Help with portfolio

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Topic Author
JohnnyRedBeard
Posts: 31
Joined: Tue Dec 20, 2016 1:44 pm

Help with portfolio

Post by JohnnyRedBeard »

Hello! I am looking for a general opinion of my portfolio and where I would need to adjust.

Background:
  • - 32 and I make about 50k/yr with bonuses
    - No credit card debt
    - Only debt I have is my mortgage and living expenses
    - Currently I contribute to a separate Roth IRA held at Fidelity and a 401k through my employer.
    - I am currently contributing 12% of my salary for my 401k. And any spare cash for the Roth. (So far this year I only contributed $500)
    - I may have a possible high 6 figure or low 7 figure inheritance, but I don't want to rely on this. And would like to plan as if I will not be receiving any inheritance
My employer matches 10% of what I contribute. Employer DOES NOT match salary. Example: If I contribute $100 / week. My employer will match $10 / week.

401k:
Current allocation: Total balance: Around 18k
  • - Vanguard Target Retirement 2050 Inv VFIFX $2,600
    - Vanguard 500 Index Admiral VFIAX $15,050
    - Key Guaranteed Portfolio Fund 1.2 % return $400

Weekly paycheck allocation:
  • - 60% Vanguard 500
    - 30% Target 2050
    - 10% Guaranteed
Available funds:
  • Vanguard Target Retirement Income Inv VTINX
    Vanguard Target Retirement 2010 Inv VTENX
    Vanguard Target Retirement 2015 Inv VTXVX
    Vanguard Target Retirement 2020 Inv VTWNX
    Vanguard Target Retirement 2025 Inv VTTVX
    Vanguard Target Retirement 2030 Inv VTHRX
    Vanguard Target Retirement 2035 Inv VTTHX
    Vanguard Target Retirement 2040 Inv VFORX
    Vanguard Target Retirement 2045 Inv VTIVX
    Vanguard Target Retirement 2050 Inv VFIFX
    Vanguard Target Retirement 2055 Inv VFFVX
    American Funds Intl Gr And Inc R6 International Funds RIGGX
    American Funds New World R6 International Funds RNWGX
    Vanguard Developed Markets Index Admiral International Funds VTMGX
    Vanguard Small Cap Growth Index Admiral Small Cap Funds VSGAX
    Vanguard Small Cap Index Adm Small Cap Funds VSMAX
    Vanguard Small Cap Value Index Admiral Small Cap Funds VSIAX
    Janus Enterprise N Mid Cap Funds JDMNX
    Vanguard Mid Cap Index Fund - Admiral Mid Cap Funds VIMAX
    Wells Fargo Advantage Spec Md Cp Val R6 Mid Cap Funds WFPRX
    American Funds AMCAP R6 Large Cap Funds RAFGX
    JPMorgan Equity Income R6 Large Cap Funds OIEJX
    Vanguard 500 Index Admiral Large Cap Funds VFIAX
    JPMorgan Government Bond Select Bond Funds HLGAX
    Metropolitan West Total Return Bond I Bond Funds MWTIX
    Vanguard Interm-Term Bond Index Adm Bond Funds VBILX
    Key Guaranteed Portfolio Fund Fixed
Notes:
I am looking to be a bit more aggressive. 80/20 or 70/30 stocks/bonds
I know I shouldn't be invested in a target date fund and a fixed income fund. That is why I am here.
Another side note is most of the funds that I am considering are adm. I don't have enough to invest in these funds yet?

Roth IRA: Total Balance: about $8650
  • Fidelity Contrafund - FCNTX - $4550
    Fidelity Low Priced Stock - FLPSX - $4100
Any idea of what I should do with my Roth? I believe if I invest in Fidelity funds expenses are greatly reduced.
User avatar
CAsage
Posts: 3539
Joined: Sun Mar 27, 2016 6:25 pm

Re: Help with portfolio

Post by CAsage »

For your Roth at Fidelity, how about considering their rock-bottom-cheap index funds? Switch to 80% stock 20% bond (or 75/25) with these super cheap funds, you could do a lot worse! For your 401k, either do all Target (set and forget) or pick 3 cheapest funds and split it (stock, foreign stock, bonds). If you don't have enough for their Premium $10K min funds, put it all in one fund, put the bonds in your 401k until you build up a bigger balance. Asset diversification should be across everything.

