Help my portfolio is messy

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Fiat lux
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Help my portfolio is messy

Postby Fiat lux » Fri Mar 10, 2017 4:53 pm

I have been investing on my own within my Schwab account since 2011. I just stumbled across this forum a couple of weeks ago and I like the simplistic boglehead approach. Previously I had been doing AA for each account as though it stood alone, and never considered all of my accounts as one portfolio. I think my portfolio is too complicated and disorganized.

My wife and I are both 34 years old and we have a 20 month old son. Any advice ? Which securities should I dump and reallocate to simplify things? I listed the total worth of each account and the percent of each security within that one account.



Debt: House $293k at 4.875% (30 year fixed mortgage)
Car $23,500 (2.69%) (72 months)

Tax filing: Married, jointly

Age: Both 34yrs




His IRA Roth (~$51k)

SHG (Shinhan Financial) .88%
WMT (Walmart) 2.36
PHG (Philips) 2.54
SEAS (Seaworld. Busch Gardens) 1.85
MOS (mosaic - ferilizer company) 1.13
QQQ (powershares-nasdaq) (er- .20) 3.99
SCHX (schwab us large cap) (er-.03) 17.7
SCHV (schwab us large cap value) (er-.04) 12.07
DEF (guggenheim defensive equity) (er-.61) 5.17
SCHH (schwab reit etf) (er-.07) 5.44
VT (vanguard total world stck etf) (er-.11) 4.4
SCHZ (schwab us aggregate bond etf) (er-.04) 1.88
SCHF (schwab international equity etf) (er-.06) 1.88
GML (SPDR Emerging Market Latin Amrca etf) (er-.49) .58
SWPPX (Schwab S&P Index fund) (er-.03) 2.44
SWSCX (Schwab Small Cap Equity fund) (er-1.10) 3.7
SWHFX (Schwab Healthcare Fund) (er-.80) 5.44
Cash $3600

Her Roth IRA ($31,400)
LOW (Lowe's Home Improvement) 13.78
POR (Portland General Electric) 1.12
UAA (Under Armour) .92
XLY (SPDR Consumer Discretionary Select Sector) (er-.14) 2.77
VFH (Vanguard Financials ETF) (er-.10) 2
SCHF (Schwab International Equity ETF) (er-.06) 1.68
FEU (SPDR Stoxx Europe 50 ETF) (er-.29) 1
SWTSX (Schwab Total Stock Market ETF) (er-.03) 39.61
SWHGX (Schwab MArket Track Growth) (er-.59) 7.86
SWERX (Schwab MArket Target Fund 2040) (er-.70) 13.12
Cash $5,000

Taxable Brokerage
$11,200
HD (Home Depot) 30%
LMT (Lockheed Martin) 12.7
DIS (Disney) 27.2S
SPLV (Powershare S&P Low Volatility ETF) (er-.25) 15.54
SCHD (Schwab US Dividend Equity ETF) (er-.07) 4.82
SAMBX (RidgeWorth Seix Floating Rate High Income Fund I Shares) (er-.62) 4.75
AONIX (American Century Investments One Choice Portfolio®: Very Conservative Investor Class) (er-.70) 4.47

**I have owned above individual stocks for many, many years. I am not investing more into individual stocks.. Also, I am building my Emergency funds as of now and am no longer funding taxable account till ER fund is approx $70k.
Last edited by Fiat lux on Wed Mar 22, 2017 10:03 am, edited 3 times in total.

onourway
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Re: Help my portfolio is messy

Postby onourway » Fri Mar 10, 2017 5:02 pm

Please add fund names in addition to the ticker symbols! Thanks!

delamer
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Re: Help my portfolio is messy

Postby delamer » Fri Mar 10, 2017 5:14 pm

The ticker symbols won't mean much to many of us. I suggest you provide the full names.

Generally, though, you are correct that you have too many different assets. I assume you understand that there are no tax consequences for selling within the IRAs? Given that, determine a Boglehead-type lazy portfolio that you are comfortable with, and sell the assets that don't fit and buy to fill in the gaps.

