How am I doing at 31 in terms of AA?

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How am I doing at 31 in terms of AA?

Postby azurik » Wed May 22, 2013 1:08 pm

Hi Guys,

Been reading Bogleheads for years, but decided to join today to discuss my current retirement progress. I would describe myself as tolerant to a high degree of risk. Lately, I have been shifting a bit into bonds... it's now more towards 20% vs 10%. When the markets becomes exuberant, I tend to switch a few percentage points into bonds and then rotate them back into equities during doom and gloom times (ex. 2008 financial crisis). This doesn't have a significant impact on my portfolio, but it helps me "play" with the market with a small exposure of my total holdings.

Wondering if you guys have any advice for me given my portfolio below. Regarding bonds, I do have most of my bonds managed under PTTRX. Bill Gross has a higher expense ratio and takes a bit more risk, but this is something I am okay with given it's bigger upside potential:

Emergency funds: Yes, a couple years.
Debt: no debt other than Mortgage @ 4.625
Tax Filing Status: Single
Tax Rate: 9% Federal (effective tax rate from 2012), 0% State
State of Residence: NH
Age: 31
Desired Asset allocation: 80% stocks / 20% bonds
Desired International allocation: 20% of stocks

Current Retirement Assets

401k @ Fidelity (current employer)
6% of total retirement portfolio
55% Dodge & Cox Stock Fund (DODGX)
15% Fidelity® Diversified International Fund - Class K (FDIKX)
15% BlackRock High Yield Bond Portfolio BlackRock Shares (BRHYX)
10% Spartan® Small Cap Index Fund - Fidelity Advantage Class (FSSVX)
5% Spartan® Global ex U.S. Index Fund - Fidelity Advantage Class (FSGDX)

401k @ Fidelity (old employer)
80% of total retirement portfolio
55% Vanguard Institutional Total Stock Market Index Fund Institutional Plus Shares (VITPX)
16% PIMCO Total Return Fund Institutional Class (PTTRX)
15% Northern Trust Collective All Country World Index
5% Northern Trust Collective Russell 2000 Index Fund
5% Oppenheimer Developing Markets Fund Class I (ODVIX)
4% Spartan® Intermediate Treasury Bond Index Fund - Fidelity Advantage Class (FIBAX)

Roth IRA @ Fidelity
14% of total retirement portfolio
(individually equities)

Contributions

New Annual Contributions
$15k to current 401k (4% matching dollar for dollar)
$5k his Roth IRA

Available funds

Funds available in current 401(k)
AF GRTH FUND AMER R6 (RGAGX)
CALAMOS GROWTH INST (CGRIX)
DAVIS NY VENTURE Y (DNVYX)
DODGE & COX STOCK (DODGX)
SPTN 500 INDEX INST (FXSIX)
SPTN MID CAP IDX ADV (FSCKX)
VICTORY SPL VALUE I (VSPIX)
SPTN SM CAP IDX ADV (FSSVX)
TRP SM CAP STOCK (OTCFX)
FID DIVERSIFD INTL K (FDIKX)
SPTN GLB XUS IDX ADV (FSGDX)
FID BALANCED K (FBAKX)
FID FREEDOM K 2040 (FFKFX)
FID FREEDOM K 2045 (FFKGX)
FID FREEDOM K 2050 (FFKHX)
MIP II CL 3
BLKRK HIGH YLD BD BR (BRHYX)
DODGE & COX INCOME (DODIX)
FID GNMA (FGMNX)
VANG INFL PROT ADM (VAIPX)

Funds available in previous 401(k)
NT S&P 500 INDEX
VANG IS TL STK MK IP (VITPX)
TRP INST SM CAP STK (TRSSX)
NT RUSSELL 2000 INDX
HARRIS OAKMRK GLOBAL
NT ACWI EX-US IDX DC
OPP DEVELOPING MKT I (ODVIX)
JANUS BALANCED N (JABNX)
SPTN INT TR IDX ADV (FIBAX)
NT AGGREG BOND INDEX
PIM TOTAL RT INST (PTTRX)
FIXED INCOME FUND
FIMM MONEY MKT INST (FNSXX)
Last edited by azurik on Wed May 22, 2013 9:11 pm, edited 2 times in total.
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Re: How am I doing at 31?

Postby azurik » Wed May 22, 2013 6:27 pm

I noticed I forgot to include the expense ratio... I'll try to update it when I have a moment, but most of these funds have ultra low fees, there's a few that hover in the .80% range.
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Re: How am I doing at 31?

Postby letsgobobby » Wed May 22, 2013 6:49 pm

Are you the same azurik from FWF a few years back?
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Re: How am I doing at 31?

Postby ruralavalon » Wed May 22, 2013 6:56 pm

Welcome to the forum :) .

Why two lists of "Funds available in current 401(k)"?

What is your marginal tax rate?
Please see this to fugure that out -- http://www.moneychimp.com/features/tax_brackets.htm .
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Re: How am I doing at 31?

Postby azurik » Wed May 22, 2013 7:23 pm

letsgobobby wrote:Are you the same azurik from FWF a few years back?


I am the same Azurik - I get stalked everywhere ;)
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Re: How am I doing at 31?

Postby azurik » Wed May 22, 2013 7:25 pm

ruralavalon wrote:Welcome to the forum :) .


Thanks!

ruralavalon wrote:Why two lists of "Funds available in current 401(k)"?]


