Portfolio Overhaul Advice Please

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
kristin735
Posts: 13
Joined: Wed Jun 09, 2021 3:59 pm

Portfolio Overhaul Advice Please

Post by kristin735 »

Previous investing strategy was to go with the advice of our then advisor. The advice to move half my Simple to a deferred index annuity had us researching if that was the best move. Decided against it and during the research found out 1.5 years’ worth of brokerage deposits were never invested. Shame on us for not noticing. Think I’d like to go forward with a simplified 3-6 index fund strategy but would like some advice. FYI the fact that our 2 kids will enter college in 3 and 5 years is complicating the thought process for me. Projections show we will need to access funds for college from our brokerage for the youngest’s last two years (7 years from now)


Emergency funds:3 months in checking

Debt: Mortgage 49K with payoff date Feb 2024(3.75%), Home Equity 6K with payoff date June 2022(3.5%), we usually keep 2 newish cars (0.9%)

Tax Filing Status: MFJ

Tax Rate: 24% Federal, 7.6% State

Age: Him 48, Her 46. Hoping to retire at 60/58

Desired Asset allocation: 80% stocks / 20% bonds
Desired International allocation: unsure

Total portfolio value is 1M

Taxable
2.5% cash
0.8% Catalyst/Milburn Hedge Strategy A (MBXAX) (ER 2.27)

I am in the process of transferring this account to Vanguard after leaving previous FA. Plan on selling MF and starting over

His 403b
11.6% MFS Growth A (MFEGX) (ER 0.87)
10.7% Dodge and Cox Stock (DODGX) (ER 0.52)
10.5% Vanguard Midcap Index (VIMAX) (ER 0.05)
10.7% Vanguard Smallcap Index (VSMAX) (ER 0.05)
10.4% American Europacific growth A (RERHX) (ER 0.62)
4% Employer match


His Roth IRA at Vanguard
0% Likely will start backdoor Roth this year

Her Simple IRA at American Funds
42.8% All class A shares (average ER 0.75)
3% Employer match

I have started a frozen Simple at Vanguard and will be setting up monthly transfers from AF to Vanguard account

Contributions

New annual Contributions
$19500 his 403b (plus 4% match)
$13500 her Simple (plus 3% match)
$6000 his Roth IRA
$20000 taxable This will bump up as home loans are paid off

Available funds

Lower ER Funds available in his 403b
Vanguard 500 Index (VFIAX) (ER 0.04)
Vanguard FTSE Social Index (VFTAX) (ER 0.14)
TIAA Cref International Index (TCIEX) (ER 0.05)
Income Fund of America (RIDGX) (ER 0.26

Funds available in her Simple
Most Vanguard MF

Questions:
1. I feel we need to increase our EF. Do you think 6mo or 1 year is a better choice in our situation?

2. I feel we need to keep safer options in our liquid (brokerage) account but that is counter to the usual recommendation to put Bonds in your tax deferred accounts. Not sure which fund would be the best for this situation. Or would you recommend a different solution? (Just came up with the possibility that we could just redirect our contributions to a MM account a year or two before we need it for college funding)

3. I’m somewhat interested in some tilt towards small caps and value as well as real estate and emerging markets. Do you think it is worthwhile adding a small portion of these areas for diversification purposes or does it just overcomplicate the portfolio?

4. Any recommendations on which funds to hold in which account are appreciated

Thank you all in advance for your input.
User avatar
David Jay
Posts: 11336
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: Portfolio Overhaul Advice Please

Post by David Jay »

Welcome to the Forum! We are mostly DYI index investors so you have come to the right place.
kristin735 wrote: Sat Jun 19, 2021 4:32 pm 3. I’m somewhat interested in some tilt towards small caps and value as well as real estate and emerging markets. Do you think it is worthwhile adding a small portion of these areas for diversification purposes or does it just overcomplicate the portfolio.
I’ll comment on #3 and let others comment on other items.