The taxable does have income tax consequences, so you need to be more careful. If you decide you don't want to hang on to some of the taxable assets then make a plan to sell them to minimize taxes, maybe over a couple years (keeping in mind that it is better to pay capital gains taxes now than to have your assets lose 30% of their value in a bear market later).

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ruralavalon
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Re: Help my portfolio is messy

Postby ruralavalon » Fri Mar 10, 2017 5:14 pm

Please add the fund names and expense ratios,in addition to the ticker dumbs. Please just add this to your original post using the edit button, so that all of your information is in one place.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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Peter Foley
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Re: Help my portfolio is messy

Postby Peter Foley » Fri Mar 10, 2017 5:17 pm

In terms of simplification, you can sell all holdings in your Roth accounts and reinvest in a few funds without any tax consequences. I use Schwab myself. They have a low cost total stock market and a low cost total international fund that are appropriate choices.

If you have a tax deferred account, you do not list one, that would be the preferred account for your bond allocation.

Chuck
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Re: Help my portfolio is messy

Postby Chuck » Fri Mar 10, 2017 5:17 pm

You should add the cost basis of the assets in the taxable account. It would help to determine the tax cost of moving out of those investments.

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Fiat lux
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Re: Help my portfolio is messy

Postby Fiat lux » Fri Mar 10, 2017 9:36 pm

Peter Foley wrote:In terms of simplification, you can sell all holdings in your Roth accounts and reinvest in a few funds without any tax consequences. I use Schwab myself. They have a low cost total stock market and a low cost total international fund that are appropriate choices.

If you have a tax deferred account, you do not list one, that would be the preferred account for your bond allocation.


I am in the process of opening 401ks for my wife and I through my business. That will be our only 2 tax deferred accounts opening within the next month or so.

What securities do you use at schwab for the sectors you mentioned above? I am using a total stock market fund index in my wife's ira (SWTSX).

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in_reality
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Re: Help my portfolio is messy

Postby in_reality » Fri Mar 10, 2017 9:58 pm

Fiat lux wrote:
Peter Foley wrote:In terms of simplification, you can sell all holdings in your Roth accounts and reinvest in a few funds without any tax consequences. I use Schwab myself. They have a low cost total stock market and a low cost total international fund that are appropriate choices.

If you have a tax deferred account, you do not list one, that would be the preferred account for your bond allocation.


I am in the process of opening 401ks for my wife and I through my business. That will be our only 2 tax deferred accounts opening within the next month or so.

What securities do you use at schwab for the sectors you mentioned above? I am using a total stock market fund index in my wife's ira (SWTSX).


For the equivalent of a three fund portfolio, see this link. (it pulls data from Morningstar so sometimes is down when they refresh their page). You might want to make your own copy.

https://docs.google.com/spreadsheets/d/ ... =842559917

Schwab also has a new target date index series that is a mutual fund which uses the above ETFs. See https://www.schwabfunds.com/secure/file/P-9430864 The ER is 0.13%. Schwab also has target date retirement fund in the 0.5%+ range. Use the cheaper index retirement funds if you go that route.

Schwab recently lowered many of their mutual fund ERs. Keep in mind that in a taxable account, that the ETFs will be slightly advantageous since there won't be yearly capital gains to pay taxes on (only capital gains when you sell). See http://www.schwab.com/public/schwab/inv ... uity/index

Note: They don't have emerging or small cap international for mutual funds.
[60% US _ 26% DEV _ 14% EM] | (-16% LC _ +8% MC _ +8% SC) | [47% FND/VAL _ 40% MKT _ 7% MOM _ 6% REIT] | (+/- 5% or *25% rebalancing bands)

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Peter Foley
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Re: Help my portfolio is messy

Postby Peter Foley » Fri Mar 10, 2017 10:16 pm

Fiat Lux wrote:

What securities do you use at schwab for the sectors you mentioned above? I am using a total stock market fund index in my wife's ira (SWTSX).



I use SWTSX (total US market) and SWISX (total international stock market). I moved to SWTSX about 10 years ago in all accounts except taxable accounts because I had long term gains in the Schwab 1000 fund.

