Annual Investment Portfolio Checkup

[mwow83]

It's that time of year again and need an annual Boglehead checkup. I'd like to meet my target allocation of 40% U.S. stock, 30% Intm bond, 20% Foreign Stock, 10% Real Estate (REIT).

Our Info:
Emergency Fund: Yes - 12months
Debt: $170k mortgage @ 3.375%
Tax Filing: Married filing Jointly
Tax Rate: 25% Federal, 0% State (Florida)
Annual Household Income: $120k
Age: 30/29
Target (desired) Asset Allocation: 40% U.S. stock, 30% Intm bond, 20% Foreign Stock, 10% Real Estate (REIT)

Current Portfolio
His 401k:
Total Value: $95k
Annual contribution: 13% ($10,270 - 7% traditional & 6% roth)
Company Match: 100% up to 8% ($6,320)

0% Government Short Term Investment Fund HSJYX (0.17%)
0% Stable Value Fund (0.3%)
0% Broad Market Bond Index Fund NOBOX (0.13%)
35.4% ($50,550) S&P 500 Indexed Equity Fund SVSPX (0.11%)
0% Value Equity Fund IWD (0.37%)
0% Investment Company of America Fund RICFX (0.1%)
0% American Century Growth Fund (0.52%)
8.3% ($11,800) Small / Mid-Cap Indexed Equity Fund MASKX (0.12%)
0% New Perspective Fund RNPFX (0.1%)
17.1% ($24,450) MSCI EAFE Indexed Equity Fund EFA (0.14%)
0% Global Real Estate Fund IRGIX (1.0%)
5.5% ($7,925) Emerging Markets Indexed Equity Fund NOEMX (0.22%)


His Trad at Vanguard

3.6% ($5,160) Vanguard REIT Index Fund (VGSIX) (0.24%)


His Roth at Vanguard

2.2% ($3,200) Vanguard REIT Index Fund (VGSIX) (0.24%)


His Treasury I-Bond

3.6% ($5,100)


Her 403b
Total Value: $27,500
Annual contribution: 3% ($1,170 - traditional – not allowed by employer to increase contribution)
Company Match: 100% up to 4% ($1,560)

0% PIMCO Total Return Fund (0.6)
19.2% ($27,500) Pyramis Intermediate Duration Pool Fund (0.11)
0% Pioneer Fund (0.74)
0% Prudential Mid-Cap Quantitative Core Equity Fund (0.35)
0% Fidelity Growth Company Fund (0.68)
0% American Beacon Small-Cap Value Fund (0.82)
0% American Funds Euro-Pacific Growth Fund (0.5)
0% American Funds New Perspective Fund (0.53)


Her 457 deferred compensation
Total Value: $7,250k
Annual Contribution: $3,850

0% Neuberger Berman Core Bond (NCRAX, 0.87% and 4.25% Front Load)
5.1% PIMCO Total Return (PTRRX, 1.1%
0% Federated Bond (FDBAX, .99% and 4.5% Front Load)
0% PIMCO High Yield (PHDAX, .9% and 3.75% Front Load)
0% Franklin High Yield (FHAIX, .76% and 4.25% Front Load)

As always, thanks for the feedback!

[mwow83]

I really need help making sure my target allocation is correct. Really looking forward to your comments!

[hoppy08520]

I really need help making sure my target allocation is correct. Really looking forward to your comments!

I'm not really sure what your question(s) actually are. Are you wanting to make sure your math is correct? One thing that might help, in your original post, can you make the percentages be the amount of each fund as a percentage of the entire portfolio, not of each account? This makes it easier to figure out your AA. All the percentages should add up to 100% overall.

See suggested format guidance in Asking Portfolio Questions:

* Please make sure that percentages add up to 100% across all of your accounts, not within each account.

For example, this:

100% ($5,160) Vanguard REIT Index Fund (VGSIX) (0.24%)

would change to this, since 5160/95000 is 5.4%:

5.4% ($5,160) Vanguard REIT Index Fund (VGSIX) (0.24%)

[mwow83]

I really need help making sure my target allocation is correct. Really looking forward to your comments!

I'm not really sure what your question(s) actually are. Are you wanting to make sure your math is correct? One thing that might help, in your original post, can you make the percentages be the amount of each fund as a percentage of the entire portfolio, not of each account? This makes it easier to figure out your AA. All the percentages should add up to 100% overall.

See suggested format guidance in Asking Portfolio Questions:

* Please make sure that percentages add up to 100% across all of your accounts, not within each account.

For example, this:

100% ($5,160) Vanguard REIT Index Fund (VGSIX) (0.24%)

would change to this, since 5160/95000 is 5.4%:

5.4% ($5,160) Vanguard REIT Index Fund (VGSIX) (0.24%)

Alrighty, I have edited my initial post with the entire portfolio percentages. My goal is to make sure I have my target allocation of 40% U.S. stock, 30% Intm bond, 20% Foreign Stock, 10% Real Estate (REIT).

[hoppy08520]

Alrighty, I have edited my initial post with the entire portfolio percentages. My goal is to make sure I have my target allocation of 40% U.S. stock, 30% Intm bond, 20% Foreign Stock, 10% Real Estate (REIT).

Thanks. When I added these up in a spreadsheet, I see:

43.7 - US Stock
22.5 - International
5.8 - REIT
27.9 - Bonds
100% total

You can't get to 10% REIT because your IRAs aren't big enough, so you'll just need to make do with the 5.8%. Your bond allocation is a bit below what you'd like. To correct that, you can shift some of the stocks in His 401k into the NOBOX bond fund, which tracks the Barclays US Agg Bond benchmark which is mostly intermediate term bonds but some long term as well (per http://www.brightdirections.com/pdfs/in ... X-fact.pdf). Perhaps, if you're rebalancing shift 0.75% each from the 500 index and EAFE fund into the Bond fund, and also shift 0.25% each from the Mid/Small and EM funds. That's 2% total and gets you up to 29.9% bonds overall.

0% Broad Market Bond Index Fund NOBOX (0.13%)

Other thoughts:

Including REIT as US stock, your US/Intl split is 69/33. You want to be 71/29, so you're close there.

The ratios you have for 500 Index : Mid/Small is 81/19 which looks about right. When I plug your amounts into Morningstar Instant XRay, it looks like your holding give you a slight small cap tilt, if that's what you're looking for.

The ratios you have for MSCI EAFE : EM is around 75/25, which is probably about right, although according to Morningstar, your "emerging markets" fund is actually only 75% EM and 25% developed markets. Keep in mind that your international holdings have 0% in small cap stocks. I believe small cap stocks are around 10% of the investable international stock market. If/when you get your IRAs bigger, then you might want to look into a small cap intl fund (VFSVX/VSS) or see if you can hold Vanguard Total Intl Stock Market Index fund (VGTSX) in the IRAs if you want a more complete international holding.

Overall, I think your "checkup" looks pretty good and you seem to be pretty close to where you want to be, although you can't get to 10% REIT given your accounts unless there's another REIT fund hiding in one of the employer plans that you didn't list or I didn't notice.