Need Guidance with Asset Allocation - Roth IRA

📈 Investing & Markets Community Portfolios
#1

Hello,

I have been investing in the following mutual funds:

  • AMAGX - 51.68% of the total IRA Fund
  • AMANX - 31.02% of the total IRA Fund
  • IMANX - 17.30% of the total IRA Fund

I would like to diversify my portfolio further and would like to allocate it to other funds.

I have been reading about SPUS, HLAL, SPRE, UMMA and others. Can someone please help with asset allocation for my ROTH IRA to make it more balanced and recommend what other halal funds are available in the US and what I should add to my portfolio?

Thank you!

#2

As-salamu Alaykum,

Halal and haram funds aside, there is a general rule for asset allocation

The younger you are, the most stocks you want
The older you are, the more fixed income you want

For example:
18-45, almost 100% stock
46-65, 70/30 stock to fixed income
66-75, 15/85 stock to fixed income
76+, almost 100% fixed income

This is just a mock example and not a hard and fast rule.

Big investors and well known players have their own styles and rules.

You can take a look at Financial Tortoise’s videos on fund allocation, it’s very good.

In principle, you want to start lowering risk the older you get.

Whilst you’re young, have a good global exposure as a means of reducing risk but increasing exposure to good returns.

Many just invest in the US as the big US tech companies and healthcare often have global constituency (example, NVDA is American but used all over the world).

My personal allocation of funds is:
31% world
30% US
14% Japan
12% EU
5% EM
5% Gold
3% SUKUK

Then my pensions and retirement is 100% index.

In summery, there is not strict rule and is based on your risk appetite and age.

Try not to overcomplicate, simple and manageable portfolios are the best in my opinion.

Jazakhalla khairan,
Maheen

#3

Thank you Maheen for your detailed response. This is very helpful.

#4

Wa iyyaka akhi