - mostly capital gains with a little dividends
gold - all capital gains

[moda0306]

I'll find something regarding roths.... but it's busy season for me so it might be a little bit.

[SuperNoob]

From what I'm reading, you can contribute to an IRA for the previous year up until your taxes are due.  Since I didn't contribute at all to an IRA last year, could I contribute $10,000 as long as I do it before April 15th and count it as $5,000 for 2010 and $5,000 for 2011?

[MediumTex]

From what I'm reading, you can contribute to an IRA for the previous year up until your taxes are due.  Since I didn't contribute at all to an IRA last year, could I contribute $10,000 as long as I do it before April 15th and count it as $5,000 for 2010 and $5,000 for 2011?

If you are eligible, then I would think so.

Bear in mind, though, that the configuration of your IRAs has almost nothing to do with setting up a PP for yourself.

If you are interested in setting up a PP of your own, I would focus on making sure you understand the strategy from a broad perspective and have determined that it is right for you.  Whether some or all of it is in an IRA is a small matter from the perspective of getting started and building a durable commitment to the strategy.

[SuperNoob]

With a Roth, after 5 years, you can pull out what you put in, with no taxes or penalty.

I can't find anything online that backs that up.  Everything I have found says you need to meet certain criteria for the distribution to be tax-free and avoid the 10% tax penalty.  Am I missing something?

Look for materials on "withdrawing Roth contributions".

I'll find something regarding roths.... but it's busy season for me so it might be a little bit.

I found what you guys were talking about.  The part I wasn't getting was that you can withdraw the contributions without penalty but not the earnings.

[moda0306]

I appear to be mistaken on the 5-year rule point.  There is that rule, but only if you're purchasing your first home, have medical expenses, etc.

I had discussed this with a few other people I work with and thought we had come to a conclusion on this item.  I apologize for any confusion I have caused.  I'll try to check my facts a little closer from now on.

[SuperNoob]

I appear to be mistaken on the 5-year rule point.  There is that rule, but only if you're purchasing your first home, have medical expenses, etc.

I'm not so sure you are.  This is what I found:

Can I Really Withdraw My Roth IRA Contributions At Any Time Without Tax Or Penalty?

[SuperNoob]

Thank you all for all of your help.  I think I'm starting to get close to an actual plan now.

Here's what I've come up with so far:

I have about $120K to work with.

25% Stocks

~$15K of Wells Fargo Advantage Index Adm (WFIOX) in my 401(k)
~$15K of Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) directly with Vanguard

25% Bonds

~$20K of 30 year bonds from TreasuryDirect.com
~$10K of Barclays 20+ Year Treasury Bond Fund (TLT) in a Roth IRA

25% Cash

~$6K in checking/savings
~$24K of Wells Fargo Stable Return Fund N6 (DSRS1) in my 401(k)

25% Gold

~$30K of physical gold

Does this seem like a good plan?  Am I missing anything?  Any gotchas?

I'll run this all past my tax advisor first but once I do, any recommendations on where to open the IRA?  What should I be looking for?

[moda0306]

That's a lot of long-term bonds to have in what appears to be taxable accounts.  It's hard to get them in 401(k) plans often though.

[SuperNoob]

That's a lot of long-term bonds to have in what appears to be taxable accounts.  It's hard to get them in 401(k) plans often though.

Yeah, I'm talking to my company's HR department to see if there's any way to get a brokerage window or a bond fund added to our plan.  I'm not too optimistic though.

[MediumTex]

That's a lot of long-term bonds to have in what appears to be taxable accounts.  It's hard to get them in 401(k) plans often though.

Yeah, I'm talking to my company's HR department to see if there's any way to get a brokerage window or a bond fund added to our plan.  I'm not too optimistic though.

Your plan looks great to me.

A brokerage window in your 401(k) plan is a possibility.  A suitable bond fund is very unlikely.  Even VUSTX is really not a great fit for PP purposes.

As for your brokerage account, I think Vanguard is hard to beat (though there are lots of good companies).

[cowboyhat]

If you don't have a 401K brokerage window see the linked Forbes article on "The Great 401K Escape."

