Every portfolio needs a range of investments
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Dear Mr. Berko:
My wife and I retired last year from different companies. We moved her 403(b) to an IRA and moved my 401(k) to a Schwab IRA. Between the two accounts, we have $407,000 and need you to tell us how this money should be invested. We really liked your comments on no-load funds and exchange-traded funds (ETFs) when we heard you speak in Boca Raton last March. Please tell us how you would manage a portfolio of no-load and exchange-traded funds for us.
F.S., Boca Raton, Fla.
Dear F.S.:
I can’t tell you how I would manage your retirement portfolio. I’d like to, but I can’t without knowing lots of things about you, your wife, your finances, your risk tolerances, your short- and long-term goals, your short- and long-term obligations, your retirement income, your personal balance sheet, your health and your lifestyle.
However, I can give you the following guidelines. Many portfolios should have a portion of their money in aggressive growth. The amount depends on your age, stage and objectives. A no-load mutual fund I like is Fidelity Advisor Small Cap (FSCIX – $22.61). The portfolio tends to follow the Standard & Poor’s Smallcap 600 or the Russell 2000. So far this year, its total return is 22.8 percent.
I also believe that many accounts should own some gold. I like the no-load, $1.3 billion Franklin Gold & Precious Metal Fund (FKRCX – $40.90), which has a 51.2 percent return this year.
Now we must add some growth to this retirement account, and I’m partial to FMI Provident Trust Strategy (FMIRX – $7.55), which has returned 20.7 percent this year. The iShares S&P 500 Growth Index (IVW – $56.65) is an excellent growth ETF.
“Growth and income” is also important to a portfolio, and I’m comfortable with Lord Abbett Fundamental Equity (LDFVX – $10.71), which has a 19.9 percent return this year. Vanguard Value (VTV – $47.90) is a good ETF.
Most accounts also must have international exposure, and I’m partial to Matthews Asian Growth & Income (MACSX – $15.66), which returned 35.7 percent this year. I also like Matthews Pacific Tiger (MAPTX – $18.74), and iShares MSCI EAFE Index (EFA – $57.35) is a good ETF.
Real estate also should be represented, and CGM Realty (CGMRX – $20.15) may be the best, with a 26.4 percent return this year.
On the bond side, I’m impressed with Laudus Mondrian International Fixed Income (LIFNX – $11.71) and Loomis Sayles Global Bond (LSGLX – $16.19) with 9.3 percent and 21.7 percent returns, respectively, this year. PIMCO Total Return (PTTDX – $10.93) is an investment-grade income fund returning 10.9 percent this year.
American Century Inflation-Adjusted Bond (ACITX – $11.62) invests primarily in TIPS (Treasury inflation-protected securities) and has returned 8.4 percent in 2009. And finally, DWS RREEF Global Infrastructure (TOLSX – $8.18) with a 14.9 percent return, and Jennison Natural Resources (PGNAX – $45.90), which posted a 58.3 percent return this year.
These and others could be selected for your portfolio; the allocations depend upon your adviser’s advice after a discussion about your investor profile.
Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@adelphia.net. © Copley News Service
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