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Unique situation - portfolio allocation


New Member
I'm 37 years old, single. No debt. I receive gov't disability, only $14K / yr. I live with family. I do not own a home, but I’d like to someday.

Given that I don’t know when I’ll be back to work, if ever, I am wondering how to allocate my portfolio savings, roughly $87K. Should I invest aggresively to try to grow the money or should I be conservative?

My goal is to not use this money until retirement age. However, If I purchase a home in the coming years I may have to use about 1/3 of it. Perhaps whoever is giving the advice could estimate their answers based on both scenarios.

I am a relatively inexperienced investor, and I could really use some good advice. My current allocation below:

$6K in one individual growth stock (averaging 70% return for the past 5 yrs)
$32K in a Roth Ira (Total Stock Market Index fund)
$6K in Total Stock Market Index fund
$6K in Total Bond Market Index fund
$37K in a CD (annual rate 3.95%)

Some ideas: I was thinking of replacing Total Bond fund with individual stocks, maybe even adding to the stock I have that's doing so well. Should I be agressive and move most money out of the CD and invest it all in mututal funds? Should I play it safe and get individual bonds even though I'm relatively young?

P.S. If don't know if I'll be able to add to this savings. This year I'll try to put away about $2K, if anything.

Many Thanks.


not a plastic bag
If it was me, I would take 1/2 the money out of the CD and place it in a Russell2000 index fund. I would seek further advice on the individual stock and possibly roll that into the Russell2000. The R2000 will give you enough risk while still being diversified. It also makes your money more liquid than the CD in case you need it for a down payment. I would personally suggest a wait and see attitude with both the housing market and the stock market with regard to individual stocks. After the new year I think more people will have an idea of where the economy is really heading. I would also start looking into forclosure options. With that kind of cash on the sidelines, you could swing a foreclosed house through HUD and save a ton of money. There are a lot of balloon loans out there and if rates keep going up, there will be some good opportunities coming for people with cash.