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Portfolio Review

Posted: Thu May 21, 2015 7:44 pm
by Ashley1748
Hi everyone,

I am seeking review of our retirement portfolio. Thank you!

Emergency funds: Three months (not part of asset allocation)
Debt: None
Tax Filing Status: Married Filing Jointly
Tax Rate: 39.6% Federal, 0% State
State of Residence: WA
Age: 60, 55
Desired Asset allocation: 50% stocks / 50% bonds
Desired International allocation: 30% of stocks
Portfolio size is in low eight figures, ~50x of desired annual income

Current asset allocation, funds (expense ratios) are as follows:

Tax-deferred accounts
8.5% - Total aggregate bonds, VBTLX (0.07), AGG (0.08)
1.75% - International bonds, VTABX (0.19)

Taxable accounts
9.5% - Limited term Municipals, VMLUX (0.12)
20.25% - Intermediate term Municipals, VWIUX (0.12)
10% - Long term, Municipals, VWLUX (0.12)
34% - Total Stock Market, SCHB (0.04), VTSAX (0.05)
1% - Small Cap Index. VB (0.09)
14% - Total International, VTIAX (0.14)
1% - Emerging Markets Index, VWO (0.15)

Re: Portfolio Review

Posted: Fri May 22, 2015 4:30 am
by Bogle_Feet
Jim Cramer's allocation ratio recommendations:

60 to retirement - 40% - 50% bonds
After retirement: Own some stocks, approximately one-third of your portfolio. Focus on high yielding stocks that can generate more income with less risk.

Bob Brinker recommends more exposure to stocks with a 50/50 allocation for a 70 year old.

Re: Portfolio Review

Posted: Fri May 22, 2015 6:37 am
by livesoft
Looks great to me!

But I'm just curious, what's with the 1% allocations to VB and VWO? They seem out of place unless you are either slowly getting rid of them or slowly increasing them. Can you please explain how they came to be in your portfolio since they kind of stick out from the rest of your portfolio?

Re: Portfolio Review

Posted: Fri May 22, 2015 8:04 am
by ruralavalon
Welcome to the forum :) .
Ashley1748 wrote:I am seeking review of our retirement portfolio. Thank you!
Both the asset allocation and the funds selected look fine in my opinion.

Re: Portfolio Review

Posted: Fri May 22, 2015 8:18 am
by Grt2bOutdoors
Looks good to me. 50x annual draws? - that is some margin of safety you've got there!

BTW, this is the Bogleheads - we don't subscribe to Jim Cramer or CNBC except to turn the volume off and watch them bicker amongst themselves. :twisted:

Re: Portfolio Review

Posted: Fri May 22, 2015 10:50 am
by Ashley1748
livesoft wrote:Looks great to me!

But I'm just curious, what's with the 1% allocations to VB and VWO? They seem out of place unless you are either slowly getting rid of them or slowly increasing them. Can you please explain how they came to be in your portfolio since they kind of stick out from the rest of your portfolio?
Good question. The idea was to use some money to overweight growth. So, I decided to put 1% for small cap and another 1% to emerging markets. In the end, I am not sure if the amounts are big enough to help either way.

When I have some tax advantaged situations in the future, I might roll them to market weight.

Re: Portfolio Review

Posted: Fri May 22, 2015 11:29 am
by Ashley1748
Bogle_Feet wrote: Bob Brinker recommends more exposure to stocks with a 50/50 allocation for a 70 year old.
Thanks. The plan is to stay at 50/50 for rest of my life.

Re: Portfolio Review

Posted: Fri May 22, 2015 11:33 am
by Ashley1748
Grt2bOutdoors wrote:Looks good to me. 50x annual draws? - that is some margin of safety you've got there!
Thanks. The only reason i put it there was in case this should be a factor in the portfolio allocation. Some added context. Both of us are conservative investors. Our original idea was to have 40/60 Stock/Bond allocation. In his book on asset allocation, Rick Ferri made a good point on taking a longer-term view with the portion money that is likely to survive retirement or will pass on as inheritance. I think about 25% to 30% of the portfolio qualifies in this category. So, we decided to adjust the overall portfolio to 50/50 and the plan is to stay with this allocation.