I am a 28 year old CPA (married to a 32 yo w/ 2 kids <2 yo), who got into a mess of hiring a friend as a financial advisor - an Ed Jones rep. He keeps giving me the building a foundation spiel, but I think many of the funds I am in are overlapping, and probably have a higher bond weighting than I would prefer at this point.
But, I have a 401k with Vanguard and I have been pleased with it, and last May I stopped Roth contributions to Ed Jones because I was fed up with load funds that seem to have lagged the market. The main thing that ticked me off was putting a 401k rollover (from Vanguard) in the Franklin Templeton Founding Fund Allocation, which promptly went from $4850 in March 07 to $2725 in Dec 08. I try to max Roth contributions each year, but for 2009 I am putting about $3500 to a VG deductible IRA instead of Roth IRA, and look into converting in 2010.
Wife has an account with Merrill Lynch, all C shares. Her family uses that rep, but the expense ratios kill me.
Updated below based upon all of your feedback. Look forward to more discussion now that I've got through newbie status.
Emergency funds = 0 from my income (what I prefer to do). Currently use wife's S-Corp dividend accumulation in taxable account as EFund (approx. $1k/mo) - about 4 months worth of net paychecks. Ideally we would never have to touch these funds, and would primarily be used for home down payment, education, etc. in the future
Debt: 190K mortgage - 4.875%
Credit cards paid in full every month (some months more damage than others), although currently have $3,200 in 0% BT used to cover expenses while on 1 month furlough from work
Tax Filing Status: MFJ, 2 children (2 and 5 mo)
Tax Rate: 15% Federal, TN Resident - no state tax, except Div & Int; When wife goes back to work in 3+ years, will be in 25% bracket - expect to be in higher brackets nears retirement due to growth of S-Corp investment, and additional shares expected to be inherited.
Age: 28, wife 32
Desired Asset allocation: (90 stocks/10 bonds)
Intl allocation: 20-25% of stocks
Breakdown by Category/Sector/Growth vs. value is not extremely important at this time. I just want to be diversified. Have considered REIT's, Commodity, other sector investing in the past, but that is just chasing returns. I like to invest in areas that provide dividends/other income returns - I was looking at one of the Oil/gas partnership ETF's, but those would be covered in an index.
Total Current Portfolio - approx $80K
Merrill Lynch Taxable - Wife's S-Corp Dividend Accumulation Account ($1K/mo dividends, use $417 to move into Roth monthly)
2% BR National Muni (MFNLX) 1.64% exp
2% BR Basic Value (MCBAX) 1.72% exp
2% BR Large Cap Core (MCLRX) 2.09% exp
1% BR Fundamental Grwth (MCFGX) 2.1% exp
1% BR Global Small Cap (MCGCX) 2.44% exp
1% BR Global Allocation (MCLOX)1.94% exp
1% BR High Income (MFHIX) 2.24% exp
1% BR Int'l Value (MCIVX) 2.88% exp
Wife's Roth ML - Broker mysteriously moved into the 3 loser accounts in mid-2007, and subsequently lost about 50% of their value.
33% Cash (on its way to VG! & going to cash at first)
His Rollover IRA at VG
4% VG Int'l Value (VTRIX) 0.47% exp
4% VG Div Growth (VDIGX) 0.32% exp
His Roth at Edward Jones
His Roth at VG
24% Cash - need to allocate
His 401k at VG
3% Lord Abbet Small Cap (LSBYX) 1.05% exp
3% TRP Growth (PRGFX) 0.73% exp
3% VG Int'l Growth (VWGIX) 0.53% exp
3% VG MidCap Index (VIMSX) 0.27% exp
3% VG Windsor II (VWNIX) 0.39% exp
Company match 50% of first 5 %, 3 year cliff vesting (approx. 2% of total portolio is unvested and expected to be lost - looking at new job to increase salary and reduce travel)
New annual Contributions
9% (approx. $6,300) his 401k (5.5% 401k, 3.5% Roth 401k)
$5K to Roth or Deductible IRA for both
Funds available in his 401(k)
VG Total Bond Index (VBMFX) 0.22% exp
Western Asset Core Bond (WAPIX) 0.83% exp
VG Target 2050 (VFIFX) 0.19% exp
VG 500 Index Fund (VFINX) 0.18% exp
VG Total Stk Mkt (VTSMX) 0.18% exp
1) It still looks like I have a ton of funds in my portfolio - Target date would simplify - this would mirror the market, but I am trying to figure out how my 401k portfolio beat target date by 15% last year. Again, trying to get into international cheaply w/o paying the purchase fees are best done in TR accounts.
2) I don't know why, I had some doubts after all my funds were liquidated from EJ about losing out on returns - the AF Capital World G/I report came out and showed that they were at $59K for $10K investment in 1993 vs. the MCRI (or whatever it is) index only had like $40K - I just can't think that American funds can really outperform over extended periods of time. But I'm just looking to get consistent solid returns over time, and if the market does that (which it should), I just need to be allocated appropriately.
Last edited by bondebj26
on Thu Feb 11, 2010 9:44 am, edited 4 times in total.