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Fiat lux
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Re: Help my portfolio is messy

Postby Fiat lux » Fri Mar 17, 2017 9:15 am

I just went back and listed all the names of all the securities i listed last weekend along with the expense ratios (plz see initial post). This was a great exercise as I realized how high some of the ERs were for some funds. I would like to transition my portfolio to a more simplistic style, preferably one of the lazy portfolios. Also, it should be mentioned I am opening a safe harbor 401k for myself and my wife through our business this week.

retiredjg
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Re: Help my portfolio is messy

Postby retiredjg » Fri Mar 17, 2017 9:32 am

His IRA and Her Roth IRA can be cleaned up almost instantly (once you have a plan in mind). However, the taxable account will have a tax cost to clean it up.

The next step would be to figure out the gains and losses on each holding in the taxable account. Also, separate gains and losses into long term and short term.

We need know know your tax bracket. Do you know how to determine that?

What is the taxable account for? Retirement? House? Something else?

How much can you save each year in each account?

What stock to bond ratio do you want?

Take a look at the link at the bottom of this message for the information we need to help you. Add the missing information to the original post. When done, send a new post to notify people you have done it.

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in_reality
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Re: Help my portfolio is messy

Postby in_reality » Fri Mar 17, 2017 3:36 pm

You don't want a dividend paying fund like SCHD in a taxable account. I'd turn off dividend reinvesting for all your stocks in taxable account actually,
[60% US _ 26% DEV _ 14% EM] | (-16% LC _ +8% MC _ +8% SC) | [47% FND/VAL _ 40% MKT _ 7% MOM _ 6% REIT] | (+/- 5% or *25% rebalancing bands)

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Fiat lux
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Re: Help my portfolio is messy

Postby Fiat lux » Fri Mar 17, 2017 4:51 pm

retiredjg wrote:His IRA and Her Roth IRA can be cleaned up almost instantly (once you have a plan in mind). However, the taxable account will have a tax cost to clean it up.

The next step would be to figure out the gains and losses on each holding in the taxable account. Also, separate gains and losses into long term and short term.

We need know know your tax bracket. Do you know how to determine that?

What is the taxable account for? Retirement? House? Something else?

How much can you save each year in each account?

What stock to bond ratio do you want?

Take a look at the link at the bottom of this message for the information we need to help you. Add the missing information to the original post. When done, send a new post to notify people you have done it.



I just spoke with my CPA in regards to my federal income tax bracket. He is saying I will be in the 25% bracket for 2016, although I suspect it may be the 28% bracket. I will know for your sure next week, but perhaps that small variance wont make a difference for this purpose.

Honestly, I do not have a purpose tagged to the taxable account yet- I began funding it when we only had the 2 Roth IRAs. Id say it's for retirement, however between our 2 Roth IRAs and now the 2 401ks (which we just opened) we will have plenty of tax deferred space. In fact, this year we will not be able to max out both the Roth IRAs and 401ks...

Should I still fund the taxable account, or max out my Roth IRAs and then fund 401k as much as possible?.

As I stated above, still building my emergency fund for now so I have stopped putting money into the taxable account.

As far as my stock to bond ratio, I figure for my age (34 yrs) it should be about 70:30 stocks to bonds.

Thoughts?

retiredjg
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Re: Help my portfolio is messy

Postby retiredjg » Fri Mar 17, 2017 7:48 pm

Fiat lux wrote:I just spoke with my CPA in regards to my federal income tax bracket. He is saying I will be in the 25% bracket for 2016, although I suspect it may be the 28% bracket. I will know for your sure next week, but perhaps that small variance wont make a difference for this purpose.

Unless your income is going way up or way down in the future, your long term capital gains rate will be 15%. Your short term rate will be 25% (or 28%). You need to know these numbers to determine what to do with your taxable account.

Honestly, I do not have a purpose tagged to the taxable account yet- I began funding it when we only had the 2 Roth IRAs. Id say it's for retirement, however between our 2 Roth IRAs and now the 2 401ks (which we just opened) we will have plenty of tax deferred space. In fact, this year we will not be able to max out both the Roth IRAs and 401ks...

If it is for long term investing, that's all that is needed. If this were a house downpayment, you would do something different.

