Portfolio review: A check-up on my progress
Posted: Sat Jan 19, 2013 3:15 pm
Hello everyone. Last May I posted a slightly abbreviated portfolio overview with a focus on my wife's new 401k and received some good feedback. That thread can be found here.
At that time, I was just starting to implement some of the many things I'd learned from this forum. Since then, I've made good progress on my plan, but I was hoping for a portfolio review and some feedback on a few questions that are bouncing around in my head. Thanks for everything I've learned from this forum and thanks in advance for any feedback folks are willing to provide.
Ages: 34/30, Baby Girl - 5 months
Emergency Funds: Yes (my portfolio has grown to the point where I'm comfortable including my EF within my portfolio as a whole - see below)
Debt: 108k @ 3.85% (mortgage, pay $250 extra each month, ~$55k in equity), 11k @ 1.99% (1 vehicle)
Target AA: 80/20 (Int'l 20% of total portfolio, 25% of stocks)
Actual AA: 80/20 (Int'l only 10% of total, 12.5% of stocks)
Tax Rate: 25% Fed, 7% MN
Portfolio size: Mid 6 figures.
Taxable - 27%
8% Vanguard Total Int'l (VTIAX and VFWAX combo due to tax-loss harvesting, .18 ER each, combined ~$3k unrealized capital gains so I don't plan on consolidating)
4% Vanguard Total Stock (VTSAX, .06 ER, with ~$3k unrealized capital gains)
5% Misc stocks (Sold all losses or marginal gains, still have ~$10k in unrealized gains; will keep an eye open for selling opportunities in 2013)
5% Ameriprise Floating Rate Bond Fund (RFRAX, 1.09 ER)
10% Vanguard Target 2030 (VTHRX, .18 ER, Currently 55/24/21 - US stock / Int'l / Bond)
5% PIMCO Total Return Institutional (PTTRX, .46 ER)
6% MSI S&P 500 (Private fund, .03 ER)
His Roth - 28%
3% Vanguard Total Stock (VTSAX, .06 ER) <-- contributions go here
25% Ameriprise Active Diversified Aggressive (transferring to Vanguard over the rest of 2013)
Her 401k - 15% - options listed in previous thread here
15% Principal Large Cap S&P 500 R3 (PLFMX, .73 ER)
Her Roth - 9%
4% Vanguard Extended Market (VEXAX, .14 ER, Total Market Approximation with S&P500 in Her 401k in 80/20 ratio) <-- contributions go here
3% Vanguard Total Stock (VTSAX, .06 ER)
2% Vanguard Total Bond (VBTLX, .10 ER)
His 401k Options:
Stable Value - NY Life Anchor III (Private Fund, .45 ER)
Income - PIMCO Total Return Institutional (PTTRX, .46 ER)
Income - Legg Mason BW Global Opportunities Bond Fund (GOBSX, .64 ER)
Blend - Vanguard Target Date funds 2010/20/30/40/50/60 (.17 - .19 ER)
Blend - Vanguard Wellington Admiral shares (VWENX, .19 ER)
Stock - MSI S&P 500 (Private Fund, .03 ER)
Stock - Dodge & Cox Stock Fund (DODGX, .52 ER)
Stock - Earnest Mid Value Fund (Private Fund, .55 ER)
Stock - Earnest Small Value Fund (Private Fund, .55 ER)
Stock - Munder Mid Cap Core Growth (Private Fund, .68 ER)
Stock - Times Square Small Growth (TSCIX, 1.07 ER)
Stock - Vanguard PRIMECAP Admiral shares (VPMAX, .36 ER)
Int'l - Dodge & Cox Int'l Stock Fund (DODFX, .64 ER)
Int'l - MassMutual Premier Focused Int'l (MOUZX, 1.08 ER)
Annual Contributions:
Max ($17.5 ea.) to his & her 401k plus ~$10k company matches (combined his & her)
Max ($5.5k ea.) to his & her Roth IRA
Next Steps:
- Convert VTSAX in Her Roth IRA to Vanguard Total Int'l (VTIAX) to get closer to my target AA
- Convert VTSAX in His Roth IRA to Vanguard Extended Market (VEXAX) as a Total Market Approximation for the S&P 500 in His 401k
- Continue migrating His Ameriprise Roth IRA to Vanguard; add Total Int'l (VTIAX) to His Roth IRA to get closer to my target AA
Questions:
#1. Holding the Bond Fund in my taxable account is obviously not tax-efficient. Because I have significant capital gains in that fund, I will be donating the appreciated shares to various charitable organizations over the next year or so (as opposed to making cash donations). However, by taking this approach, I will fall below my target AA, so I need to make an adjustment / contributions elsewhere. Options:
#2. My rewards checking has dropped from 3% to 2.5% to 2% over the past 6 months. Would it make any sense to convert a portion (say 1/3 or 1/2) of that to a short-term tax-exempt bond fund or iBonds, given the low rates in those places as well? That would move me toward a two-tier EF, which I would be OK with.
#3. Should I start funding a 529 plan? Would it make sense to sell part of my taxable holdings in order to fund a 529? The MN 529 doesn't appear to have any immediate tax benefits for contributions.
#4. Any other feedback anyone is willing to share?