First, any allocation 5% or less is just not large enough to make a difference, so use that as a metric. If you want, say, 10% of your portfolio in each: small caps and value and real estate and emerging markets, that doesn’t leave much for your “core” allocation. I believe you need to think through just how convinced you are that these 4 sectors will outperform the broader market.

A “tilt” needs to be held when the sector in underperforming which is hard to do. It is tough to hold when a sector is doing worse your core holdings. I put it this way, as a way to evaluate how serious you are about the tilts you listed: “You need be able to convince yourself to stay the course through a decade or more of underperformance.” If you don’t have that level of belief, forego that particular sector.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius
chassis
Posts: 477
Joined: Tue Mar 24, 2020 4:28 pm

Re: Portfolio Overhaul Advice Please

Post by chassis »

1. I like 1 year or more in emergency funds.

2. Yes, I have "safer" (relative term) investments in taxable. I am very heavy in equities and hold zero bonds. So safe to me may mean something else to another person.

3. Value and growth can be found in the same stock. One example is MSFT. I don't like real estate. I don't know it. Do you know real estate? Buy what you know.

4. Hold US equity growth funds with managers with long tenure and good track records. They are out there.
User avatar
David Jay
Posts: 11336
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: Portfolio Overhaul Advice Please

Post by David Jay »

With regard to #4, most here would consider the core funds to be Total US Stock, Total US Bond and Total International Stock. Most fund families (Vanguard, Fidelity, Schwab, iShares ETFs) offer all 3. This provides a complete, diversified portfolio. Adding specific funds for additional factor or sector coverage actually creates concentration. Most folks who tilt seem to focus on a particular strategy (sector or factor) or two which they believe could outperform the market.

Over the years I have become convinced that it is extremely difficult to consistently outperform the market. I have held large value, small cap value, emerging market and REIT funds at various stages of my investing career, I no longer hold any of those tilts.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius
User avatar
MedicatedMoney
Posts: 148
Joined: Mon May 28, 2007 11:22 am
Location: Philadelphia

Re: Portfolio Overhaul Advice Please

Post by MedicatedMoney »

We are similar ages with a slightly higher amount in our portfolio and 2 extra children that are 6 years from college. Here is our thoughts to your questions:

1. I personally like to have 6 months of case on hand for our EF. I have other options available (taxable, HELOC, high CC limit, etc if we needed it for an emergency that was longer than 6 months). But we are still young and in our accumulation phase (like you are) and have stable jobs.

2. All money in our taxable account is in VTSAX due to tax efficiency. We are 70/30 and thus hold bonds in our 403(b).

3 & 4. Agree with David Jay and our core is the big 3 - Total US stock, total US Bond, & total International Stock. We do hold some in TIAA traditional (similar to a bond) and TIAA Real Estate (available from our work). I think most investors would be wise with just holding the main 3 and not get too fancy with it.

5. What are you plans for college? 529s? If I was in your shoes, I would make sure I max out all retirement accounts, ROTHs for both, and then I would try to knock out the mortgage by the time your 1st goes to college, and then plan to cash-flow college. Just an idea
-Medicated
Topic Author
kristin735
Posts: 13
Joined: Wed Jun 09, 2021 3:59 pm

Re: Portfolio Overhaul Advice Please

Post by kristin735 »

David Jay wrote: Sat Jun 19, 2021 8:34 pm First, any allocation 5% or less is just not large enough to make a difference, so use that as a metric. If you want, say, 10% of your portfolio in each: small caps and value and real estate and emerging markets, that doesn’t leave much for your “core” allocation. I believe you need to think through just how convinced you are that these 4 sectors will outperform the broader market.
I am a complete novice so I did some playing around with Portfolio Visualizer to better inform the decision about how those sectors fare in comparison to the broader market. This is what I compared:
64% VG Total Stock Market
16% VG Total International
20% VG Total Bond
vs
34% VG Total Stock Market
16% VG Total International
20% VG Total Bond
10% VG Emerging Markets
10% VG Real Estate Index
10% VG Smallcap Value
vs
Each of the 6 funds on their own at 100%