Should I still fund the taxable account, or max out my Roth IRAs and then fund 401k as much as possible?.

Fill the 401k and Roth IRAs first. Don't put retirement money in taxable until all that space is filled.


Thoughts?

Depends on what you do with the taxable account. Depends a little on the 401k choices you end up with,but we can ignore that for the time being.

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Fiat lux
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Re: Help my portfolio is messy

Postby Fiat lux » Sun Mar 19, 2017 10:15 am

I went back to my original post and added a little more info about my situation, namely state of residence, debt, and tax filing status.

Again, my goal here is to de-complicate my portfolio.

At this point, I am trying to decide on which lazy portfolio strategy I will use towards this end. I have done some reading on Rick Ferri's Core 4 approach. I like that this method adds some real-estate into the mix through a REIT. Anyone have thoughts on this approach ?

retiredjg
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Re: Help my portfolio is messy

Postby retiredjg » Sun Mar 19, 2017 5:09 pm

The Core Four is a fine idea if it works into the space you have in your accounts (looks like it should). However, nobody can help you figure out how to implement the Core Four without knowing what you are going to do with the taxable account. And it will soon be important to know what is available in your 401k.

RDHlooking4FIRE
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Re: Help my portfolio is messy

Postby RDHlooking4FIRE » Sun Mar 19, 2017 8:11 pm

in_reality wrote:You don't want a dividend paying fund like SCHD in a taxable account. I'd turn off dividend reinvesting for all your stocks in taxable account actually,


Why? Please explain? Why turn off reinvestment in taxable account? Is it better to take dividends into the core account. Then do what with the cash?

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in_reality
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Re: Help my portfolio is messy

Postby in_reality » Sun Mar 19, 2017 8:30 pm

RDHlooking4FIRE wrote:
in_reality wrote:You don't want a dividend paying fund like SCHD in a taxable account. I'd turn off dividend reinvesting for all your stocks in taxable account actually,


Why? Please explain? Why turn off reinvestment in taxable account? Is it better to take dividends into the core account. Then do what with the cash?


Invest in a diversified index. I'm not into individual company risk. Yeah, I know you think you can outperform via good selection...
[60% US _ 26% DEV _ 14% EM] | (-16% LC _ +8% MC _ +8% SC) | [47% FND/VAL _ 40% MKT _ 7% MOM _ 6% REIT] | (+/- 5% or *25% rebalancing bands)

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Fiat lux
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Re: Help my portfolio is messy

Postby Fiat lux » Sun Mar 19, 2017 8:42 pm

retiredjg wrote: nobody can help you figure out how to implement the Core Four without knowing what you are going to do with the taxable account. .


Like I mentioned earlier, between our Roth IRAs and new 401ks (beginning to fund within the month) we will be unable to fund the taxable account. This is because I would rather build up my emergency fund to 6 months living expenses and right now it is at 2-3 months. I believe the ER fund will stay liquid and totally uninvested. So for the purposes of the core 4 , figure 2 Roth IRAs and 2 401ks.

retiredjg
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Re: Help my portfolio is messy

Postby retiredjg » Mon Mar 20, 2017 7:19 am

Sorry. I didn't mean what you are going to add to the taxable account. I meant what are you going to get rid of and in what time frame.

CyclingDuo
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Re: Help my portfolio is messy

Postby CyclingDuo » Mon Mar 20, 2017 8:17 am

Fiat lux wrote:I have been investing on my own within my Schwab account since 2011. I just stumbled across this forum a couple of weeks ago and I like the simplistic boglehead approach. Previously I had been doing AA for each account as though it stood alone, and never considered all of my accounts as one portfolio. I think my portfolio is too complicated and disorganized.

My wife and I are both 34 years old and we have a 20 month old son. Any advice ? Which securities should I dump and reallocate to simplify things? I listed the total worth of each account and the percent of each security within that one account.

