Originally posted by: Orsorum
$2000 a month is very, very good by the way. I'm assuming he has a Roth IRA, 401k, etc. Max those out ASAP, obviously, that tax-free growth is vital. Hmm, I would say it's also wise to taylor your entire portfolio towards utilizing the unique aspects of each account. Put your high-tax-liability assets into your tax shelters and try to minimize your tax liability in your taxable accts.
We need a real professional to stop in and sound off, I'm just a kid who took a licensing exam and thinks he knows something.
trust me... most "professionals" don't know anything better.
Just play it safe & simple; put a sizeable amount in stocks (contrary to what was said above, 12 years to retirement is a pretty
long time horizon) and the rest in fixed income instruments (perhaps a little cash too). Remember, there is no reason to limit yourself to domestic stocks/bonds. While US yields may be low, yields in other countries aren't necessarily as low. Combine this with any currency views you might have, and you are set (UK & EU government bonds have done really well for me the past few years due to this).
Try something like:
US Large Caps (S&P 500 or R1000 index fund): 30%
US Small (or mid) Cap (R2000 index fund): 10-15%
US Fixed Income (don't get munis if these are in an IRA or 401k): 20%
Intl Stocks (I would stick with large caps here... maybe an EAFE index): 20%
Intl Fixed Income: 10-15%
Cash: Rest