The software let me go back as far as 1998. So I looked at the whole timeline, 1999-2010, and the last 10 years. Things I noticed:
- For all 3 timelines the 6 fund portfolio performed better (though with higher Stdev)
- International portion increased the volatility
- Emerging Markets portion was helpful in 1999-2010, but harmful in last 10 years
- Real Estate portion was helpful in 1999-2010, but provided no extra value in last 10 years
- Small Cap portion was a little helpful in 1999-2010, and more helpful in last 10 years

The small cap/value tilt I am most convinced will be beneficial based on previous readings. I've only heard about emerging markets and real estate as being helpful for diversification but have no opinion myself. Likely that in itself should make me skip them in our portfolio.

I believe I am able to stay the course. It's just a matter of picking the allocations I'm going to stick to.
Topic Author
kristin735
Posts: 13
Joined: Wed Jun 09, 2021 3:59 pm

Re: Portfolio Overhaul Advice Please

Post by kristin735 »

chassis wrote: Sat Jun 19, 2021 9:07 pm I don't like real estate. I don't know it. Do you know real estate?
I don't know it either. A good case against it.
chassis wrote: Sat Jun 19, 2021 9:07 pm Hold US equity growth funds with managers with long tenure and good track records. They are out there.
Any recommendations?
Topic Author
kristin735
Posts: 13
Joined: Wed Jun 09, 2021 3:59 pm

Re: Portfolio Overhaul Advice Please

Post by kristin735 »

David Jay wrote: Sun Jun 20, 2021 8:21 am I have held large value, small cap value, emerging market and REIT funds at various stages of my investing career, I no longer hold any of those tilts.
Good to know simplification can be a good choice. Do you think it matters whether a person is in their accumulation or decumulation phase?
User avatar
celia
Posts: 12970
Joined: Sun Mar 09, 2008 6:32 am
Location: SoCal

Re: Portfolio Overhaul Advice Please

Post by celia »

You can get small cap and value funds that are INDEX funds. Index funds are preferred in Taxable accounts since they are more tax-efficient than managed funds.

With a SIMPLE IRA, you won’t be able to do the Backdoor Roth without the pro rata rule applying.

You also need to watch out for getting too many capital gains in Taxable as they will be taxed, although at a better rate than wages.
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.
retiredjg
Posts: 44826
Joined: Thu Jan 10, 2008 12:56 pm

Re: Portfolio Overhaul Advice Please

Post by retiredjg »

Welcome to the forum. :happy

You are already in very good shape. Not much to fix here.

1. I feel we need to increase our EF. Do you think 6mo or 1 year is a better choice in our situation?
With two incomes, 6 months is probably good enough unless you have reason to believe it is likely to lose both incomes at the same time (for example - same industry). However, this is an emotional decision as well as a numbers decision. Suggest you increase to 6 months and see how you feel. If that is not enough, continue adding months till you are comfortable.

2. I feel we need to keep safer options in our liquid (brokerage) account but that is counter to the usual recommendation to put Bonds in your tax deferred accounts. Not sure which fund would be the best for this situation. Or would you recommend a different solution? (Just came up with the possibility that we could just redirect our contributions to a MM account a year or two before we need it for college funding)
I would stick to the usual suggestions for taxable - broad stock index funds. If you need to sell, even when the market is down, sell in taxable and then exchange bonds to stocks in one of the tax-advantaged accounts. This is the same as selling bonds. This only works well if the taxable account is large enough to suffer some loss (downturn) and still be large enough to accomplish your goal.

Directing contributions for two years to MM for college is a good idea as well.

