
Photograph: Bridal Veil Post Office - Bridal Veil, Oregon
The second 50% of the AA-Mosaic Portfolio will be invested in REITs, international, emerging markets, commodities (or bonds), and cash.
Let’s get cash out of the way as we plan to hold no more than 1% in cash.
As stated before, we plan to invest 20% of the portfolio with developed international countries. From iShares we have a broad based index, EFA. Vanguard’s broad based international ETF is VEU. While these two broad based ETFs will include some emerging market stocks, we are not going to worry about that situation. If we want to specialize in specific countries or areas, we might choose VGK for a European ETF or VPL for an Asia ETF. SCZ is a small-cap international that would be of interest. EFV is an international value play. This ETF is of interest as we prefer value over growth, for reason articulated in prior posts.
Thus far, we have invested in EFA, where we hold 300 shares in the AA-Mosaic Portfolio. We also hold 200 shares of VEU, so we have the broad based international arena covered.
Emerging Markets is where we plan to park another 15%. So far we have invested 100 shares in FXI, a China market. FXI does not give much diversification so ETFs such as EEM and VWO will be next on the list for purchase.
The plan is to place 5% of the portfolio in commodities or bonds. Right now we favor commodities over bonds. DJP and GSG are two choices. DJP is actually an exchange trade note, not an ETF.
For REITs, we have 9% as our target percentage. VNQ and ECF are two primary choices. Thus far we have invested in VNQ at two different times and we now hold 200 shares on this ETF.
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