Fixed.

ruralavalon wrote:What is your marginal tax rate?
Please see this to fugure that out -- http://www.moneychimp.com/features/tax_brackets.htm .


28%
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Re: How am I doing at 31?

Postby Grt2bOutdoors » Wed May 22, 2013 8:13 pm

azurik wrote:I noticed I forgot to include the expense ratio... I'll try to update it when I have a moment, but most of these funds have ultra low fees, there's a few that hover in the .80% range.


Welcome to the forum!

What is the ballpark size of portfolio? Then we can tell you how well you are doing.
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Re: How am I doing at 31?

Postby sometimesinvestor » Wed May 22, 2013 8:53 pm

The subject question(how am I doing ) is NOT the question you asked in your post but here is fidelity's answer to the subject question:

https://www.fidelity.com/viewpoints/per ... nt-savings
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Re: How am I doing at 31?

Postby letsgobobby » Wed May 22, 2013 9:10 pm

azurik wrote:
letsgobobby wrote:Are you the same azurik from FWF a few years back?


I am the same Azurik - I get stalked everywhere ;)


welcome to Bogleheads.

The reason I asked is because I remember from the legendary "volitality" thread at FWF that you were pretty bullish heading into 2007-08. Then when the system collapsed I didn't see a lot of posts from you - maybe none. I'm not trying to stalk - the only reason it matters to me is as it relates to risk tolerance. The question is whether you maintained your bullishness through the 07-09 crisis and continued to buy into stocks and even rebalance into them throughout the declines. If so then an 80-90% stock allocation now may still be appropriate for you. If not - for example, if you were bullish in 07, then stopped buying stocks in 08-09-10, and now in 13 are more bullish again - then I would suggest you take a step back and reassess where your risk tolerance truly lies. My recollection of your posts is that even then you were pretty well sold on Bogleheadism, so that seems to bode well for your ability to stay the course.
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Re: How am I doing at 31?

Postby azurik » Wed May 22, 2013 9:11 pm

I meant to ask if there was any advice in rebalancing. Do my ratios and percentages look okay to a Boglehead?
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Re: How am I doing at 31?

Postby azurik » Wed May 22, 2013 9:16 pm

letsgobobby wrote:
azurik wrote:
letsgobobby wrote:Are you the same azurik from FWF a few years back?


I am the same Azurik - I get stalked everywhere ;)


welcome to Bogleheads.

The reason I asked is because I remember from the legendary "volitality" thread at FWF that you were pretty bullish heading into 2007-08. Then when the system collapsed I didn't see a lot of posts from you - maybe none. I'm not trying to stalk - the only reason it matters to me is as it relates to risk tolerance. The question is whether you maintained your bullishness through the 07-09 crisis and continued to buy into stocks and even rebalance into them throughout the declines. If so then an 80-90% stock allocation now may still be appropriate for you. If not - for example, if you were bullish in 07, then stopped buying stocks in 08-09-10, and now in 13 are more bullish again - then I would suggest you take a step back and reassess where your risk tolerance truly lies. My recollection of your posts is that even then you were pretty well sold on Bogleheadism, so that seems to bode well for your ability to stay the course.


You have a good memory :)

I maintained my exposure to stocks throughout the financial crisis. The only thing I did before late 2008 was increased my holdings of Pimco Bonds (PTTRX) to 30%-35% of my portfolio. That helped buffer some of the big losses, while still contributing every other week through my employer and through my own ROTH IRA. My individual investments in RMBS and DNDN towards the end of '08 through '09 more than recovered any losses. I got lucky, as I was bullish, but when I see stocks go up higher and higher with more enthusiasm, I slowly trickle some additional funds into bonds (what I explained in my original post).
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Re: How am I doing at 31 in terms of AA?

Postby letsgobobby » Wed May 22, 2013 11:13 pm

Dropping down to 30-35% bonds from 20% is a near doubling of bond exposure, at the bottom of the equity market. So that's not great. Would 70/30 be too terrible for you? That's still the old 'age in bonds'... not that it would have a meaningful impact on returns, but it might have a meaningful impact on your ability to stay the course.

Regarding your portfolio, the Boglehead philosophy does not endorse owning individual stocks. You have 14% in your Roth IRA in individual stocks. As long as no single position is greater than 2-3% or maybe 5% tops, it's not the end of the world. But it is an unnecessary sin. Also, by holding individual stocks in your IRA, you lose the ability to tax loss harvest them, which is one of the (few) advantages of individual stocks. You don't have a taxable account now, so it's kind of a moot point - maybe something to file away for later.

I'm an advocate of not replicating your entire portfolio within each account. Find the best 1 or 2 or 3 funds and build from there. It's simpler, but just a matter of taste.

Does the Northern Trust all World include the US?

You have 5 international funds: Fido Diversified International; Spartan Global ex-US; Northern Trust All Country World; Oppenheimer Developing Markets; Fido Spartan Small Cap Index. Is that necessary?

How much of a small/value tilt do you want? Do you want the actively managed stuff like DODGX? Or do you want as much indexing as possible?
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Re: How am I doing at 31 in terms of AA?

Postby ruralavalon » Thu May 23, 2013 2:46 pm

You still need to add the expense ratios for the funds as offered in the 401ks.

This should be added to your original post using the "edit" button, sothat all of your information is in one place.
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