- 03 Jun 2007 02:52
#1225565
Here is my investment strategy geared towards retirement:
Open a Roth IRA (personally, I choose Vanguard, mods, it is not my intent to spam on behalf of Vanguard)
Allocate 50% in Vanguard S&P 500 index fund
Allocate 20% in Vanguard Morgan Stanely International Index Fund
20% in a small cap value fund
10% in Vangard's Inflation indexed bond fund (it invests in Inflation Adjusted US Treasury Bonds).
My approach is to diversify, take advantage of dollar cost averaging (meaning, take a fixed amount of money every month and invest it according to the above allocation), hedge against credit risk (US Treasury bonds have excellent credit because the government can simply print up money to pay it's bills), inflation risk (international fund and Inflation Adjusted US treasury bonds hedge against inflation and the bonds pay interest according to the new rate of inflation, so inflation never harms the purchasing power of the interest I collect), currency risk (investing in foreign economies through the international index hedges against the US dollor and vice versa), interest rate risk (dollar cost averaging in the bond fund helps to hedge against interest rate risk as well as investing in the non bond market in general).
I think my strategy is simple, easy to understand and works. What is your investment strategy towards retirement?
Open a Roth IRA (personally, I choose Vanguard, mods, it is not my intent to spam on behalf of Vanguard)
Allocate 50% in Vanguard S&P 500 index fund
Allocate 20% in Vanguard Morgan Stanely International Index Fund
20% in a small cap value fund
10% in Vangard's Inflation indexed bond fund (it invests in Inflation Adjusted US Treasury Bonds).
My approach is to diversify, take advantage of dollar cost averaging (meaning, take a fixed amount of money every month and invest it according to the above allocation), hedge against credit risk (US Treasury bonds have excellent credit because the government can simply print up money to pay it's bills), inflation risk (international fund and Inflation Adjusted US treasury bonds hedge against inflation and the bonds pay interest according to the new rate of inflation, so inflation never harms the purchasing power of the interest I collect), currency risk (investing in foreign economies through the international index hedges against the US dollor and vice versa), interest rate risk (dollar cost averaging in the bond fund helps to hedge against interest rate risk as well as investing in the non bond market in general).
I think my strategy is simple, easy to understand and works. What is your investment strategy towards retirement?