Picking the Right Stocks and ETF’s for a Retirement Portfolio – The Trader Chick’s Picks

Now that you understand the importance and simplicity of starting a retirement fund, it’s time to pick the right portfolio for you.

Retirement funds, on a whole, should be way less risky than your normal portfolio.

The one thing I did keep as a constant for both my portfolios was that I only invested 10% of my portfolio into fixed income. This is a really aggressive move – as most ‘experts’ will say because it is recommended, especially for your retirement fund, that you put in your age as the percentage for fixed income. In my case it would be around 40%. But I’m just not into that.

NOTE: You should invest what your risk tolerance permits you to do. If you want to go super conservative cause that’s what you feel most comfortable with, then that’s what you should do. I’m just showing you my picks. In no way should you be influenced to think this is the only right way to go. 

What I didn’t keep constant was pretty much everything else. Also, I had a lot more room to play with in my regular portfolio set up.

The Trader Chick’s Picks for a Retirement Portfolio

Even though I didn’t go with all the same stocks, ETF’s, Index funds and REIT’s, I didn’t add anything different.

Dividend Paying Stocks and EFT’s

The only EFT I ended up from the part of my dividend paying stocks and EFT’s was an diversified fund. That’s almost true, I have a sizable portion of my Roth IRA with Apple (AAPL). I actually bought this stock a while back and since then it has given a dividend and is about to do a stock split. So unless you are totally head over heals in love with a company, I wouldn’t recommend individual stocks in this portfolio.

Also, instead of investing $1000 for the stocks, ETF’s and REIT’s like I did for my regular portfolio, I am investing $2000. And for the index funds $3000, except for one.

iShares Select Dividend ETF (DVY) – This is another one of those ETF funds that has a good mix of the top paying Dow Jones dividend companies. It is a great asset to have in my portfolio for its diversity. Plus the yield is around 3% combined of companies that I would like to own, but are way too expensive for me right now.

REIT Funds

For the REIT ETF part of the portfolio, I decided to stick to only the ETF’s which are diversified funds rather than just one trust, similar to individual stocks. This is the least safest part of my portfolio. REIT’s are considered to be quite risky, but with their dividend yields high, I feel comfortable investing with them. I just have to keep an eye on them, cause you never know if the floor will fall out from under them.

Vanguard REIT Index EFT – (VNQ) – This is one of the best REIT EFT’s on the market tracking all the top leaders in the REIT industry. Plus, almost a 3% dividend payout.

Market Vectors Mortgage REIT (MORT) – This high yield dividend ETF (13%) works directly with the Market Vectors Global Mortgage REITs Index. In other words, the majority of its assets are US stocks that are being traded that work with mortgages.

iShares Mortgage Real Estate Capped (REM) – This is another ETF that focuses mainly on stocks holding US residential and commercial mortgages. And even though I have MORT, the dividend yield on this ETF was way too tempting – almost 16%!

Index Funds

The Index ETF part of my portfolio is by far my largest investment of my entire IRA account. I chose to invest $3000 for all of them, except for the VTI fund, which I kept at $2000. These are considered to be the safest and most passive investing you can do for your portfolio. Kind of buy it and leave it sort of deal. And most of them even offer up a dividend. It’s moderate to small, but something is better than nothing.

SPDR S&P 500 (SPY) – This is a fund that literally tracks all the stocks from the Standard & Poors 500 Index which are chosen carefully by a committee. The dividend yield for this one is moderate around 2.30%.

iShares Dow Jones US (IYY) – this ETF keeps track of all the Dow Jones Industrial average. The Dow Jones keeps track of 30 blue chips stocks listed on the New York Stock Exchange. The oldest index tracker for the financial markets. And has a moderate dividend as well of 2.30%.

Powershares (QQQ) – this ETF tracks the NASDAQ 100 trust. The giants of the technology industry in the financial markets. It is the only stock in my account that doesn’t offer any dividend payout at all.

Vanguard Total Stock Market ETF (VTI) –  You have to have the full market in here. This is 5000 of the top traded stock in the US. And it even has a bit of a dividend at 1.75%.

Happy Trading,

Marina 'The Trader Chick' Villatoro

This entry was posted in Day Trading. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *

CommentLuv badge