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Originally Posted by qba335i
1) annuity - usually they are not good investment products. Long term investor are usually better of having a long only stock/bond portfolio.
2) equities - how do you invest? Domestic, international developed or emerging? What about market cap? What about sectors? Value or growth? Individual or fund/etf?
3) bonds? Taxable or not? Duration? Maturity? Individual issues or funds? Credit rating?
Do you have any RE exposure, commodities?
There are a lot of things to consider when designing a portfolio.
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1) Annuity - I tend to agree with you. I got talked into the one I have by my last adviser who sold it as a good way to balance out risk. It's done OK, not great. It's gained 30% in value in 6ish years. I have not owned it during a big downturn, which is where it was really supposed to shine. I may jut keep it and see how it does when the market turns.
2) Equities - I have a few mutual funds through my 401K that are focused on healthcare, real estate, and emerging markets. The bulk of my equities are actively managed by my portfolio management company. About 75 individual companies, focused almost exclusively on the US. There's a pretty eclectic bunch from tech to pharma, financials, and aerospace. What I really like about what they offer is that I know exactly what my money is invested in and I can steer them away from companies I'm not a fan of.
3) Bonds - The bulk of mine are in the American Century Government Bond fund (CPTNX) though my 401K. My portfolio managers also have me in a mix of taxable and non taxable bond funds and ETFs, the bulk of which is through Vanguard.
I have zero commodities
Real Estate is my house which has more than doubled in value in the last 6 years (Thanks Seattle!). I'm on a 30 year loan and was considering making extra payments to pay it off in 15, but with the markets and interest rates where they are, it seemed wiser to take any extra cash and invest as opposed to to paying down a 4% interest rate loan.
I agree, there's a ton to consider when designing a portfolio, which is why I leave a lot of it up to Baird. However, at the end of the day they are still in it to turn a profit and shielding me from possible losses with a market crash is not really in their financial best interest. They want all the money I will channel to them as quickly as possible.
All that being said, the big nugget of feedback I'm gathering from all you investment gurus is to stay the course. I may feel like an old fart at 43 but I've got plenty of time to ride out a downturn and buy like crazy as the market is tanking. It'll be a much different convo 15 years from now when I'm just a couple years from retirement.
Also, I need to start searching for forms of regular income generation. Many of my equities are in companies that pay regular dividends, so that's good. But a juicy rental property would augment my portfolio nicely.
Thanks for all the great tips, guys! This has been super helpful!