State of Residence: FL

Debt: House $293k at 4.875% (30 year fixed mortgage)
Car $23,500 (2.69%) (72 months)

Tax filing: Married, jointly

Age: Both 34yrs




His IRA Roth (~$51k)

SHG (Shinhan Financial) .88%
WMT (Walmart) 2.36
PHG (Philips) 2.54
SEAS (Seaworld. Busch Gardens) 1.85
MOS (mosaic - ferilizer company) 1.13
QQQ (powershares-nasdaq) (er- .20) 3.99
SCHX (schwab us large cap) (er-.03) 17.7
SCHV (schwab us large cap value) (er-.04) 12.07
DEF (guggenheim defensive equity) (er-.61) 5.17
SCHH (schwab reit etf) (er-.07) 5.44
VT (vanguard total world stck etf) (er-.11) 4.4
SCHZ (schwab us aggregate bond etf) (er-.04) 1.88
SCHF (schwab international equity etf) (er-.06) 1.88
GML (SPDR Emerging Market Latin Amrca etf) (er-.49) .58
SWPPX (Schwab S&P Index fund) (er-.03) 2.44
SWSCX (Schwab Small Cap Equity fund) (er-1.10) 3.7
SWHFX (Schwab Healthcare Fund) (er-.80) 5.44
Cash $3600

Her Roth IRA ($31,400)
LOW (Lowe's Home Improvement) 13.78
POR (Portland General Electric) 1.12
UAA (Under Armour) .92
XLY (SPDR Consumer Discretionary Select Sector) (er-.14) 2.77
VFH (Vanguard Financials ETF) (er-.10) 2
SCHF (Schwab International Equity ETF) (er-.06) 1.68
FEU (SPDR Stoxx Europe 50 ETF) (er-.29) 1
SWTSX (Schwab Total Stock Market ETF) (er-.03) 39.61
SWHGX (Schwab MArket Track Growth) (er-.59) 7.86
SWERX (Schwab MArket Target Fund 2040) (er-.70) 13.12
Cash $5,000

Taxable Brokerage
$11,200
HD (Home Depot) 30%
LMT (Lockheed Martin) 12.7
DIS (Disney) 27.2S
SPLV (Powershare S&P Low Volatility ETF) (er-.25) 15.54
SCHD (Schwab US Dividend Equity ETF) (er-.07) 4.82
SAMBX (RidgeWorth Seix Floating Rate High Income Fund I Shares) (er-.62) 4.75
AONIX (American Century Investments One Choice Portfolio®: Very Conservative Investor Class) (er-.70) 4.47

**I have owned above individual stocks for many, many years. I am not investing more into individual stocks.. Also, I am building my Emergency funds as of now and am no longer funding taxable account till ER fund is approx $70k.


Actually, it looks pretty good in terms of diversity and breadth! You've had the benefit of riding part of the rise out of the recession low by capturing the 2011 - 2013 bounce - and the subsequent bull market breakout that began in 2013 and remains in tact today. A nice rising tide for equities that lifted all boats.

In terms of the 3 stocks you hold in your taxable account alone, they have all outperformed the S&P, Dow, and Nasdaq in the your time frame quite handily. Bravo! Home Depot is on a tear and is poised to capture and outperform with an okay yield that wouldn't have me pulling the plug on that stock while things are rising. Ditto on Lockheed. Disney is doing well recently, and especially if it can breakout above the resistance at 120 would remain a hold. You've yet to experience a true devastating bear market as an investor, so just beware of how far things can fall. Those of us who have been through a lot over the decades, can attest to the double whammy of two nasty bear markets combined with two nasty black swan events durning a secular bear market from 2000 - 2013 (2013 is when the current bull market officially broke out and was confirmed). There will be more, and one stat to always focus on is that 70% of the time - that's right 70% - of your investing career the market will be at or near all time highs. So all the noise, chatter, fear mongering of overextended, market is ahead of itself, things look frothy, it's looking like a bubble, and on and on will permeate the news, media, and investing forums. Just to reiterate - 70% of the time the stock market is at or near its highs. Got it? 8-) Low and behold - check out HD, Lockheed, and Disney to see if they meet or or are near meeting that stat. :moneybag

Only you can make the decision as to what to do going forward, but be aware that there are BH members that do not hold any individual stocks, and there are BH members that do. So you will receive the full gamut of advice based on the particular BH member's experience and personal investing acumen(s). We have personally built a lot of capital over the past decades in individual stocks (both in taxable and tax deferred) with buy and hold strategies of companies growing their earnings, so we understand having a mix of index funds, bond funds, and individual stocks. Obviously, the dividends in your taxable account increase your ordinary income, so strategies to offset that via pre-tax contributions to your new 401k will help offset that. If you can afford to contribute enough for your retirement funds, and also enough to cover the dividends in your taxable - then all the better. Keep reinvesting those dividends in some form of investment as well!