3. I’m somewhat interested in some tilt towards small caps and value as well as real estate and emerging markets. Do you think it is worthwhile adding a small portion of these areas for diversification purposes or does it just overcomplicate the portfolio?
I would not do this with "somewhat interest". These tilts may take decades to pay off and they may not pay off at all. You should really believe there is going to be a benefit to go in this direction.

If you really want to do this, put an extra 5% into small cap value and 5% into a REIT fund (which may actually be underweighted in the total stock market) and call it good. Those 5% slices are not going to help a lot but they don't risk a lot either.

Huge kudos to you for already figuring out the backdoor can only be used for one of you and for figuring out the frozen IRA solution on the SIMPLE. :happy


Here's an unfinished idea.

Taxable 3.3%
3.3% Total International Index


His 403b 53.9%
Vanguard 500 Index (VFIAX) (ER 0.04)
Vanguard Midcap Index (VIMAX) (ER 0.05)
Vanguard Smallcap Index (VSMAX) (ER 0.05)
TIAA Cref International Index (TCIEX) (ER 0.05)

? is there no bond fund or stable value (guaranteed income) fund available in this account?



His Roth IRA at Vanguard
0% Small cap value? REIT?

Her Frozen Simple IRA Vanguard 42.8%
42.8% Will you have to pay an annual fee for each fund in this account?


Contributions

New annual Contributions
$19500 his 403b (plus 4% match)
$13500 her Simple (plus 3% match)
$6000 his Roth IRA
$20000 taxable This will bump up as home loans are paid off
Topic Author
kristin735
Posts: 13
Joined: Wed Jun 09, 2021 3:59 pm

Re: Portfolio Overhaul Advice Please

Post by kristin735 »

MedicatedMoney wrote: Sun Jun 20, 2021 8:45 am I personally like to have 6 months of case on hand for our EF. I have other options available (taxable, HELOC, high CC limit, etc if we needed it for an emergency that was longer than 6 months). But we are still young and in our accumulation phase (like you are) and have stable jobs.
Good point about the HELOC etc though who knows what interest rates will be when we need it. We are both in the same job at different companies. It is a highly stressful position. In the unlikely event that one of us gets fed up and leaves we may have a hard time finding a replacement job. That is another reason to have less volatile funds in our taxable account.
MedicatedMoney wrote: Sun Jun 20, 2021 8:45 am What are you plans for college? 529s? If I was in your shoes, I would make sure I max out all retirement accounts, ROTHs for both, and then I would try to knock out the mortgage by the time your 1st goes to college, and then plan to cash-flow college.
We have 529 plans for both kids and predict we will be ~120k short total if kids go to in-state school (predicting 45k per year). And I'm not seeing that our kids are driven enough to qualify for merit scholarships. I know most parents that are able to would foot the whole bill but we want them to have some "skin in the game" so will expect them cover anything beyond that.

Retirements are maxed, starting backdoor roth this year for my husband (my Simple makes it more complicated than I want to deal with), mortgage will be paid off 6 months before college starts.
Topic Author
kristin735
Posts: 13
Joined: Wed Jun 09, 2021 3:59 pm

Re: Portfolio Overhaul Advice Please

Post by kristin735 »

retiredjg wrote: Sun Jun 20, 2021 9:16 am If you need to sell, even when the market is down, sell in taxable and then exchange bonds to stocks in one of the tax-advantaged accounts. This is the same as selling bonds.
OMG What a lightbulb moment you have given me.
retiredjg wrote: Sun Jun 20, 2021 9:16 am Huge kudos to you for already figuring out the backdoor can only be used for one of you and for figuring out the frozen IRA solution on the SIMPLE.
Thank you. I've been trying to figure out all the nuances on my own but at some point it just makes sense to ask for help.
retiredjg wrote: Sun Jun 20, 2021 9:16 am ? is there no bond fund or stable value (guaranteed income) fund available in this account?
Only 2 fixed income funds. Hadn't listed them before because I didn't think they were good choices
Dodge and Cox Income (DODIX) (ER 0.42)
PIMPCO Real Return (PRRIX) (ER 0.53) this is inflation protected
retiredjg wrote: Sun Jun 20, 2021 9:16 am Her Frozen Simple IRA Vanguard 42.8%
42.8% Will you have to pay an annual fee for each fund in this account?
No, the Vanguard rep confirmed this.
User avatar
ruralavalon
Posts: 21678
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Portfolio Overhaul Advice Please

