Bogleheads

[Corcourt]

Hi,

I would appreciate any advice/suggestions you could offer.

Background: I currently have about 5 months of emergency expenses saved. Also, I have about 1,500 in credit card debt. My tax filing status is single and my tax rates: are 33% at the federal level and 6.85% at the state level.

I'm 26 and would like to have a fairly aggressive portfolio allocation. I'm thinking 80% stocks, 15% bonds, and 5% alternative investments (i.e. a sector specific ETF or maybe a REIT fund) (but I am not sure & could really use some advice).

My current portfolio is low five figures and 100% stocks.

My 401k is allocated as follows (the options w/o expense ratios and ticker symbols are privately managed portfolios that have no "expense ratios;" my employers pays them):
Vanguard 500 index fund (VFINX) (.18% expense ratio)
Brandes Investment Partners MS EAFE AC World X US
Turner Investment Partners Russell 2000
Alliance Bernstein Equity Russell 1000 Value

Other options for my 401k include:
American Funds Capital Income Builder (CAIBX) (0.64% expense ratio)
iShares Barclays Aggregate Bond Fund (AGG) (0.24%)
iShares Barclays 1-3 Year Credit Bond Fund (CSJ) (0.20%)
Dryfus Government Money Market (DMMXX) (0.16%)
Dryfus Liquid Assets Money Market (DLAXX) (0.56%)
CS McKee, L.P. Russell 1000 Value
TimesSquare Capital Management Russell Midcap Growth
Cramer Rosenthal McGlynn Russell Midcap Value
Thornbug Investment Management MSCI ACWI x US (net)
Macquarie Allegiance Capital Low Duration BC 1-3 Govt Bond

Taxable account:
Vanguard 500 index fund (VFINX)
Vanguard FTSE All-World ex-US fund (VFWIX)

My current portfolio is therefore:

69% Large cap growth/blend funds
29% International large cap funds
2% Small caps

I am really just now starting to understand the importance of asset allocation and would really like to bring my portfolio in line by adding some alternative investments, as well as getting rid of the overlap that currently exists in my portfolio.

I also plan to open a Roth IRA in Jan. However, I am not sure how to allocate between the taxable, the 401k and the IRA-- or which types of bond funds/ETFs I should look into.

Thanks!

[Taylor Larimore]

Hi Corcourt:

Welcome to the Bogleheads Forum!

You have made a good first post, but we need additional information and a revised portfolio format to give you knowledgeable suggestions.

Please use the link below as a guideline.

Asking Portfolio Questions

You can use the "edit" link in the upper right of your first post window to provide the missing information and revised portfolio format. Notice that your funds should TOTAL 100%.
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Best wishes
Taylor

The Majesty of Simplicity

[Corcourt]

Thank you for pointing that out. Hopefully my edit corrected my error!

[retiredjg]

Corcourt, welcome to the forum!

In the 33% tax bracket, I don't think you are eligible for a Roth IRA. However, you could contribute to a non-deductible IRA and convert to Roth starting next year when the income limits go away.

You could even start the non-deductible IRA this year and convert to Roth next year. However, if you do that, fund it at the end of December and convert to Roth in January so there will be little time for growth (with would trigger taxes).

You do have overlap. We also need the whole list available from your 401 - name, ticker and expense ratio. Occasionally, tickers are not available. In that case, we might need to know more about a certain fund, but you could wait on that - if the ER is high, we won't need to know anything.

Please go through the link Asking Portfolio Questions to be sure you have listed all the information needed.
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Links to Investment Planning and Asking Portfolio Questions

[Corcourt]

Thanks! I updated but still need to get some more of the info from my employer. And thanks for the IRA tip. So in January, I can't open a Roth, I can only transfer from a traditional IRA?

[retiredjg]