cabronjames wrote:
4 what portion of the total pie is each of
foglifter wrote:
4a your 401k - 45%
4b your set of IRAs - 55%
Here's a simple plan to implement 4X25 HBPP, considering your 45% 401k & 55% Fidelity IRAs as 1 PP pie:
1 Since you indicated you like to buy individual USTreasuries at Fidelity & plan to eventually convert your EDV into individual 30 yr US T-Bond(s), & the 55% portion of your Fidelity IRAs does allow for it, take care of your entire bonds & cash within your Fidelity IRAs.
2 From
http://fixedincome.fidelity.com/fi/FISe ... chTreasury , it seems that the longest 30 yr UST available matures in 2042-May, UNITED STATES TREAS BDS 3.00000% 05/15/2042
Put 25% of PP Pie in this bond.
3 Similarly to implement your Cash asset, take 25% of your pie to buy 1 or a mix of T-Bills (mature in under 1 yr) or T-Notes. Perhaps you can do a "bond ladder", put 12.5% of your pie in a T-Note maturing in 2013-June, & similarly 12.5% pie in a T-Note maturing in 2014-June. I've never bought individual USTs. If I were to do so, I'd read/ask questions on the Cash section of this message board. Also an aside, I Bonds from the US Savings Bond program of the UST, in a US Treasury Direct account, are a superior cash asset than say US T-Notes, in yield (2-3% currently for I Bond, it adjusts with the CPI inflation rate & you don't lose nominal $, vs 0.26% adjusting with market you CAN lose some nominal $ for 2 yr US T-Note per Google Finance) & some other features (again you can read up on them in the Cash section of tis board). So before investing in Taxable accounts, I'd suggest buying I Bonds ($10K max per year, + extra $5K as Fed tax refund) & partially over time reducing the amount of your US T-Notes in your Fidelity IRAs. Note that we'll come back to your Fidelity IRAs to finish the remaining 5% of pie to buy gold &/or stock later.
4 In your 401K, go ahead & open that SSgA Brokerage Window. Given that half (22.5% pie) of 401k account (45% pie) limit you mentioned, buy whichever 1 gold ETF you prefer. For example, SGOL 0.39%er.
5 Put the remaining 22.5% of your 401k in that S&P500 fund MMILX 0.41%er. Direct that 100% of new payroll contribs be directed into MMILX.
6 Go back to Fidelity IRAs, finish the 5% pie remaining to buy gold &/or stock. Personally, given the buy/sell commission, I would use the 5% to buy stock, using IVV, which is on S&P500 ETF on that Fidelity iShares no comission list, which would make your PP pie be 27.5% stock, 22.5% gold. As your new pay contribs are adding to this 27.5% stock, you will sometime (6 months? 3 yrs?) hit the 35% stock, at which point you can again sell some 401k MMILX stock to buy more SSgA/401K SGOL gold . Alternatively, you could take the remaining 5%, & buy 2.5% SGOL, 2.5% IVV.
To summarize, the portfolio is then:
stock 27.5%
22.5% MMILX 0.41%er in 401K
5% IVV 0.09%er in Fidelity IRA
bond 25%
25% UST-Bond May-2042 0%er in Fidelity IRA
gold 22.5%
22.5% SGOL 0.39% + $100 annual fee + $25 commission in SSgA Brokerage 401k. The net expense ratio (incl the comission) given $10K in SGOL would be
(($100 annual fee + $25 comission) / $10K) + 0.39% SGOL's er = 1.64%
similarly if $50K in SGOL, net er = 0.64%
cash 25%
25% across 1 or more UST-Notes or UST-Bills 0%er in Fidelity IRA
assuming "worst case" $10K in SSgA 401K with resultant 1.64%er, let's calculate the portfolio ER = 0.47%
= (22.5% * 0.41%) + (5% * 0.09%) + (22.5% * 1.64%)
The 0%er on the Fidelity USTs really helps lower the portfolio ER.
On 1 hand 0.47%er seems poor, but you are actually getting the HBPP asset allocation you desire. As opposed as, for instance, VBSAX 0.10%er, which has much garbage non-UST bonds like Morgan Stanley/Fannie Mae. Also, supposedly many portfolio ERs are 1%+ for a garbage asset allocation, so 0.47%er for a great HBPP asset alloc is not bad.
Let me know what you think. Hope this helps.
). I certainly feel this way sometimes. On some days I get to the forum and notice that some sections, like stocks for example, haven't had new threads for a few days... aside from the fact that the forum is still young I believe another important reason is well-established clarity of the question about stocks. It's all well defined in the FAQs (kudos to craigr).