New allocation of my Roth IRA

[ripvanwinkle]

I guess it's time to really get serious about my Roth account. Two weeks ago I was at my grand daughters 1st birthday and my son in law who works at TD and occasionally we talk shop and we talked about my Roth. My Roth was not in any way allocated. Never got around to it I guess.

And by the way, my sil has no vested interest in my accounts with TD. No commissions or anything other than giving me advice now and then if I ask.

We came up with a allocation and possible funds to possible look into:

15% NLY – Annaly Mortgage
20% DLTNX – DoubleLine Total Return Bond
20% OMBIX – JP Morgan Mortgage-Backed Securities
15% OOSAX – Oppenheimer Senior Floating Rate
13% DLENX – DoubleLIne Emerging Markets Fixed Income
13% WHIYX – Ivy High Income Yield

Being just slightly more than a novice, but enough to be dangerous to myself and my money, does these look ok?

[2kids10horses]

I think you need more bonds in that portfolio!

Seriously, what's the goal?

[ripvanwinkle]

I may change this but it'a a starting point. I guess I'm tired of the wild swings of stocks. I'm still learning. Looking for a less swing.

[bimetalaupt]

Sept 20, 2012 0:24:59 GMT -5 ripvanwinkle said:

I may change this but it'a a starting point. I guess I'm tired of the wild swings of stocks. I'm still learning. Looking for a less swing.

RIP,
I HAVE POSTED FOR YEARS ABOUT THE ADVANTAGES OF THE EXPERT 50/50 SYSTEM.
ALL OF MY BOND HOLDINGS HAVE BEEN T-BOND NOT FUNDS. PLEASE NOTE THAT PURE BOND HOLDINGS HAVE ALMOST AS MUCH STANDARD DEVIATION AS UTILITY STOCKS AND WILL TRADE IN UNISON. THE PROBLEM YOU FACE IS YOUR COST IS TOO HIGH WITH SOME OF THE FUNDS. IF YOU WANT SOME PROTECTION THE 50/50 BALANCED IS FINE START. IT WILL FORCE YOU TO SELL AT THE TOP AND BUY AT THE BOTTOM.

MORE DATA HAS BEEN POSTED ON THIS BUT THE SHORT ANSWER IS ...THESE ASSETS ARE NONE-CORRELATED AND YOU CAN TRADE TO BE REBALANCED ABOUT Q180 DAYS... AVERAGE BETA IS ABOUT 0.18 AND SHARP OF 0.35%.. VERY SAFE FOR THE MONEY..

AS BEFORE I LIKE OWNING THE T-BONDS.. BET 2 HORSES WILL REPEAT THAT FOR 2008!!

[bimetalaupt]

OK HOW ABOUT SOME DATA TO BACK MY EXPERT 50/50 SYSTEM...

EXAMPLE..Guide Stone Balanced Allocation Fund
Standard Deviation 12.58%
Beta vs S&P 500 0.61
Return 7.03%....10 years
Duke Energy Beta 0.18
Guide Stone Aggressive Allocation 98% stock and 2 % Cash
Standard Deviation 21.66%
Return 7.49...10 years
Beta 1.10
Guide Stone Conservative Allocation (GFIZX) 25/73/2% This is also know as BarBell allocation system.. I used this on my very high risk Account before I convered it to European Growth .. I did day trade or swing trade with Futures on a limited risk to 10%.. Interesting effect of the study was I found I could not beat Madoff.. Saved me a ton of grief when I would not find all those options he was know to trade.. But did not...I never did get an offer from Goldman Sachs...Personal History.. This can be fun and a lot more fun then watching bonds.. Remember T-Bonds are 90% cash!!.. Own 30 Years and you can borrow at 1.3% interest and make 3%...
Standard Deviation 6.32%
Return 4.83% 10 years...
Beta vs S&P 500 = 0.29

Best of Luck.. I hope this helps.. I have also posted more data on Expert 50/50.

If you have any questions..Just ask

Just a thought,
BiMetalAuPt

[bimetalaupt]

Sept 18, 2012 22:58:06 GMT -5 2kids10horses said:

I think you need more bonds in that portfolio!

Seriously, what's the goal?

Ten Horses,
Sounds Exciting.....use the T-Bond as capital and leverage up 10X..

See your cost of money is 1.3%
Your return from T-Bond is 3.03%
Sounds like a high ride on the 10 horses to me.. Try a 10 horse hitch War waggon...with a return on equity of 18.3%.. Hold until you get to 10 year will add about a 1% to the top line or about a total return of 28.3%.. AS for me I have only had 2 horses and two Mules!!! But that is another story...

I have been their before.. ok you have something their but can you do that in a Roth IRA..Is that short of Von Rothschild???Sounds like something Guy would do? He was a De Rothschild?

Just getting crazy with the Math Model...I used to use this to have a negative risk They called that "Over Hedging" .. T-Bonds are 90% cash equivalents.

BiMetalAuPt

[ripvanwinkle]

Thanks all, you've given me some things to think about.

[Ombud]

Before you do anything, you need to define your goals & risk level otherwise you're just tossing darts at a dart board. Define:

• Risk tolerance which will let you know how much you need in safe investments (core like Spy & individual bonds) & how much you are willing to monitor (explore - that's basically everything you listed). If unsure, 110 - age = explore portion
  
• Timeline will let you know if you need more in cash. This would be what you anticipate needing in the next 1-3 years
  
• Do your homework. I like NLY [I'm in TWO but I recognize its potential risk. Are you sure you want that?]
  
• Establish your stops!
  

If you don't want to do all that, find a 5* no-load Balanced or Flexible Income Fund where the fund manager has a longer track record

[Ombud]

Oh & fyi: don't think of your Roth separate from all other investments. It'll all be the same pool of money eventually

[bimetalaupt]

Sept 23, 2012 17:05:31 GMT -5 Ombud said:

Before you do anything, you need to define your goals & risk level otherwise you're just tossing darts at a dart board. Define:

• Risk tolerance which will let you know how much you need in safe investments (core like Spy & individual bonds) & how much you are willing to monitor (explore - that's basically everything you listed). If unsure, 110 - age = explore portion
  
• Timeline will let you know if you need more in cash. This would be what you anticipate needing in the next 1-3 years
  
• Do your homework. I like NLY [I'm in TWO but I recognize its potential risk. Are you sure you want that?]
  
• Establish your stops!
  

If you don't want to do all that, find a 5* no-load Balanced or Flexible Income Fund where the fund manager has a longer track record

Bud,
I looked at NLY and did the math.. Sold That holding due to interest rate risk.. I moved money to SPG.. I think the risk will be less in the long term but there is always risk. DCF for both are positive but SPG looks like the Alpha to me with a superior Alpha and DCF.

Just a thought,
BiMetalAuPt

[Ombud]

I agree. Payout ratio too high for my taste