ETF Investing

[J8127]

I know this is not a hot topic on this board, but I figure with so many intelligent people (and FOGs) on it there must be others who are interested in this sort of thing.

Earlier this year I became interested in managing my savings, investing, etc... I have been contributing to the TSP since I enlisted and plan to do so until I get out and roll it over from there. However, I took a chunk of deployment money and invested it into an all ETF portfolio and at the end of the year I am going to do some shuffling, maybe a complete overhaul, and was wondering if any other money guru's had some thoughts on it.

I invested with a USAA brokerage account, but one of the major changes I am considering is switching to a company that doesn't charge commissions on ETFs so I can rebalance whenever I want or invest small amounts monthly rather than waiting until the end of the year.

Anyway, here is what I picked out thus far. I pretty much went with the funds that had the lowest expense ratio at the time from what I felt were legitimate firms.

U.S. Corporations - 50%
Large Caps - IVV (iShares) - 20%
Mid Caps - IJH (iShares) - 15%
Small Caps - IWM (iShares) - 15%

International Corporations - 20%
Large Caps - VEU (Vanguard) - 10%
Emerging Markets - VWO (Vanguard) - 10%

Commodities (And Real Estate) - 20%
REIT - VNQ (Vanguard) - 10%
Gold - IAU (iShares) - 10%

Bonds - 10%
Corporate Bonds - LQD (iShares) - 5%
Midterm 3-7 Year Bonds - IEI (iShares) - 5%

I'm pretty happy with all of corporate stock funds and my REIT, I've actually made back my commissions and a small profit in just a few months with those, where I'm pretty sure I screwed up is with the Gold ETF and the Bond ETF's. To be honest, with the bonds I just got lazy. I'm 21, so I have plenty of time to be "risky" with this. I don't have a limitless tolerance for risk, but if I didn't want to make money I would just put this all away in a savings account and just lose real dollars every year. I do not have a savings account, I keep the rainy day money yes, but I am investing all of my savings one way or another, and I don't see any other way to beat inflation. My goals for this and the TSP are long term retirement savings. I want to save up a big chunk of cash and then turn it into inflation protected annuities when I retire and not worry about money again. Anyway, for some specific questions,

- Should I switch to a firm that does not charge commissions for ETF trading, even if it meant going with an ETF firm? (I.E. Invest with Vanguard which would mean I would have to own all Vanguard funds) Currently I save the money and at the end of the year I invest a large chunk...and pay commissions. If it were free, I could get the cash into the market sooner, probably not every single month but multiple times a year.

- Does anyone see any flaws in my apportionment plan? I could handle just not having any bonds at all right now, they are all losing money anyway (short term, I know)

- Should I ditch the two bond funds and invest in an all-encompassing bond ETF, and if not, is there a better combination of funds to cover the bond market? I am not interested in buying actual bonds.

- IRT the Gold Fund...I feel now that having 10% of my portfolio in gold is probably pretty stupid. I don't have enough to buy bullion, although I could save the money that would go towards this fund and maybe every other year I could buy another ounce. Would any of you recommend this? What about a general commodities fund or precious metals fund? Combinations? Any advice here, I'm pretty lost.

Thanks in advance, I hope it wasn't too long winded.