Fixing 20 Years of Mistakes

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pnwlazy
Posts: 2
Joined: Fri May 19, 2017 9:37 am

Fixing 20 Years of Mistakes

Postby pnwlazy » Fri May 19, 2017 10:18 am

20 Years ago, my idea of "investing" was opening up the Kiplinger magazine and buying the stocks/funds that they predicted would be "the best". I also listened to the one piece of advice Buffet would always give "Buy and Hold". My initial investments were made by offsetting taxes via Traditional IRA funding. I let most of those initial investments sit ( until this very day ), and I would randomly "emotionally" buy stocks along the way ( most of which I would lose money on ).

Fast forward to today - Just had a baby, just setup a new Hedgeable IRA (2017) account, just setup a new Wealthfront IRA (2016) account, just setup a new 529 account within the wealthfront account for baby. Hedgeable is doing well - up 6.1% . Wealthfront is doing poorly - up 1.41% . Feel like these are just more mistakes in a long line of mistakes.

I would greatly prefer to "Set it and forget it" with a lazy portfolio - but which one? The 3 fund looks most appealing ( but, more emotional second guessing - would one of the other lazy portfolios work out better...? ) Do I liquidate all of my 20 years of mistakes and move into the 3 vanguard funds? Do I go with their etf version? admiral fund version? Do I move more into Hedgeable since it's doing the best of my 3 accounts ( albeit only a 2-3 month performance at this point ).

I do have at least 3k in short term capital loss to offset some of the long term gains, a majority of my money is in IRA accounts, about 20-30% in taxable accounts.

I would just bury my head in the sand and try to "ignore" all my mistakes like I have for so long now - but with a new baby, I need a more meaningful plan!

Sorry for the new mistake of not including enough/proper info - I have added here :

Emergency funds: 7 Months of Expense
Debt: $4000 School Loans, $8000 credit card
Tax Filing Status: MFJ with 1 dependent
Tax Rate: 13% Federal, Unknown% State
State of Residence: Oregon
Age: 35
Desired Asset allocation: 3 or 4 fund lazy portfolio
Desired International allocation: 3 or 4 fund lazy portfolio

Current retirement assets

Taxable :

Apx 11% broken down as follows :

BAC x 101 shares +$832 cap gains
C x 3 shares +$43 cap gains
FMSA x 50 shares -$374 cap loss
KKR x 13 shares -$57 cap loss
LVLT x 3 shares +$304 cap gains
ORCL x 104 shares +$2200 cap gains
TSEM x 7 shares +$176 cap gains
UN x 21 shares +$610 cap gains
WFC x 21 shares +$54 cap gains
XRX x 50 shares -$80 cap loss

I list cap gain/loss because of the need to liquidate these to convert to 3 or 4 fund lazy portfolio

My Traditional IRA(s) : No Company match
1.45% JETAX 1.50% ER
4.00% MSILX 1.29% ER
4.80% MINDX 1.19% ER
5.11% OAKMX 0.93% ER
3.71% TBGVX 1.38% ER
3.32% PKSAX 1.37% ER
17.28% VHT 0.10% ER
5.42% AAPL
8.30% BAC
1.17% CSCO
4.74% C
3.59% FMSA
18.53% NOC

Her Traditional IRA : No Company match
91.7% VASGX 0.15% ER
3.29% BAC
4.69% USB



Contributions

New monthly Contributions
$100 her 401k ( no match)
$50 baby's 529

New yearly contributions
$5500 My Traditional IRA

( My formatting is a tiny bit different since the goal is to liquidate most/all of the taxable funds and get on a short/long term plan for a lazy portfolio )
Last edited by pnwlazy on Fri May 19, 2017 12:37 pm, edited 1 time in total.

bloom2708
Posts: 1941
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Location: Fargo, ND

Re: Fixing 20 Years of Mistakes

Postby bloom2708 » Fri May 19, 2017 11:33 am

Welcome.

We probably don't have enough information to help. What do your investments look like now?

This is the recommended format for posting:

viewtopic.php?t=6212

No idea what "Hedgable" is. It doesn't sound good. Maybe start with Vanguard or Fidelity and consider (once you do some reading/learning) consolidating to a single, low cost, DIY firm.

Looking at any short term window and saying you are up 6% or 1.4% doesn't really help much.

https://www.bogleheads.org/wiki/Boglehe ... philosophy

Watch the videos, study the philosophy, read the books in the recommended list. The 3 fund portfolio is an excellent way to invest. There are ways to tweak things as you learn/grow.

You are in the right place to learn and ask questions. Go slow and read threads on topics that interest you.

Welcome!
"We are here not to please but to provoke thoughtfulness" Unknown Boglehead | | Want to buy something? Watch this first: https://vimeo.com/41152287

bigred77
Posts: 1495
Joined: Sat Jun 11, 2011 4:53 pm

Re: Fixing 20 Years of Mistakes

Postby bigred77 » Fri May 19, 2017 11:51 am

I think target date retirement funds were created just for you.

If the majority of your investments are in retirement accounts and 529s. You can liquidate everything and move it to target date funds with no tax penalties.

Fallible
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Joined: Fri Nov 27, 2009 4:44 pm
Contact:

Re: Fixing 20 Years of Mistakes

Postby Fallible » Fri May 19, 2017 12:19 pm

Welcome to the forum.

I agree with bloom2708 that we need to know more about your finances via the link provided.

Overall, I think the big challenge for you will be transitioning from years of short-term thinking to long term. Every paragraph of your post shows a desire to think long term, but then the short term comes back as, for example, you worry about current prices. Fortunately, you've come to the right place for help with that transition. :beer
Bogleheads® wiki | Investing Advice Inspired by Jack Bogle

pnwlazy
Posts: 2
Joined: Fri May 19, 2017 9:37 am

Re: Fixing 20 Years of Mistakes

Postby pnwlazy » Fri May 19, 2017 12:54 pm

bloom2708 wrote:Welcome.

