Financial Plans

The Perfect Investment Mix

Byadmin

Maybe perfect is not the best word. But in previous posts, I’ve talked about organizing my overall portfolio between cash, equities, bonds, and high-dividend funds.

I first tried to create an investment mix here. Looking at that post, it’s probably too complicated. I needed to simplify it.

Later, I tried again to create an ideal investment mix. That’s better.

Also, as much as I crave “safety,” I am starting to feel more confident in simple stock index funds. Something is interesting about the stock market being up 15% year-to-date and me feeling better about being invested in the stock market. You know… human nature and all.

It also might be the fact that my cash bucket should cover more than a year of my current expenses, and so I can afford to ride out almost any storm without having to “sell” any of the more volatile buckets. That doesn’t mean I will be comfortable seeing stocks down 20% again, but I won’t be forced to sell.

So my ideal investment mix is beginning to look like the following:

  • Index Funds – 35%
  • Individual Stocks – 5%
  • High Div ETFs – 30%
  • Bond ETFs – 15%
  • Cash/Money Markets – 15%

I’m not close to that goal, but I’m not surprised or disappointed. I know that I have a high cash balance.

  • Index Funds – 23%
  • Individual Stocks – 4%
  • High Div ETFs – 11%
  • Bond ETFs – 3%
  • Cash/Money Markets – 58%

I need to consolidate the cash and get it into the market. That means I have money parked in several bank accounts, and not all allow me to invest in the market. I need to move the money to a place that provides investment options.

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