Fidelity® Total Market Index Premium ( FSTVX ) .045%
Fidelity® US Bond Index Premium ( FSITX) ) .050%

Interesting trade, you get a modest benefit by contributing to your 401k, but the Roth tax free forever is compelling. I am guessing (single, mortgage) that you are in the lowest Federal tax bracket, so if you think that is likely to go up, consider splitting money between them, up to theh $5500 for Roth and anything else in 401k. Not really sure which is better in long run, depends on future income.
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.
jpelder
Posts: 1106
Joined: Mon Jan 26, 2015 2:56 pm
Location: Concord, NC

Re: Help with portfolio

Post by jpelder »

Since your stable-value fund in the 401k isn't great right now (only 1.5%), you probably ought to use the Vanguard Intermediate-Term Bond Index instead. You could do 80%-90% or so Target 2050 (which will be 90% stocks for the next ten years or so) and the balance Intermediate-Term Bond (or Guaranteed Income, if you prefer). This would give you an approximately 80-20 allocation without too much fuss. You could do the same in your Roth IRA (with Fidelity's Freedom Index Funds.)
User avatar
BL
Posts: 9874
Joined: Sun Mar 01, 2009 1:28 pm

Re: Help with portfolio

Post by BL »

Here is a good pdf booklet to give you some basic ideas:
https://www.etf.com/docs/IfYouCan.pdf

The 3-fund portfolio is great. There is a long thread on that and a page in the Wiki as well. Target fund is very similar with small amount of International bond added, which requires no rebalancing. Set it and forget it!

I suggest you use only Target funds in both places. The years near retirement may be about 10% bonds, so if you want more bonds choose a much nearer date; try 2040 or 2025. If you also use Fidelity, search for the target INDEX funds, which are very low-Expense-Ratio funds. Do not use their regular target date funds which are much more expensive.

(The two funds suggested by above poster CAsage would also work fine. In 401k you could use the V. 500 index and V. bond fund. Keeping it simple is the best way to go.) There are several simple ways to go.

For more help here, you probably should list the ERs of the funds you listed.

Not sure if I see a limit to employer matching, but I would contribute as much as possible where I could get a match.
Topic Author
JohnnyRedBeard
Posts: 31
Joined: Tue Dec 20, 2016 1:44 pm

Re: Help with portfolio

Post by JohnnyRedBeard »

Expenses

401k Available funds:
  • Vanguard Target Retirement Income Inv VTINX 0.16%
    Vanguard Target Retirement 2010 Inv VTENX 0.16%
    Vanguard Target Retirement 2015 Inv VTXVX 0.16%
    Vanguard Target Retirement 2020 Inv VTWNX 0.16%
    Vanguard Target Retirement 2025 Inv VTTVX 0.16%
    Vanguard Target Retirement 2030 Inv VTHRX 0.16%
    Vanguard Target Retirement 2035 Inv VTTHX 0.16%
    Vanguard Target Retirement 2040 Inv VFORX 0.16%
    Vanguard Target Retirement 2045 Inv VTIVX 0.16%
    Vanguard Target Retirement 2050 Inv VFIFX 0.16%
    Vanguard Target Retirement 2055 Inv VFFVX 0.16%
    American Funds Intl Gr And Inc R6 International Funds RIGGX 0.58%
    American Funds New World R6 International Funds RNWGX 0.65%
    Vanguard Developed Markets Index Admiral International Funds VTMGX 0.09%
    Vanguard Small Cap Growth Index Admiral Small Cap Funds VSGAX 0.08%
    Vanguard Small Cap Index Adm Small Cap Funds VSMAX 0.08%
    Vanguard Small Cap Value Index Admiral Small Cap Funds VSIAX 0.08%
    Janus Enterprise N Mid Cap Funds JDMNX 0.68%
    Vanguard Mid Cap Index Fund - Admiral Mid Cap Funds VIMAX 0.08%
    Wells Fargo Advantage Spec Md Cp Val R6 Mid Cap Funds WFPRX 0.76%
    American Funds AMCAP R6 Large Cap Funds RAFGX 0.37%
    JPMorgan Equity Income R6 Large Cap Funds OIEJX 0.50%
    Vanguard 500 Index Admiral Large Cap Funds VFIAX 0.05%
    JPMorgan Government Bond Select Bond Funds HLGAX 0.48%
    Metropolitan West Total Return Bond I Bond Funds MWTIX 0.43%
    Vanguard Interm-Term Bond Index Adm Bond Funds VBILX 0.09%
    Key Guaranteed Portfolio Fund Fixed N/A
Roth IRA
  • Fidelity Contrafund - FCNTX 0.70%
    Fidelity Low Priced Stock - FLPSX 0.88%
First off I'd like to thank everyone for their input. Here are the expense ratios for the available funds. I'd like to keep it simple too. The 3 fund portfolio seems very promising.. I also like the Vanguard 500 / Vanguard Bond idea in the 401k 80/20 split? However I don't have enough to invest in the bond index yet without incurring extra fees. I do also like the Target date fund idea.. set it and forget it.

