Portfolio Tune-Up: Please Help!

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Posts: 24
Joined: Sat May 23, 2009 1:44 pm

Portfolio Tune-Up: Please Help!

Post by taico » Sun Mar 24, 2013 6:06 am

Dear Bogleheads,

Thanks to everyone's help on the board, it took some time to finally get to a point that I am now diversified in a simple manner with investments and custodian risk. However due to recent job loss, I have rolled over my 401K and needed a portfolio review. At this time, I would like to seek your guidance on my portfolio. Please see below and thanks in advance for your help.

Emergency funds: 18 Months

Debt: 7-Year ARM Mortgage at 3.25% (6.5 years left)

Tax Filing Status: Married Filing Separately

Tax Rate: 28% Federal, 9% State

State of Residence: CA

Age: 36

Desired Asset allocation: 50% stocks / 50% bonds

Desired International allocation: 50% of stocks

Taxable at Vanguard
25% Vanguard Total Stock Market Index - Admiral (0.06%)
25% Vanguard Total International Stock Market Index - Admiral (0.16%)

Taxable at Fidelity
25% Spartan Short-Term Treasury Bond Index Fund - Advantage (0.10%)

Roth IRA at Fidelity
10% Spartan Inflation-Protected Bond Index Fund - Advantage (0.10%)

Rollover IRA at Fidelity
15% Spartan Inflation-Protected Bond Index Fund - Advantage (0.10%)


1. Am I too conservative on my emergency fund? Given my job loss situation, I think there's enough to cover through finding the next job. It just seems like a bad tradeoff for cash liquidity earning zero, but at the same time a hassle to chase small yields opening additional accounts. The EM fund is sitting in savings account earning .2%. Should I check into places like Ally's to put them in something like No Penalty CD?

2. What do you think about my 100% TIPs allocation in tax advantage space? I've struggled with either to put it all in Total Bonds or do the 50/50 split with TIPs. However, my goal is to ultimately to preserve capital and taking risk on the equity side. Hence, my allocation to international is 50%. Is 100% TIPs and short term treasury still a good combo for today's market? I'm not second guessing since all the bad news on TIPs and treasuries these days.

3. What would you do differently, if any (dialing down equity or international %s, change allocation mix, change funds, etc.)? Give my situation, is this portfolio safe enough to sleep at night? I guess I am looking for reassurance.

4. Does it even make sense to pay some portion of my mortgage off? Now without a job, I am hesitate to do so, but always been on the back of my mind.


Posts: 1007
Joined: Sat Aug 06, 2011 7:01 am

Re: Portfolio Tune-Up: Please Help!

Post by FillorKill » Sun Mar 24, 2013 6:28 am

1. If you have no job be happy you have a large EF. Reconsider the EF size once you have your next job.

2. I would start buying I Bonds and perhaps some CDs in taxable if/as needed. Not like there are fabulous FI options right now.

3. You have a somewhat low equity AA combined with an international allocation that is on the higher side of the usual range. If that's what you want and will stick to then that's fine. There is plenty of room for personal choice here. A somewhat conservative equity AA especially when the market has been on a bit of a run is a good thing in my book but I lean conservative.

4. I would not relieve myself of cash until employed again - be that extra mortgage payments or whatever. Cash is king when you have no income.

I think your set-up is reasonable but please consider I bonds and other FI options. Only you know [or will discover] if this is a plan you can stick to and sleep at night. If you fear it is too risky then adjust the plan before you implement it. The 'stick to it part' is very important.

EDIT - truth in posting here, I had to edit my response to question 2 because I misread your total FI allocation as TIPS, not just the 50% in tax advantaged. It's early - more coffee needed!

Posts: 24
Joined: Sat May 23, 2009 1:44 pm

Re: Portfolio Tune-Up: Please Help!

Post by taico » Sun Mar 24, 2013 1:45 pm

Thanks BBL for your comments!

Anyone else out there with additional thoughts?

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