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Investment Plans

Investing should come with a plan, but it never does. Here are some plans from very very lazy to Do It Yourself(DIY) plans.

Generally speaking in the tax advantaged account(s), you want to store all the investments that hurt tax-wise. This is things like Fixed Income(bonds), high dividend stocks, etc. Also you generally want to maximize your tax-advantaged space, why pay taxes on stuff if you don't need to!

The very lazy plan

The very lazy answer that is hard to go wrong with is just buy a target-dated Indexed retirement fund. Fidelity offers 2 versions of target dated retirement funds, the 'Index' version and the non-index version. You want the Index version, as they are cheaper ER(expense ratio -- how much it costs you to hold the investment). Just pick the farthest date out that is within your retirement horizon, so no earlier than the year you turn 65 and maybe even 70 or later. It's OK to retire before the date on the fund, but it's not great to retire later than the date on the fund(as your investment growth will be less at the end). The Retirement fund's auto-switch your investing dollars into safer and safer investments as the retirement age approaches, going from 90% equities(stocks) to 50/50 stocks and fixed income(bonds). Here is Fidelity's document explaining how they do that.

Vanguard and Schwab also have target date retirement funds. I would not recommend using any other Brokerage. I personally use Fidelity, it's female owned and offers the CMA account and a 2% cash back credit card, so can almost be a one-stop shop for all of your financial needs.

The less lazy plan

Generally you want to invest IN the market. The USA currently holds about 56% of the entire world by market weight(i.e. 56% of the money invested in the world stock exchanges are in the US) Unfortunately the US has some pretty draconian tax laws for ex-US, so some people choose not to hold market cap weighted global portfolio(or any ex-US at all). If you did, you would hold 100-56 = 44% ex-US investments(something like FTIHX or FZILX). If you choose to hold international, I'd hold a minimum of 10%(as less than that is pointless) and no more than 44%. Most people who recommend international tend to recommend somewhere in the range of 10-40%

For US you would want to hold either the S&P 500(FXAIX or FNILX) or TSM(FSKAX or FZROX). They are 80% identical, and it can be argued that the S&P 500 is a better index to follow.

The DIY plan

If you are looking for other types of things to invest in, I'd recommend sticking to this list especially for newer investors, as it's hard to go wrong holding these. Also the rest of that website/community can be pretty great learning.

Other Investing Options

1) Total Stock market (FSKAX), where you gain and lose money like a gambler, but overall averages about 7% returns year after year.

2) The more traditional boglehead approach, where you get on average 5.5% returns, and also go up and down in the market all the time. which is FSKAX (total stock) & FXNAX (total bond), usually in 60% FSKAX / 40% FXNAX.

3) Some other allocation, see WCI's giant list

4) Ray Dalios All weather portfolio, where you theoretically never lose money, but your gains are within 1% of total stock market(over a long term), so high 6%, almost 7% returns according to history. See the table below for the Fidelity version.

Ray Dalios all weather; Fidelity Version:

%Symbolname
30% FSKAX Fidelity Total Market Index
40% FNBGX Fidelity Long-Term Trs Bd Index
15% FUAMX Fidelity Interm Trs Bd Index
7.5% IAU ETF iShares Gold Trust
7.5% DBC ETF Invesco DB Commodity Tracking

My problem with this is it's heavy on treasuries, which might not be great between 2020-2030, as inflation is thought to be on the rise over the next decade.

Active Investing/Gambling

And lastly, Active Investing, aka Gambling.

This is a 99% everyone is a loser game, because as we know from the economy talk, for every dollar you make someone is losing a dollar, with active investing you not only have to win more than you lose, you also have to cover all the fees as well. So say the market this year will make 7% using FSKAX, so the passive approach will earn you 7% doing nothing. To make active worthwhile you have to make > 7% plus whatever fees might happen. If you actively trade yourself, then the costs are pretty low, let's say .5%. So now your active approach needs to make 7.5% to just break even with passive, not including your time. An actively managed fund, where you pay someone else to gamble with your money, will cost 1-2% easily and sometimes higher. Suddenly you need to earn say 9-10% that year just to pay the management fees without losing money! That's a high bar to achieve, and you still aren't making any money more than a passive fund like FSKAX. Thanks Jack Bogle for letting lazy win!