The summary is that some plans allow employees an in service withdraw of matching funds from a 401k before they turn 59 and 1/2 without any penalty if the money goes to an IRA account.

http://www.forbes.com/forbes/2008/0225/046.html

The pertinent quote:

"As for younger folks, the law permits them to get in-service distributions of... ... employer (but not employee) pretax contributions; of employee aftertax contributions; and of account earnings."

According to the article 16% of companies allow this type of move.

[bdahl01]

You are certainly on the right track. 

A couple of my thoughts,  I read Harry Brownes book about a year ago and have been moving
to a PP ever since.  But I like to add a little twists to his 25% per catagory.  First thing I would say
is I like to split each account into its own portfolio.  This is because if you put 100% of a roth in
Gold,  or I use GLD.  And GLD has a bad year like down 50%.  The portfiolio might return 5% but
you are going to kill one of your best assests.  The Roth.  So diversity amoung the different investments
is important.  I think.  I have been burned one to many times by that.

So here is what I am doing,  if you care. 

401K  No Gold Option..  Thats fine.  25% fixed(cash)  25% Emerging Markets 25% Total STock
25% realestate.  Rebalance every year.  No hard asset catagory in the fund choices.

Roth IRA - Aggressive Permanent.  My nick name. I use all ETF's when possible
20% Small Cap Value    VBR
20%  Emerging Markets  VWO
20%  Long Bonds.  I use BLV or TLT or VGLT..  all similar
20% Short Term Bonds  BSV
and 20% Gold  GLD


http://madmoneymachine.com/2010/03/31/p ... portfolio/

Check the historical returns for a portfilio like that..  I was also in the financial services field
and ran this portfolio on Morningstars advisor workstation.  Has a standard D of 11 which is
50% less than the market..  The Alpha and Bata were out of this world and the returns have
killed the market,  or s&p 500 that is.  I am 40 and have 25 years to invest,  so I lean a little
heavier on stocks than the pp was intended.

I run a straight PP for my cash,  Keep taxes lower and since I might use this money,  I want
the consistant returns of the original PP. 
25% GLD
25% BSV
25% VT  --  Total world stock
25% BLV

For my other IRA  -  I use that same as above,  but added VNQ for real-estate.  Seems to always
improve the returns and not add much risk...

Good luck-Hope that helps.

[AdamA]

SuperNoob--

I'm fairly new to this as well, but have a couple of thoughts.

1.  I don't really like the Wells Fargo cash fund that you have.  You want short-term treasuries, not debt from insurance companies.  You are introducing unnecessary credit risk with this fund.

My advice would be to dump this fund, and buy more of the Wells Fargo index stock fund that you have in your 401k.  Then sell your Vanguard Stock Index Fund, and buy Vanguard's Short Term Treasury fund.  Granted, these aren't the shortest term treasuries available (1-4 years, I think), but I think the interest rate risk this introduces is much much much smaller than the credit risk in the other fund.

2.  Love the large physical gold holding (although I'm not sure I would advertise that on the net!).  You might want to hold 10-15% of your gold in an ETF or a close-ended fund.  This will make it easier to rebalance.  Harder to sell physical gold, and you're gonna pay a collectibles tax on this.  If you use close-ended fund, you only pay capital gains (15% vs 28%). 

3.  I also really like that you're buying some of your bonds from Treasury Direct.  I thought about using TLT, but don't like the expense and the theoretical idea of the counter-party risk involved (which is probably bogus, in my opinion).  More important, buying actual bonds forces you to learn and understand the bond market (at least it did for me).

All in all looks great.  Really think about comment #1.  It would be a shame to have a great buying opportunity blown b/c your cash fund is insolvent or illiquid. 

I know this seems unlikely, and for the most part it is...BUT keep in mind that the conditions under which you would want cash are exactly the same conditions that may cause credit defaults.  This is why holding physical gold is such a good idea.  The exact conditions that create inflation are the same ones that will introduce counterparty (and other) risks into the gold market.  You'd hate to have high inflation for a few years and then have State Street Global Advisors tell you that they're changing the rules on you b/c Bernie Madoff the 2nd can't pay cover all of his GLD short-selling (or whatever).  Again, unlikely, but slightly more likely under the circumstances under which you'd actually need the gold (to buy stocks/bonds on the cheap).