I am a bit confused on how to diversify across my 401k and Roth with the options that are available to me.
mtnlover
Posts: 263
Joined: Mon Jul 14, 2014 8:50 am

Re: Help with portfolio

Post by mtnlover »

Not your question, but........I had an employer once with the same extremely stingy match arrangement. It means that if you put in $500/month for a year, your employer will contribute a whopping $600 that year. In the long run you might want to look for an employer with a better match offering. Nobody will look out for your best interest better than you yourself. Best wishes.
Topic Author
JohnnyRedBeard
Posts: 31
Joined: Tue Dec 20, 2016 1:44 pm

Re: Help with portfolio

Post by JohnnyRedBeard »

grandmacassie wrote:Not your question, but........I had an employer once with the same extremely stingy match arrangement. It means that if you put in $500/month for a year, your employer will contribute a whopping $600 that year. In the long run you might want to look for an employer with a better match offering. Nobody will look out for your best interest better than you yourself. Best wishes.
I agree. I suppose it is better than no match at all.. I have tossed the idea around a bit of looking for an opportunity elsewhere. However I have been at my current employer for going on 11 years now. I am pretty well established and there are always opportunities to advance if I choose to.
User avatar
BL
Posts: 9874
Joined: Sun Mar 01, 2009 1:28 pm

Re: Help with portfolio

Post by BL »

You don't have to have the same in each account. Also the balance doesn't have to be perfect at first. This is not a forever choice, it can be changed, hopefully not often.

Start with simple. Those suggested are very diversified, low-cost, and simple. Going off in other directions doesn't make it more diversified nor better.
Topic Author
JohnnyRedBeard
Posts: 31
Joined: Tue Dec 20, 2016 1:44 pm

Re: Help with portfolio

Post by JohnnyRedBeard »

With Fidelity, for example, you could construct a three-fund portfolio using:

Fidelity Total Market Index Fund Investor Class (FSTMX) or Premium Class (FSTVX)
Fidelity Total International Index Fund Investor Class (FTIGX) or Premium Class (FTIPX)
Fidelity U. S. Bond Index Fund Investor Class (FBIDX) or Premium Class (FSITX)
According to the wiki page, Fidelity has Investor class versions of the funds that were suggested by CAsage. Would it be worth it to go with these for the time being until I have enough to invest in the Premium class? These funds have a lower expense ratio than my current funds in my Roth.
User avatar
BL
Posts: 9874
Joined: Sun Mar 01, 2009 1:28 pm

Re: Help with portfolio

Post by BL »

No problem if you have the 2500/fund. If not, buy just one.
Topic Author
JohnnyRedBeard
Posts: 31
Joined: Tue Dec 20, 2016 1:44 pm

Re: Help with portfolio

Post by JohnnyRedBeard »

I am reviving an old thread of mine.. I suppose this is a bit of two part question. From what I gather the Roth should contain funds that expect the most return. Correct? With that in mind I'd like to keep my Roth 100% invested in stocks and be heavier in bonds in my 401k. Currently my allocation is a bit off but eventually I'd like to be 80 stocks / 20 bonds.

FSTVX - Fidelity Total Market Index Premium
or
FUSVX - Fidelity 500 Index Premium

Any other fund suggestions?

Current Roth IRA investments:
FBIDX - U.S. BOND INDEX INVESTOR CLASS - 45%
FSTMX - TOTAL MKT INVESTOR CLASS - 55%


I just past the 10k mark and I plan on selling these two funds to purchase a Premium class stock fund. I am wondering whats the difference between the two Fidelity funds?


Current 401k investments:
VFIAX - Vanguard 500 Index Admiral - 52%
VBILX - Vanguard Interm-Term Bond Index Adm - 44%
Key Guaranteed Portfolio Fund - 4%


Does any one have any other suggestions on what I could do to improve my allocation between my Roth and 401k? I was thinking about the going with Target date funds in both accounts as BL suggested, but I personally like being a bit more hands on, possibly gaining a bit more with lower expense ratios?
Topic Author
JohnnyRedBeard
Posts: 31
Joined: Tue Dec 20, 2016 1:44 pm

Re: Help with portfolio

Post by JohnnyRedBeard »

I have yet to pull the trigger on my Roth. I was leaning towards investing 100% FSTVX - Fidelity Total Market Index and removing all bonds in my Roth. I am debating about just pulling the trigger but I keep thinking that if I do that I'm "purchasing" this fund at near it's all time "high"
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