1. 403b account: There is an awful choice of funds. How can I max out my 403b to 22,500 a year, including my employers match, with the following limited choice of funds?
15% spartan US bonds index - exp ratio 0.17 I would increase this to 17%.
15% Blackrock inflation protection bond - ER 0.48 I would increse this to 17%
4% Fidelity real estate inv - ER 0.84 I would eliminate this.
2. Roth 403b: I do not qualify for roth IRA and my employers Roth 403b has a limited choice of funds. But I want to take advantage of tax free growth
15% Spartan extended market index - ER 0.07 This is fine. Keep it in mind when eliminating duplication in taxable.
3. Taxable accounts
15% vanguard 500 index fund - ER 0.17 Use Vanguard Total Stock Market instead. Increase to 25%.
4% vanguard small cap value - ER 0.35 Eliminate as this overlaps Roth 403b
4% ishare microcap ETF - ER 0.69 Eliminate for simplification.
10% vanguard pacific stock index - ER 0.26 Use Vanguard Total International instead.
10% vanguard europe stock index - ER 0.26 Use Vanguard Total International instead.
8% vanguard emerging market index - ER 0.33 Reduce this to about 5%-6% to complete equity allocation.
Streptococcus wrote:Livesoft, I have not implemented the portfolio yet, but I plan to do so starting april 1st. Is an equal allocation of equities efficient? Rick Ferri wrote somewhere in this forum that it was not, that it was better to have a core total stock index and add small value and microcap according to risk tolerance. That's what I'm trying to do. I would not bother with microcaps. Waste of time. You don't have to do everything Mr Ferri says, but you don't have to do anything I say either.
Occupier, can I replace vanguard 500 with vanguard total stock in my taxable if I already have spartan extended market in my roth? Wouldn't there be a midcap redundancy? I dont want to have a midcap overexposure because of their high correlation with large caps.You should have NO PROBLEM exchanging out of spartan extended market in your Roth. Since you said Spartan, that pretty much means your Roth is at Fidelity. You should have NO PROBLEM moving your Roth from Fidelity, too. (Full disclosure: I use Fidelity for my 401(k).) Or use something like IJS at Fidelity to get small-cap value.
Also, according to Ferri, it is better to have Europe and pacific indexes separated owing to the fact that the developed market funds tends to overweight on one side, reducing the exposure to the other. Does that occur with the total international index?That's the old Ferri. You need to get up to 2013.
How are Europe and Pacific stock indexes together less tax efficient than total international stock index?Euro and Pac are missing Canada, emerging markets, and small-caps. In the old days, total int'l did not have these. Nowadays, it does (and so do some other int'l funds). Basically, times have changed, so one has to stay abreast of current developments.
Streptococcus wrote:Twin fan,
Yes, I'm new to investing. I'm only a few years into my career and I have a 8 month emergency fund. I also have a couple of accounts that I can tap for short term urgencies. I've had a 15 year 285K mortgage for the past year, in which I have 37K equity right now.
My plan is to invest 50K a year for at least 20 years. in a nutshell, get a million to the market over a 20 year periods. I really appreciate the constant reminder that I need a simpler, workable plan, not the perfect one.
Streptococcus wrote:Livesoft said "You should have NO PROBLEM exchanging out of spartan extended market in your Roth. Since you said Spartan, that pretty much means your Roth is at Fidelity. You should have NO PROBLEM moving your Roth from Fidelity, too. (Full disclosure: I use Fidelity for my 401(k).) Or use something like IJS at Fidelity to get small-cap value"
What do you mean by exchanging out of spartan extended market? Or moving my roth from fidelity? According to my HR, I can only invest in a roth 403b through fidelity. And income wise, i do not qualify for roth IRA.
Streptococcus wrote:My big problem was the fact that my 403b and roth 403b only have 4 low cost indexes (spartan 500, extended market, spartan us bond and spartan international). And i know that a 403b is not the best location for extended market and international investing, but I considered having them in as a rebalancing tool. But that would go against simplicity.
I don't like the fact that UK, Japan, Australia, France, Canada, Germany and Switzerland account for 63% of this fund. I would not call that diversification, considering that most of these countries are in Europe. and the emerging market is marginalized.
Streptococcus wrote:24% Fidelity Spartan Total Market index - TAXABLE: I wanted to go with vanguard but I just can digest the fact that apple has 3.17% of that big fund. when apple sneezes, the whole fund gets the flu. Fidelity comes allotted a generous 2.51%, which is not much different from vanguard, but again, its ER is 0.10% versus 0.17% for Vanguard. many little wins make a big one.
Streptococcus wrote:24% Vanguard Total internations stock index -TAXABLE: I don't like the fact that UK, Japan, Australia, France, Canada, Germany and Switzerland account for 63% of this fund. I would not call that diversification, considering that most of these countries are in Europe. and the emerging market is marginalized. But I could not find a better fund. I even considered separating the international fund into 3 different funds, Europe, Pacific and emerging markets, but Vanguard Pacific fund, for instance is 85% Japan and Australia.
Streptococcus wrote:[Fidelity Total US Stock Market] ER is 0.10% versus 0.17% for Vanguard. many little wins make a big one.