HelIo, my name is Jack and I am brand new to investing as I am only 24 and want to diversify with a more globalized portfolio to battle impending inflation and the 'not so looming' recession. I want to buy an ETF in India, because I hear that's what is hot right now, as well as ETFs in China apparently. I believe I have great levels of risk tolerance and that I would like to hold positions for the long haul. Which one's do you recommend for a beginner such as myself, and why? Also, my mom who has a relatively extensive portfolio is looking to UP her earnings, I tell her Asia is the way to go... Am I right? I don't want to mislead my own mom! I appreciate any advice you have!!! One more thing, How do you go about beginning to invest in foreign markets, like who do I contact or through what channels. Is it the same as investing at home? REALLY, THANK YOU VERY MUCH FOR YOUR TIME AND ASSISTANCE, I ASSURE YOU IT IS VERY MUCH APPRECIATED!

Fast Eddie:

I plan to retire in 20 to 25 years (I am 43).  

I have played around a little with XRay but I am not a knowledgeable financial person, so I could use some ideas. 

First, I think it is important to have 6 months of money to pay your bills in an emergency fund in a money market account and/or high interest savings account.  I also think it is important to own your own home and for most people at 43, this means that they have a percentage of their assets in real estate because they have built some equity in their homes.

Assuming you have an emergency fund and own your own home, at 43 with 25 years to retirement, I would go with this asset allocation:

70% common stocks

30% bonds/preferred stocks (fixed income)

For the 70% in stocks, I would have a mix of US and foreign of 50:50, with the latter being 90% Western Europe/Canada/Australia, Japan and Asia (excluding China).  The other 10% I would have in a mix of emerging markets - Latin America/Eastern Europe/China.

For the 70% in stocks, I would have a mix of 50:50 value:growth stocks.

For the 30% in fixed income, I would invest 80% in intermediate duration, high quality corporate bonds and preferred stocks with 20% in lower quality, high yield bonds.

 

This asset mix is in line with my risk tolerance.  If you are more risk tolerant, then you could put a higher percentage in stocks and more growth and/or emerging market stocks. 

Paul, thanks for the reply and for the suggestions.  I wasn't thinking when I made my post... I took for granted that everyone would know the tickers.  I will indeed put together a more acceptable post with names and their symbols.  Sorry to everyone for this: I assumed I was the only non-expert!

Thanks again for the reply.

-Eddie

KCallie, thank you for the reply and for the very detailed information.  I sort of see where you are going with the suggestions, and it is very helpful to me in planning my own strategy.  I have to do a lot of educating myself, and your comments will help me with that.  Thank you for the reply!

-Eddie

Fast Eddie:

KCallie, thank you for the reply and for the very detailed information.  I sort of see where you are going with the suggestions, and it is very helpful to me in planning my own strategy.  I have to do a lot of educating myself, and your comments will help me with that.  Thank you for the reply!

-Eddie

You are welcome, Eddie. The rule of thumb that I used is that you should have a percentage of your assets equivalent to your age in fixed income investments - cash/bonds/CDs/money market funds/annuties.  The rest in stocks. 

Since I start from the assumption that you will have a 6 month emergency fund in a money market or high interest savings account (which are fixed income investments), I went with a 30% allocation in your 401(k) to fixed income.  Since I don't know what percentage of your net worth 6 months of your bills are, I may have allocated too much for fixed income in your 401(k).  I was guessing 6 months of bills would be about 15% and that is how I arrived at my numbers.

M* has tutorials on asset allocation somewhere on the site.  Click around and you should find those.

obrienjackj:

HelIo, my name is Jack and I am brand new to investing as I am only 24 and want to diversify with a more globalized portfolio to battle impending inflation and the 'not so looming' recession. I want to buy an ETF in India, because I hear that's what is hot right now, as well as ETFs in China apparently. I believe I have great levels of risk tolerance and that I would like to hold positions for the long haul. Which one's do you recommend for a beginner such as myself, and why? Also, my mom who has a relatively extensive portfolio is looking to UP her earnings, I tell her Asia is the way to go... Am I right? I don't want to mislead my own mom! I appreciate any advice you have!!! One more thing, How do you go about beginning to invest in foreign markets, like who do I contact or through what channels. Is it the same as investing at home? REALLY, THANK YOU VERY MUCH FOR YOUR TIME AND ASSISTANCE, I ASSURE YOU IT IS VERY MUCH APPRECIATED!

Please start your own thread if you have questions.

Eddie,

Will you have a pension from the state?  Is it a defined benefit plan or defined contribution?  The existence of the pension would impact your AA.  Are you married?  Does your spouse have accounts.  My husband and I treat all of our accounts as one portfolio and planned around what we had available in different accounts.

Roberta