Although your expense ratios on all the various funds/ETFs are not too high, that would be one area you might look to improve on the ones that are in the .5 - 1% range. The American Century Fund, Guggenheim Fund, Schwab Healthcare, Schwab Small Cap, Schwab Target Market, etc... are the ones where some leaks could be plugged in terms of ER fees. We have been able to trim ours down to a collective .10 that covers all funds/ETFs that we hold.

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in_reality
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Re: Help my portfolio is messy

Postby in_reality » Mon Mar 20, 2017 10:05 am

CyclingDuo wrote:In terms of the 3 stocks you hold in your taxable account alone, they have all outperformed the S&P, Dow, and Nasdaq in the your time frame quite handily. Bravo!


Yeah kudos and respect. It's tough for even talented managers who work in the field to maintain the performance though. I think you'd be well served by diversification. Hey, it appears you know better than I, so do take any of my comments with a grain of salt :sharebeer
[60% US _ 26% DEV _ 14% EM] | (-16% LC _ +8% MC _ +8% SC) | [47% FND/VAL _ 40% MKT _ 7% MOM _ 6% REIT] | (+/- 5% or *25% rebalancing bands)

CyclingDuo
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Re: Help my portfolio is messy

Postby CyclingDuo » Mon Mar 20, 2017 11:32 am

in_reality wrote:
CyclingDuo wrote:In terms of the 3 stocks you hold in your taxable account alone, they have all outperformed the S&P, Dow, and Nasdaq in the your time frame quite handily. Bravo!


Yeah kudos and respect. It's tough for even talented managers who work in the field to maintain the performance though. I think you'd be well served by diversification. Hey, it appears you know better than I, so do take any of my comments with a grain of salt :sharebeer


One could debate whether or not the percentage of their current portfolio that is already invested in diverse funds (including index funds), compared to the percentage they have invested in diverse individual stocks is or is not suited to reach their investing goals. We could also argue against various risk profiles having different returns (a 70/30 vs. a 50/50, etc...) meaning they beat or match or underperform the market. Owning individual stocks as an investment or part of one's overall investment portfolio can also mean that one underperforms the market, matches the market, or beats the market - all depending on a myriad of factors.

I was just pointing out that the three they have in the taxable portion of their portfolio that would have to be sold to fund index funds creating capital gains, have been excellent performers (HD, DIS, and Lockheed). Only they can make the choice to remain invested in those, and apportion any new money they would like to invest in their taxable into index funds or sell them and pay the capital gains. One can indeed have returns invested in individual stocks over time. Whether they meet, match, or beat the "market" is another issue.

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Fiat lux
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Re: Help my portfolio is messy

Postby Fiat lux » Tue Mar 21, 2017 6:54 pm

CyclingDuo wrote:
in_reality wrote:
CyclingDuo wrote:In terms of the 3 stocks you hold in your taxable account alone, they have all outperformed the S&P, Dow, and Nasdaq in the your time frame quite handily. Bravo!


Yeah kudos and respect. It's tough for even talented managers who work in the field to maintain the performance though. I think you'd be well served by diversification. Hey, it appears you know better than I, so do take any of my comments with a grain of salt :sharebeer


One could debate whether or not the percentage of their current portfolio that is already invested in diverse funds (including index funds), compared to the percentage they have invested in diverse individual stocks is or is not suited to reach their investing goals. We could also argue against various risk profiles having different returns (a 70/30 vs. a 50/50, etc...) meaning they beat or match or underperform the market. Owning individual stocks as an investment or part of one's overall investment portfolio can also mean that one underperforms the market, matches the market, or beats the market - all depending on a myriad of factors.