Post by ruralavalon »

kristin735 wrote: Sat Jun 19, 2021 4:32 pm Emergency funds:3 months in checking
. . . . .
Questions:
1. I feel we need to increase our EF. Do you think 6mo or 1 year is a better choice in our situation?
You my opinion 3 months in checking is reasonable for an emergency fund, if your employment is reasonably secure.


kristin735 wrote: Sat Jun 19, 2021 4:32 pm Age: Him 48, Her 46. Hoping to retire at 60/58

Desired Asset allocation: 80% stocks / 20% bonds
Desired International allocation: unsure
I suggest around 20-30% of stocks in international stocks. Vanguard paper (March 2012), "Considerations for investing in non-U.S. equities", available as an archived pdf. Historically, allocating 20% of an equity portfolio to non-U.S. stocks would have captured about 84% of the maximum possible diversification benefit, and allocating 30% of an equity portfolio to non-U.S. stocks would have captured about 99% of the maximum possible diversification benefit (p. 6). The diversification benefit has varied over time. (You can find lots of debate here on international allocation, opinions ranging all the way from 00% to 50% of stocks in international stocks. If you want more viewpoints on international stocks please try the Google search box, upper right, this page).

That works out to about 20% bonds, 20% international stocks, and 60% domestic stocks. Asset allocation is a very personal decision. You must decide on an allocation that is comfortable for you based on your own ability, willingness and need to take risk.


kristin735 wrote: Sat Jun 19, 2021 4:32 pm Taxable
2.5% cash
0.8% Catalyst/Milburn Hedge Strategy A (MBXAX) (ER 2.27)

I am in the process of transferring this account to Vanguard after leaving previous FA. Plan on selling MF and starting over
In a taxable brokerage account use very tax-efficient stock index funds. Wiki article "Tax-efficient Fund Placement", link.

Examples would be Vanguard Total Stock Market Index Fund (VTSAX) ER 0.04% or Vanguard Total International Stock Index Fund (VTIAX) ER 0.11%.

kristin735 wrote: Sat Jun 19, 2021 4:32 pmHis 403b
11.6% MFS Growth A (MFEGX) (ER 0.87)
10.7% Dodge and Cox Stock (DODGX) (ER 0.52)
10.5% Vanguard Midcap Index (VIMAX) (ER 0.05)
10.7% Vanguard Smallcap Index (VSMAX) (ER 0.05)
10.4% American Europacific growth A (RERHX) (ER 0.62)
4% Employer match
In his 403b I suggest these funds instead:
1) Vanguard 500 Index Fund (over 80% of U.S. stock market) (VFIAX) (ER 0.04);
2) TIAA Cref International Index Fund (uses the MSCI EAFE Index, developed markets only) (TCIEX) (ER 0.05); and
3) Dodge and Cox Income Fund (intermediate-term investment-grade bonds) (DODIX) (ER 0.42).

Although actively managed Dodge and Cox Income Fund (DODIX) (ER 0.42) is a good, well diversified, intermediate-term (effective duration = 5.40 years), investment-grade (credit quality = A) bond fund with a fairly low expense ratio. It's performance has compared well to a total bond Market Index fund. Portfolio Visualizer, 1989-2021.

If you really want a value tilt then Dodge and Cox Stock Fund (DODGX) (ER 0.52) is a good choice instead of the S&P 500 index fund.

