The Retirement Advisor
Information and model portfolios to help you enjoy the retired life
Model Portfolios for investors who are near or enjoying the retirement lifestyle. Specific No-load mutual fund recommendations, best CD rates and savings bond offerings.
Jan 1, 2007
For 2007, I have partnered with investment newsletter writers, David Korn and Henry To, to produce "The Retirement Advisor Portfolios."
The Retirement Advisor Aggressive Portfolio seeks maximum return to beat inflation. This portfolio is best suited for people approaching or just entering their retirement years. It is also good for those who want to retire early and use their assets to fund their dreams at a lower rate of pay using their portfolio to make up the difference until Social Security kicks in.
- $40,000 in Vanguard Short Term Bond Index Fund
- $20,000 in Vanguard Intermediate Bond Index Fund
- $10,000 in Vanguard Long Term Bond Index Fund
- $30,000 in Vanguard Inflation Protected Securities Fund
- $40,000 in Vanguard S&P 500 Index Fund
- $16,000 in Vanguard Extended Market Index Fund
- $16,000 in Vanguard European Stock Index Fund
- $16,000 in Vanguard Pacific Stock Index Fund
- $12,000 in Vanguard Emerging Market Stock Index Fund
The Retirement Advisor Moderate Portfolio seeks to maintain the current standard of living for many decades. This portfolio is best suited for people who enjoy a retired lifestyle and seek to maintain their standard of living, even with inflation.
- $56,000 in Vanguard Short Term Bond Index Fund
- $30,000 in Vanguard Intermediate Bond Index Fund
- $20,000 in Vanguard Long Term Bond Index Fund
- $36,000 in Vanguard Inflation Protected Securities Fund
- $24,000 in Vanguard S&P 500 Index Fund
- $10,000 in Vanguard Extended Market Index Fund
- $10,000 in Vanguard European Stock Index Fund
- $10,000 in Vanguard Pacific Stock Index Fund
- $4,000 in Vanguard Emerging Market Stock Index Fund
The Retirement Advisor Conservative Portfolio invests in securities that, as a whole, do not lose money. This portfolio is best suited for retired people in their later years who do not want any net asset value risk and who need very little inflation protection.
- 70,000 in Vanguard Short Term Bond Index Fund
- $50,000 in Vanguard Intermediate Bond Index Fund
- $30,000 in Vanguard Long Term Bond Index Fund
- $50,000 in Vanguard Inflation Protected Securities Fund
More information: Get more information about the funds in these portfolios including annual expenses and past performance data on pages 7, 8 & 9.
Asset Allocation Changes:
Both the Federal Reserve and Economic Cycle Research Institute, ECRI, agree that economic growth will expand but at a slow rate while inflation pressures will remain in check. This is great news for the economy plus the stock and bond markets. Fears of a recession, market over valuation based on the "Fed Model" or run-a-way inflation would lead us to recommend a more defensive asset allocation for our model portfolios.
Rebalancing:
Investors looking for the ultimate in simplicity while having a well diversified portfolio (22% of The Retirement Advisor Aggressive Portfolio is in international funds) can follow the above portfolio allocations and rebalance once a year.
We recognize that the markets are dynamic and investors can add to their returns by rebalancing more often as I explain in my article "Using Asset Allocation to make money in a Flat Market." We will rebalance the above portfolios as market conditions indicate to capture this extra return. For example, if one of our recommended funds is up 10% relative to the others, then we might recommend selling some of that fund to purchase the funds that are down.
Best CD rates and Savings bonds
Keep checking back for more articles that discuss CDs and savings bonds (U.S. Treasury notes, bonds and bills, Municipal Bond offerings, I Bonds, and EE Bonds). Make sure you check out our discussion forum:
Disclaimer: The information contained in this article is not intended to constitute financial advice and is not a recommendation or solicitation to buy, sell or hold any security. This article is strictly informational and educational and is not to be construed as any kind of financial advice, investment advice or legal advice.