I was just pointing out that the three they have in the taxable portion of their portfolio that would have to be sold to fund index funds creating capital gains, have been excellent performers (HD, DIS, and Lockheed). Only they can make the choice to remain invested in those, and apportion any new money they would like to invest in their taxable into index funds or sell them and pay the capital gains. One can indeed have returns invested in individual stocks over time. Whether they meet, match, or beat the "market" is another issue.



As I stew over whether or not to liquidate a majority of my roth iras and convert to a handful of funds i have swayed between doing that or doing some type of hybrid. By that, I mean convert my portfolio into a pseudo-version of a core 4 portfolio with His Roth IRA being somewhat of a slice/dice in the US Funds area and coming in with Schwab's ETF for the International Fund, Schwab's ETF Reit, and Schwab's Aggregate Bond ETF for the other 3. I will definitely sell off any funds with ERs over .5 as one poster mentioned.

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in_reality
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Re: Help my portfolio is messy

Postby in_reality » Tue Mar 21, 2017 7:59 pm

Fiat lux wrote:
As I stew over whether or not to liquidate a majority of my roth iras and convert to a handful of funds i have swayed between doing that or doing some type of hybrid. By that, I mean convert my portfolio into a pseudo-version of a core 4 portfolio with His Roth IRA being somewhat of a slice/dice in the US Funds area and coming in with Schwab's ETF for the International Fund, Schwab's ETF Reit, and Schwab's Aggregate Bond ETF for the other 3. I will definitely sell off any funds with ERs over .5 as one poster mentioned.


Schwab actually uses 3 ETFs for International. I like it for the tax loss harvesting opportunities but you are in tax sheltered.

Anyway, to see what market cap weighting of them would be, you can look at this simple spreadsheet that pulls data from Morningstar. https://docs.google.com/spreadsheets/d/ ... =842559917

The ERs are a little higher, but I tend to use the fundamental versions for international. I figure US and international value (especially small) will be less correlated. For example, FNDF, FNDC and FNDE instead of SCHF, SCHC, and SCHE.
[60% US _ 26% DEV _ 14% EM] | (-16% LC _ +8% MC _ +8% SC) | [47% FND/VAL _ 40% MKT _ 7% MOM _ 6% REIT] | (+/- 5% or *25% rebalancing bands)

User avatar
Fiat lux
Posts: 51
Joined: Wed Feb 15, 2017 10:51 am

Re: Help my portfolio is messy

Postby Fiat lux » Wed Mar 22, 2017 1:03 pm

Are there any specific funds you would keep in a 401k vs Roth IRA?

I am opening my 401k for myself and employees next week with Employee Fiduciary. I have all the following below available. My thinking for now is to keep my wife and I's 401k simplified into the 3 fund style with the VTIAX, VBTLX, VTSAX.


Investment Fund ID Current Allocation % New Election %
Vanguard Total Intl Stk Idx Admiral VTIAX 28%
0
%
Vanguard Infla.Protected Sec Adm VAIPX 0%
0
%
Vanguard Total Bond Mk Index Adm VBTLX 34%
0
%
Vanguard 500 Idx Adm VFIAX 0%
0
%
Vanguard Total Stock Mrkt Idx Adm VTSAX 38%
0
%
Vanguard Growth Index Adm VIGAX 0%
0
%
Vanguard Value Idx Adm VVIAX 0%
0
%
Vanguard Ext. Market Idx Adm VEXAX 0%
0
%
Vanguard Federal Money Market VMFXX 0%
0
%
Vanguard Target Retirement Income VTINX 0%
0
%
Vanguard Target Retirement 2020 VTWNX 0%
0
%
Vanguard Target Retirement 2025 VTTVX 0%
0
%
Vanguard Target Retirement 2030 VTHRX 0%
0
%
Vanguard Target Retirement 2040 VFORX 0%
0
%
Vanguard Target Retirement 2055 VFFVX 0%
0
%
Vanguard Target Retirement 2015 VTXVX 0%
0
%
Vanguard Target Retirement 2035 VTTHX 0%
0
%
Vanguard Target Retirement 2045 VTIVX 0%
0
%
Vanguard Target Retirement 2050 VFIFX 0%
0
%
Vanguard Target Retirement 2060 VTTSX 0%
0
%
Vanguard Total Intl Bd Idx Admiral VTABX 0%
0
%
TOTAL

retiredjg
Posts: 29144
Joined: Thu Jan 10, 2008 12:56 pm

Re: Help my portfolio is messy

Postby retiredjg » Wed Mar 22, 2017 1:32 pm

Fiat lux wrote:Are there any specific funds you would keep in a 401k vs Roth IRA?