Dodge & Cox is an excellent fund company, 1 of just 5 top rated companies according to Morningstar (1/28/2020) "The Best Fund Companies and Their Ratings". Also see: Morningstar (9/6/019), "Be Thankful That You Don't Compete Against Vanguard ",link. "After reading this column, Morningstar’s Russ Kinnel informed me that Jack Bogle told him that Dodge & Cox was his favorite fund family. 'My God, they’re boring,' said Bogle. You can’t ask for a higher fund-family compliment than that."

I don't suggest adding small allocations to small-cap, emerging markets or real estate.

In my opinion in a plan that lacks a total stock market index fund, a S&P 500 index fund is good enough by itself for a domestic stock allocation. A S&P 500 index fund covers over 80% of the U.S. stock market investing in stocks of selected large-cap and mid-cap U.S. companies. In the 29 years since the creation of the first total stock market index fund the performance of the two types of funds has been almost identical. Portfolio Visualizer, 1993-2021. So it seems that adding a little in mid/small cap stocks trying to mimic the holdings of a total stock market fund has historically made little difference in performance.

See also:
1) Allan Roth, CBS Moneywatch (02/03/2010), "John C. Bogle on the S&P 500 vs. the Total Stock Market", link; and
2) Wall Street Physician (01/17/2019), "Should You Invest in the S&P 500 or the Total Stock Market?"link.



kristin735 wrote: Sat Jun 19, 2021 4:32 pmHis Roth IRA at Vanguard
0% Likely will start backdoor Roth this year
In a Roth IRA use stock funds rather than bond funds.

Choices could be Vanguard Total Stock Market Index Fund (VTSAX) ER 0.04% or Vanguard Total International Stock Index Fund (VTIAX) ER 0.11%.



kristin735 wrote: Sat Jun 19, 2021 4:32 pmHer Simple IRA at American Funds
42.8% All class A shares (average ER 0.75)
3% Employer match

I have started a frozen Simple at Vanguard and will be setting up monthly transfers from AF to Vanguard account
Good choice for the location of a SIMPLE IRA.

I suggest these funds for her account at Vanguard:
1) Vanguard Total Stock Market Index Fund (VTSAX) ER 0.04%;
2) Vanguard Total International Stock Index Fund (VTIAX) ER 0.11%;and
3) Vanguard Total Bond Market Index Fund (VBTLX) ER 0.05%.



kristin735 wrote: Sat Jun 19, 2021 4:32 pmNew annual Contributions
$19500 his 403b (plus 4% match)
$13500 her Simple (plus 3% match)
$6000 his Roth IRA
$20000 taxable This will bump up as home loans are paid off
. . . . .
2. I feel we need to keep safer options in our liquid (brokerage) account but that is counter to the usual recommendation to put Bonds in your tax deferred accounts. Not sure which fund would be the best for this situation. Or would you recommend a different solution? (Just came up with the possibility that we could just redirect our contributions to a MM account a year or two before we need it for college funding)
In my opinion opinion it's better if you redirect some of the $20k annual taxable contributions to college savings when it comes time to fund college expenses
Last edited by ruralavalon on Sun Jun 20, 2021 11:22 am, edited 3 times in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
retiredjg
Posts: 44826
Joined: Thu Jan 10, 2008 12:56 pm

Re: Portfolio Overhaul Advice Please

Post by retiredjg »

A finished idea. There are lots of other ways to arrange this too.

Taxable 3.3%
1.3% Total Stock Index
2% Total International Index


His 403b 53.9%
21.9% Vanguard 500 Index (VFIAX) (ER 0.04)
22% TIAA Cref International Index (TCIEX) (ER 0.05)
10% Dodge and Cox Income

His Roth IRA at Vanguard
0% REIT Index

Her Frozen SIMPLE IRA Vanguard 42.8%
16% 500 index
16.8% Extended Market Index ("completes" the 500 index in His 403b and Her SIMPLE IRA)
10% Total Bond Market


This works out to 80% stock and 20% bond with 30% of the stock (24% of the portfolio) in international. It is low cost and tax-efficient.

