Introduction to Justin’s Roth IRA Account

By:  Justin Holden


  • An in-depth view of my Roth IRA holdings with Charles Schwab
  • Long time horizon (more than 30 years from retirement age)
  • An explanation of investing strategy on this particular account


My first article in the series included an introduction to my investing philosophy and I listed securities held in my individual brokerage account with TD Ameritrade at the time.  Since that point in time, I have fully fleshed out my Roth IRA account with Charles Schwab.  I’ve found that my approach to investing in a retirement account is quite different from an individual brokerage account.

I purchase stocks and ETF’s with the intention to hold indefinitely and re-invest dividends.  I have no exposure to bonds nor bond funds.  I try not to buy anything that I can’t see myself holding to retirement age.  I try to be fully invested in securities and not carry a significant cash balance on the account.  I chose Charles Schwab because the commissions on buying individual stocks are relatively low ($4.95 per trade) and there’s a solid selection of commission-free ETF’s on Schwab’s select list.  All ETF’s bought for my Roth IRA are from Schwab’s select list and therefore I pay no commissions on the trades.  In addition, expense ratios on the ETF’s I invested in are quite low.  This is all part of the plan.  I don’t want my investments to be cannibalized by high expense ratios.

Analyzing the holdings in my Roth IRA up to this point, one might conclude that I focus too much on value and dividend growth when I should be focused more on picking a solid growth stock given my long time horizon.  This is a valid criticism.  However, I’d prefer to wait until a market crash scenario before researching a good growth stock to add to my Roth IRA.  I simply don’t like paying above 20 P/E multiples for stocks.  It just bugs me for some reason.  Anyway, without further ado, here are my current Roth IRA holdings:

Equities Price (as of 10/24/18) Cost Basis % of account
VTR $56.78 per share $52.36 per share 12.53
BLK $378.66 per share $385.67 per share 12.19
KIM $14.92 per share $14.13 per share 11.94
TAP $59.34 per share $61.09 per share 10.96
PRU $90.82 per share $96.83 per share 10.82
ETF’s Price (as of 10/24/18) Cost Basis % of account
MDYV $48.08 per share $52.18 per share 10.36
SCHF $30.13 per share $33.64 per share 10.35
SLYV $59.75 per share $66.67 per share 10.3
SCHD $49.05 per share $49.79 per share 10.17

I view the ETF’s as a necessary part of this retirement account for the sake of diversifying my investments and to hedge against the risks associated with my own stock picking skills.  The dividend reinvestment strategy on all securities will help to dollar cost average the account over time, and scoop up some shares on the cheap as we head towards a potential bear market.

Over time, I’d definitely like to continue diversifying my investments to the point where an individual stock makes up no more than 5% of the total account value.  I can achieve this by adding more stocks to the Roth IRA portfolio, or by increasing my percentages in the ETF’s.  I consider all ETF’s in this account to be low risk because they each have diversification among hundreds (or thousands in the case of SCHF) of securities.  Furthermore, each ETF has relatively high assets under management and very low expense ratio.  I can definitely sleep well at night with these ETF’s, without a doubt.

But I want to be invested in some individual stocks as well because that helps keep me engaged and also creates the potential of “alpha” returns by hitting a home run on an excellent stock.  The decision to not include bonds nor bond funds is because A) I am less knowledgeable on them B) I have a long time horizon C) It is a well known fact that stocks outperform bonds over the long run.

This concludes the introduction to my Roth IRA.  Please remember that earnings on Roth IRA accounts are tax-free, but cannot be withdrawn without penalty until you reach the requisite retirement age of 59 and a half.  There is also a limit to how much money you can contribute to this type of account per tax year.  For me, that limit is $5,500.

Disclosure: I am long BLK, VTR, KIM, TAP, PRU, MDYV, SCHF, SLYV, SCHD.

Additional disclosure: I am not a registered finance professional of any kind. Please do your own research and due diligence before making investment decisions.  While I only mentioned abbreviated ticker symbols in the article, you can type those ticker symbols into Seeking Alpha or Yahoo Finance to get more information about the actual stocks and ETF’s that I am invested in.


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