With those choices, it doesn't really matter what you keep where. Many people have a preference for putting stocks, instead of bonds, into Roth IRA. And it makes sense when all other things are equal (as in this case).

User avatar
Fiat lux
Posts: 51
Joined: Wed Feb 15, 2017 10:51 am

Re: Help my portfolio is messy

Postby Fiat lux » Sat Mar 25, 2017 4:14 pm

This weekend I sold off all the securities with ERs above .5. Great time to do it now with the market being on a high. Interesting to note, of all my securities the ones with the highest ERs showed the worst performance. I took a loss on a few.

I had a couple of random questions as I move through this process.

When doing AA do you use market value of the securities you own already or use the cost basis?

Should I balance all my accounts, ie Roths IRA, 401ks and taxable as one collective portfolio instead of balancing each on their own? I suspect the right way is the former. Hypothetically speaking, I could have all my REIT fund in my wife's IRA and none in my IRA so in effect her IRA is out of whack but on a collective whole our portfolio is properly balanced ? Is this correct thinking?

retiredjg
Posts: 29144
Joined: Thu Jan 10, 2008 12:56 pm

Re: Help my portfolio is messy

Postby retiredjg » Sat Mar 25, 2017 4:31 pm

Fiat lux wrote:When doing AA do you use market value of the securities you own already or use the cost basis?

Use the value on the day you are looking.

Should I balance all my accounts, ie Roths IRA, 401ks and taxable as one collective portfolio instead of balancing each on their own? I suspect the right way is the former. Hypothetically speaking, I could have all my REIT fund in my wife's IRA and none in my IRA so in effect her IRA is out of whack but on a collective whole our portfolio is properly balanced ? Is this correct thinking?

It often works out better this way and this is the suggested way of doing things (all other things being equal) but is certainly not mandatory.

MotoTrojan
Posts: 391
Joined: Wed Feb 01, 2017 8:39 pm

Re: Help my portfolio is messy

Postby MotoTrojan » Sat Mar 25, 2017 5:48 pm

retiredjg wrote:
Fiat lux wrote:When doing AA do you use market value of the securities you own already or use the cost basis?

Use the value on the day you are looking.

Should I balance all my accounts, ie Roths IRA, 401ks and taxable as one collective portfolio instead of balancing each on their own? I suspect the right way is the former. Hypothetically speaking, I could have all my REIT fund in my wife's IRA and none in my IRA so in effect her IRA is out of whack but on a collective whole our portfolio is properly balanced ? Is this correct thinking?

It often works out better this way and this is the suggested way of doing things (all other things being equal) but is certainly not mandatory.


I found this one-pot approach helpful for setting my goals up. Also read the Wiki on tax efficiency. I recommend making an AA and then feeding them into your funds based on tax efficiency, equity in Roth vs. bonds in tIRA, etc. Try to minimize how much your pot types influence the overall pot.

rabbitrun
Posts: 67
Joined: Wed Feb 15, 2017 8:54 pm

Re: Help my portfolio is messy

Postby rabbitrun » Sun Mar 26, 2017 7:57 am

Fiat lux wrote:This weekend I sold off all the securities with ERs above .5. Great time to do it now with the market being on a high. Interesting to note, of all my securities the ones with the highest ERs showed the worst performance. I took a loss on a few.


A key Boglehead principle is that the ER is the only reliable predictor of future mutual fund performance- more so than Morningstar ratings, past performance, expenses, turnover, managed tenure, net sales, asset size, alpha, beta, SD, and the Sharpe ratio. Above all else, cost matters. (Bogleheads guide pp. 116-117)


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