At that time, I was just starting to implement some of the many things I'd learned from this forum. Since then, I've made good progress on my plan, but I was hoping for a portfolio review and some feedback on a few questions that are bouncing around in my head. Thanks for everything I've learned from this forum and thanks in advance for any feedback folks are willing to provide.
Ages: 34/30, Baby Girl - 5 months
Emergency Funds: Yes (my portfolio has grown to the point where I'm comfortable including my EF within my portfolio as a whole - see below)
Debt: 108k @ 3.85% (mortgage, pay $250 extra each month, ~$55k in equity), 11k @ 1.99% (1 vehicle)
Target AA: 80/20 (Int'l 20% of total portfolio, 25% of stocks)
Actual AA: 80/20 (Int'l only 10% of total, 12.5% of stocks)
Tax Rate: 25% Fed, 7% MN
Portfolio size: Mid 6 figures.
Taxable - 27%
8% Vanguard Total Int'l (VTIAX and VFWAX combo due to tax-loss harvesting, .18 ER each, combined ~$3k unrealized capital gains so I don't plan on consolidating)
4% Vanguard Total Stock (VTSAX, .06 ER, with ~$3k unrealized capital gains)
5% Misc stocks (Sold all losses or marginal gains, still have ~$10k in unrealized gains; will keep an eye open for selling opportunities in 2013)
5% Ameriprise Floating Rate Bond Fund (RFRAX, 1.09 ER)
- - To be used for charitable contributions; see Question #1 below
- - This is my EF and I count it toward my bond/fixed-income allocation; see Question #2 below
10% Vanguard Target 2030 (VTHRX, .18 ER, Currently 55/24/21 - US stock / Int'l / Bond)
5% PIMCO Total Return Institutional (PTTRX, .46 ER)
6% MSI S&P 500 (Private fund, .03 ER)
His Roth - 28%
3% Vanguard Total Stock (VTSAX, .06 ER) <-- contributions go here
25% Ameriprise Active Diversified Aggressive (transferring to Vanguard over the rest of 2013)
Her 401k - 15% - options listed in previous thread here
15% Principal Large Cap S&P 500 R3 (PLFMX, .73 ER)
Her Roth - 9%
4% Vanguard Extended Market (VEXAX, .14 ER, Total Market Approximation with S&P500 in Her 401k in 80/20 ratio) <-- contributions go here
3% Vanguard Total Stock (VTSAX, .06 ER)
2% Vanguard Total Bond (VBTLX, .10 ER)
His 401k Options:
Stable Value - NY Life Anchor III (Private Fund, .45 ER)
Income - PIMCO Total Return Institutional (PTTRX, .46 ER)
Income - Legg Mason BW Global Opportunities Bond Fund (GOBSX, .64 ER)
Blend - Vanguard Target Date funds 2010/20/30/40/50/60 (.17 - .19 ER)
Blend - Vanguard Wellington Admiral shares (VWENX, .19 ER)
Stock - MSI S&P 500 (Private Fund, .03 ER)
Stock - Dodge & Cox Stock Fund (DODGX, .52 ER)
Stock - Earnest Mid Value Fund (Private Fund, .55 ER)
Stock - Earnest Small Value Fund (Private Fund, .55 ER)
Stock - Munder Mid Cap Core Growth (Private Fund, .68 ER)
Stock - Times Square Small Growth (TSCIX, 1.07 ER)
Stock - Vanguard PRIMECAP Admiral shares (VPMAX, .36 ER)
Int'l - Dodge & Cox Int'l Stock Fund (DODFX, .64 ER)
Int'l - MassMutual Premier Focused Int'l (MOUZX, 1.08 ER)
Annual Contributions:
Max ($17.5 ea.) to his & her 401k plus ~$10k company matches (combined his & her)
Max ($5.5k ea.) to his & her Roth IRA
Next Steps:
- Convert VTSAX in Her Roth IRA to Vanguard Total Int'l (VTIAX) to get closer to my target AA
- Convert VTSAX in His Roth IRA to Vanguard Extended Market (VEXAX) as a Total Market Approximation for the S&P 500 in His 401k
- Continue migrating His Ameriprise Roth IRA to Vanguard; add Total Int'l (VTIAX) to His Roth IRA to get closer to my target AA
Questions:
#1. Holding the Bond Fund in my taxable account is obviously not tax-efficient. Because I have significant capital gains in that fund, I will be donating the appreciated shares to various charitable organizations over the next year or so (as opposed to making cash donations). However, by taking this approach, I will fall below my target AA, so I need to make an adjustment / contributions elsewhere. Options:
- a. Make taxable contributions to Vanguard Total Int'l, adjust His 401k and/or Roth IRAs to maintain 80/20 AA
b. Make taxable contributions to a Tax-Exempt Bond Fund (like Vanguard Intermediate-term VWITX)
c. Make taxable contributions to iBonds
#2. My rewards checking has dropped from 3% to 2.5% to 2% over the past 6 months. Would it make any sense to convert a portion (say 1/3 or 1/2) of that to a short-term tax-exempt bond fund or iBonds, given the low rates in those places as well? That would move me toward a two-tier EF, which I would be OK with.
#3. Should I start funding a 529 plan? Would it make sense to sell part of my taxable holdings in order to fund a 529? The MN 529 doesn't appear to have any immediate tax benefits for contributions.
#4. Any other feedback anyone is willing to share?