This is one of the main strengths of the PP--when extreme circumstances kill one asset class the other pulls the money train for a while.

Just my thoughts...

Adam   

[SuperNoob]

1.  I don't really like the Wells Fargo cash fund that you have.  You want short-term treasuries, not debt from insurance companies.  You are introducing unnecessary credit risk with this fund.

My advice would be to dump this fund, and buy more of the Wells Fargo index stock fund that you have in your 401k.  Then sell your Vanguard Stock Index Fund, and buy Vanguard's Short Term Treasury fund.  Granted, these aren't the shortest term treasuries available (1-4 years, I think), but I think the interest rate risk this introduces is much much much smaller than the credit risk in the other fund.

This all still a plan, I haven't actually bought anything or switched my allocations yet.

The problem with my 401(k) is that it has $39K in it right now, 25% would be $30K.  If I put my entire 401(k) into stocks, I wouldn't get the proper 25% balance for everything.

I'm glad you brought this up though, I had no idea that DSRS1 isn't very suitable for PP.

2.  Love the large physical gold holding (although I'm not sure I would advertise that on the net!).   You might want to hold 10-15% of your gold in an ETF or a close-ended fund.  This will make it easier to rebalance.  Harder to sell physical gold, and you're gonna pay a collectibles tax on this.  If you use close-ended fund, you only pay capital gains (15% vs 28%).

That's a great point about rebalancing.  I hadn't thought of that.  The gold I have, and plan to buy, is bullion coins.  Are those subject to collectibles tax?

[SuperNoob]

First thing I would say
is I like to split each account into its own portfolio.   This is because if you put 100% of a roth in
Gold,  or I use GLD.  And GLD has a bad year like down 50%.  The portfiolio might return 5% but
you are going to kill one of your best assests.  The Roth.  So diversity amoung the different investments
is important.  I think.  I have been burned one to many times by that.

That seems to make sense.  I'm not sure how I would be able to do that though with such limited options in my 401(k).

Do you think diversifying within the Roth IRA would outweigh moving more of the relatively lower tax efficiency bonds out of a tax advantaged account?  Tax efficiency was why I was planning on putting as much bonds in the Roth IRA as I could.

[MediumTex]

That's a great point about rebalancing.  I hadn't thought of that.  The gold I have, and plan to buy, is bullion coins.  Are those subject to collectibles tax?

Yes.

Remember the carpenter's line about measuring twice and cutting once.

Also, with respect to the stable value fund in your 401(k) plan, while that is not a treasury fund, IMHO it's acceptable for cash in a PP setting (you've got to work with what you've got).  It's not perfect, but I wouldn't avoid it if a big chunk of your money is in your 401(k) account.

[AdamA]

I have a lot of my money in tax-deferred accounts and had/have some of the same issues.

1.  Get as close to 25% allocations as you can, but it doesn't have to be perfect.  I think it's worth it to take full advantage of the tax accounts (just my opinion).  With the amount of money you have, even if you're $5K (or even $10K) off in a position or two, it's not the end of the world.  You'll have chances to rebalance as time goes on, and will be surprised at how well you're able to work things out.  It's a dynamic process, and you'll probably be tweaking things for the rest of your investing life. 

Setup a simple spreadsheet that calculates the percentages in each position per month.  Play with some numbers, and you'll see it's not that hard to stay close to the right allocations.  Push comes to shove, you can use a taxable account to balance things out, but I'd rather have the portfolio 20% 20% 30% 30% than lose the tax advantages available.  Remember, you don't have to rebalance until you're 15% or 35%.

One thing that you can do with some 401K's is take out a loan against them and pay yourself back (with interest).  May be a useful rebalancing trick, but, as Craig points out often, don't make things too complicated. 

2.  Cash Account--You could possibly split the cash positions between two funds.  Like Medium Tex said, you have to work with what you have, and it probably isn't a huge deal anyway.

3.  You will be taxed on the coins...when/if you sell them.  28% is the collectibles rate.


Adam