So seriously, scroll back up and be lazy, you will be rewarded over time. But if you must, you must. I mean I even gamble! But I limit my gambling to 1% of my portfolio, and you can see that down below:

Also of note, is InternationalInvesting

Zie's Investment Plan

Below is my personal plan, feel free to alter/edit to fit your personal goals. Also below that is some other options, if you don't like what I do.

Financial Goals

Note, my plan doesn't include my personal retirement, as my retirement is already 100% funded via pension and Social Security, so my plan and your plan(s) may not be the same, as I can tolerate a lot of risk.

Investment Philosophy: Buy-and-hold, long-term, market index funds.

Asset Allocation: Maintain overall 100% stock. 99% index funds and 1% "play" money, to hold stocks I want to hold directly for various reasons. The allocation does not include cash/fixed income securities below, as they are calculated off of actual expenses(and grow shrink as my expenses grow/shrink).

Funds & Accounts: Use low cost mutual funds - index funds preferably - which do not overlap and provide maximum diversification across asset classes. Try to assume only market risk as far as possible. Try to shelter tax-inefficient funds in tax-advantaged accounts to reduce tax drag.

Allocation Funds:

Symbol Name Holding Account Money Level

various

Play/Fun gambling stocks. IRA 9

FZROX

Total US Stock Market IRA 8

long-term-cash

Fixed Income Securities, Long Term Treasuries, etc Taxable account 6

cash

2 months of expenses in cash CMA 5

Note about cash holdings: 1 month is the current expenses being drained out of the CMA w/ a MMF and the other in savings/brokerage in cash equivalents for next month's expenses. All purchases able to be done via Credit Card(CC) are done via CC, including cell phone bills and the like. My CC has "rewards", might as well earn them! My CC is also my short-term Emergency Fund(EF). I pay it off in full every month. When an emergency happens, I pay via CC, and then liquidate from my fixed income securites as needed to cover the next bill(giving me a full month before I have to pay it). If I need actual cash for an emergency, That's why I have 1 month of cash buffer sitting in my brokerage account.

Note about Fixed Income Securities/long term cash: This is my nest egg and EF, in long-term cash equivalent holdings(and other safer investments). These change from time to time as the market(s) change, generally savings accounts, MMF's, CD's, I-Bonds etc. Just whatever is paying the best @ the time of purchase. This is also for buying longer term things, such as a vehicle, etc. Must be able to sell 1 month of expenses into cash within 30 days.

Other considerations: Automate future contributions wherever possible. Rebalance monthly/quarterly(especially when doing well, to lock in earnings to treasuries). No market timing. Exact sub-allocations are not as important as maintaining the overall 90/10 stock/fixed allocation.

My Active Investing.

Note, for my play/gambling stocks. I don't actively trade. There are some companies that I just want to directly support/own, For example, there is a company called ARTARA THERAPEUTICS INC , stock ticker TARA. They build treatments and cures for rare diseases. I like their mission, and I like their stock ticker name. I will likely never make money off of them. My current investment with them is currently worth $50 at the time of this writing. I may never earn back my $50, but that's OK. I'm not buying it to make money, though if I do, that's awesome. This is an example of the sort of stock I actively buy. I plan to hold that stock until they cease to exist, or I cease to exist. But if their mission changes or starts doing something I'm not a fan of, I'll sell my $50, and find something else to play with.

Another example. I own 1 share of Pepsi Not because I drink Pepsi, but because I drink Gatorade, eat Fritos and Doritos(pepsico owns these brands and many others) and someone I love thought it would be fun to own them, so I do. :) It also happens to be a pretty safe company to own, they are giant, will likely continue to do OK, etc. I own exactly 1 share, and again, unless they go off the deep end and do something I really don't like, I don't see me changing my ownership with them anytime soon.

So my 1% fun/gambling money is probably less than 1% total, but I limit it to 1% max. It's for things I want to be a part of/support for various reasons. If you know me personally and think of a company I should know about, reach out!