We probably don't have enough information to help. What do your investments look like now?

This is the recommended format for posting:

viewtopic.php?t=6212


Sorry about the newbie mistake, I have updated the post. I know the %'s won't come out to exactly 100% because I listed our IRA's seperately, and rounded cents on holdings.

bloom2708 wrote:No idea what "Hedgable" is. It doesn't sound good. Maybe start with Vanguard or Fidelity and consider (once you do some reading/learning) consolidating to a single, low cost, DIY firm.


http://www.hedgeable.com - a robo advisor


bloom2708 wrote:Looking at any short term window and saying you are up 6% or 1.4% doesn't really help much.

https://www.bogleheads.org/wiki/Boglehe ... philosophy

Watch the videos, study the philosophy, read the books in the recommended list. The 3 fund portfolio is an excellent way to invest. There are ways to tweak things as you learn/grow.

You are in the right place to learn and ask questions. Go slow and read threads on topics that interest you.

Welcome!


True, short term = emotion = timing market = bad -- Exactly what I am trying to get away from!

Thank you, I will continue to read more, learn more - this is actually part of my problem - the more I read, the more "emotional" I get and the more I question myself, the choices, etc. i.e.: can't even decide between 3 fund 4 fund lazy portfolio, etc.

bloom2708
Posts: 1941
Joined: Wed Apr 02, 2014 2:08 pm
Location: Fargo, ND

Re: Fixing 20 Years of Mistakes

Postby bloom2708 » Fri May 19, 2017 1:03 pm

If in doubt, choose the simpler path. 3 fund is fine because International Bonds do not add anything "new". Bonds are for safety and reducing risk. International bonds don't add much to the formula. That is my take.

Start with three: Total US, Total International, Total US Bond

Read away and take the emotion out.
"We are here not to please but to provoke thoughtfulness" Unknown Boglehead | | Want to buy something? Watch this first: https://vimeo.com/41152287

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BL
Posts: 6786
Joined: Sun Mar 01, 2009 2:28 pm

Re: Fixing 20 Years of Mistakes

Postby BL » Fri May 19, 2017 1:26 pm

Good advice so far.
Here is a quick 16 page pdf to get you started:
https://www.etf.com/docs/IfYouCan.pdf

When you say IRAs, is that 401k, or on the job IRA, or what?
I like a balanced fund like VASGX, and total stock market in taxable.

I see debts that are important:
Credit Card
student loans
What are rates? Are you paying extra to pay them off? Anything 5% or higher needs to be tackled immediately. That is a better pay-off than investing. Nice to think about baby but you can't borrow for retirement like they can for college.

Are you still using the CC that you don't pay off monthly? That means you are being charged interest on each purchase. Stop!

There is no 13% tax bracket. So it may be 15 or 25% perhaps. What is your income?
Last edited by BL on Fri May 19, 2017 1:31 pm, edited 1 time in total.

aristotelian
Posts: 1606
Joined: Wed Jan 11, 2017 8:05 pm

Re: Fixing 20 Years of Mistakes

Postby aristotelian » Fri May 19, 2017 1:26 pm

Looks like you could pay taxes on the gains without too much trouble. I would liquidate and set and forget. However, I would pay that credit card debt with some of the proceeds.

Also, based on the information you have provided, it sounds like you might be a little behind in your saving/investing. I would worry about yourself for now--do not focus on the 529 as your baby has a much longer time horizon than you do.

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htdrag11
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Joined: Wed Nov 02, 2011 9:22 pm

Re: Fixing 20 Years of Mistakes

Postby htdrag11 » Fri May 19, 2017 1:42 pm

OP,

If you really want to be lazy, then put it all in one fund, such as Vanguard Wellington Admiral, or Balanced Index, or a Target Date fund.

For my family, I told then when I kick the bucket, they could just continue to consolidate all other funds into Wellington since they could afford the risk. The fund has a mixture of US, international and fixed income.

YMMV.

BTW, you're way ahead of me. I did not learn my lesson until I was in my early 60's. 1987 and 2008 were very painful lessons learned.

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Taz
Posts: 261
Joined: Tue Jan 13, 2009 9:10 am
Location: Florida

Re: Fixing 20 Years of Mistakes

Postby Taz » Fri May 19, 2017 3:57 pm

pnwlazy wrote:
bloom2708 wrote:No idea what "Hedgable" is. It doesn't sound good. Maybe start with Vanguard or Fidelity and consider (once you do some reading/learning) consolidating to a single, low cost, DIY firm.


http://www.hedgeable.com - a robo advisor



Concur with bloom2708. Hedgeable will charge you 0.75% on an account less than $50k, dropping 0.05% per $50k in the account to 0.30 at $1 mil. That does not include the underlying fund/ETF expenses.

I clicked through and read through about half of the web site. It is full of fancy infomatics and buzz words. It made the point that a 3-4 fund MPT portfolio is "old and busted" while their system is the "new hotness" (those are my words - well actually stolen from Men in Black II). The questionnaire asked me if I wanted to invest in Bitcoins. I though that was strange for a low-moderate risk portfolio which I said was 6-10 years from retirement.

My personal impression is that it will generate an overly complicated portfolio with 10-15+ stocks/funds/ETFs re-balancing 12-48 times a year. It relies on extensive modeling and computer portfolio "optimization" through extensive back testing and reacting to the market. Here is a link to one of their white papers on portfolio construction. ( https://www.hedgeable.com/hedgeable-cor ... hite-paper )

There have been other threads about the company on the forum such as: viewtopic.php?t=198426 where folks smarter than I offered measured consideration.
The destination matters.


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