What you would do is set your portfolio to the above and then add money in the same 56:24:20 ratio each year. Once a year, rebalance. For taxable, just keep an eye on the whole portfolio ratio of US to foreign and add money to the fund you don't have enough of. This avoids having to rebalance in taxable.

If things do get out of whack in taxable, you can rebalance the US to foreign stock ratio in His 403b.

If you use the REIT index, it is part of the US stocks.
retiredjg
Posts: 44826
Joined: Thu Jan 10, 2008 12:56 pm

Re: Portfolio Overhaul Advice Please

Post by retiredjg »

kristin735 wrote: Sun Jun 20, 2021 9:51 am
retiredjg wrote: Sun Jun 20, 2021 9:16 am If you need to sell, even when the market is down, sell in taxable and then exchange bonds to stocks in one of the tax-advantaged accounts. This is the same as selling bonds.
OMG What a lightbulb moment you have given me.
Here is the full version.

https://www.bogleheads.org/wiki/Placing ... ed_account
Topic Author
kristin735
Posts: 13
Joined: Wed Jun 09, 2021 3:59 pm

Re: Portfolio Overhaul Advice Please

Post by kristin735 »

retiredjg wrote: Sun Jun 20, 2021 11:16 am Her Frozen SIMPLE IRA Vanguard 42.8%
16% 500 index
16.8% Extended Market Index ("completes" the 500 index in His 403b and Her SIMPLE IRA)
10% Total Bond Market
Thank you so much for your time and effort. The Extended market addition looks like a great addition for diversification.
retiredjg wrote: Sun Jun 20, 2021 11:18 am Here is the full version.

https://www.bogleheads.org/wiki/Placing ... ed_account
Thank you for that. I'll give it a read through so I have a better understanding of the account size implications you mentioned.

Again. Thank you!
Topic Author
kristin735
Posts: 13
Joined: Wed Jun 09, 2021 3:59 pm

Re: Portfolio Overhaul Advice Please

Post by kristin735 »

ruralavalon wrote: Sun Jun 20, 2021 10:19 am Although actively managed Dodge and Cox Income Fund (DODIX) (ER 0.42) is a good, well diversified, intermediate-term (effective duration = 5.40 years), investment-grade (credit quality = A) bond fund with a fairly low expense ratio. It's performance has compared well to a total bond Market Index fund.
Thank you for pointing that out. I had dismissed the D&C fund initially because of the ER without looking at performance.

I really appreciate time time an effort you've put in to guiding me.
retiredjg
Posts: 44826
Joined: Thu Jan 10, 2008 12:56 pm

Re: Portfolio Overhaul Advice Please

Post by retiredjg »

kristin735 wrote: Sun Jun 20, 2021 11:32 am Thank you for that. I'll give it a read through so I have a better understanding of the account size implications you mentioned.
Here's the ultra short version....if you want to be sure you have access to $25k from taxable, you should have at least $50k there so that you can get at least $25k even when the market is down 50%.
User avatar
David Jay
Posts: 11336
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: Portfolio Overhaul Advice Please

Post by David Jay »

kristin735 wrote: Sun Jun 20, 2021 8:58 am
David Jay wrote: Sun Jun 20, 2021 8:21 am I have held large value, small cap value, emerging market and REIT funds at various stages of my investing career, I no longer hold any of those tilts.
Good to know simplification can be a good choice. Do you think it matters whether a person is in their accumulation or decumulation phase?
I simplified shortly after joining Bogleheads and came to understand the total market dynamic. So I was still working at that time. I am now retired.

It most depends on your attitude. If you want to ignore your portfolio in your working years and just focus on your life, I would recommend a 3-fund. It is the default, low regret choice. If you enjoy analysis and fine tuning, the 6 fund you have outlined won’t hurt you…
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius
Post Reply