RETIREE PORTFOLIO DRAFT #01

I can breathe a *BIG* sigh of relief now that I've roughly hammered a crude version of The Retiree Portfolio. It's like a 6-month long project finally seeing the light of day! Pretty exciting. Yup, I ditched bar-hopping in Hollywood for this-- and it was, well, *almost* worth it, I guess.

The characteristics of this portfolio include the following:

- It contains a 60/40 equity/fixed-income ratio overall asset allocation. Equity = stocks. Fixed-income = bonds and other safe stuff. Every asset, however, is in the form of funds.

- The portfolio has a value tilt to it, meaning, I emphasize value funds over growth funds.

- The portfolio has a small-cap tilt in the US portion of equities.

- The equity portion is split 50/50 between US and International. You'll find that within International there's a small-cap tilt-- for now.

- I want to introduce a value tilt internationally speaking. I may revise the portfolio by replacing the small-cap International asset with a value International fund.

- The portfolio is reasonably sliced and diced. Honestly, it's probably S&D'ed a *taaaad* more than I'd like it to be. Every asset listed does provide some diversification benefit in some way, whether it's in the form of higher returns or reduced risk.

- According to Morningstar, none of the below bonds are long-term, which is exactly what I wanted.

Without further ado, in %-ages, here, finally, in rough-hewn form, I bring you Retiree Portfolio, Rough Draft #1!

Total Market VTSMX 7.5
US large-value stocks VIVAX 7.5
US small stocks NAESX 3.75
US small-value stocks VISVX 5.6
REITs VGSIX 5.6

Pac Rim-large - Vanguard Pac Stock Index - VPACX - 7.5
Europe-large - Vanguard European Stock Index - VEURX - 7.5
Small cap - Vanguard Int'l Explorer Fund - VINEX - 7.5
Vanguard Emerging Markets Stock Index Fund Investor Shares (VEIEX) 7.5

Vanguard Total Bond Market Index Fund Investor Shares (VBMFX) 13.3
Vanguard High-Yield Corporate Fund Investor Shares (VWEHX) 13.3
Vanguard Short-Term Investment-Grade Fund Investor Shares (VFSTX) 13.3

Being as it is, the above portfolio's asset allocation looks like this:
Cash 2.65%
US Stocks 29.75%
Foreign Stocks 28.85%
Bonds 37.65%
Other 1.11%

Also, the heaviest valuations are Large Value and Large Blend / Core, by far.

The above portfolio has a superior expense ratio of only *0.26%*. Other comparable portfolios have an expense ratio of *1.36%*.

I think I'm pretty happy with my first shot at this. I'll spend the next couple of days finalizing the actual target assets and begin the next phase of this effort: planning the execution of it all.

Stay tuned.