A slice and dice question

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tennisplyr
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A slice and dice question

Post by tennisplyr » Sun Jun 18, 2017 6:36 pm

I'm a slice and dice investor with roughly 15-20 funds across Vanguard and Fidelity. Before everyone starts screaming at me, I know there are a lot of you out there like me. I'm reluctant to start wholesale simplifying things largely for fear of tax implications. My AA is fine as are my diversification and fee issues. Are there really major compelling things that I'm missing? I'm retired and in my midsixties and have no problem 'staying the course.' Thanks.
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livesoft
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Re: A slice and dice question

Post by livesoft » Sun Jun 18, 2017 6:39 pm

I don't see any need to do "wholesale" simplification, but I would suggest that any time you wish to sell some shares that you consider if the act will make your portfolio more simple or more complex and strive to choose the act that will result in simplification. Same goes for dividend reinvestment and other purchases.
Last edited by livesoft on Mon Jun 19, 2017 5:29 am, edited 1 time in total.
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delamer
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Re: A slice and dice question

Post by delamer » Sun Jun 18, 2017 6:56 pm

If your spouse is not knowledgable enough or has no wish to manage the portfolio as is, then that would be a compelling reason to simplify.

It also may be that your interest in and ability to manage your portfolio will decline as you age.

We have more funds than I'd like right now because of the need to balance out the best options in my spouse's 401(k) which has about one-half of our retirement assets. But that is a temporary/involuntary situation.

heyyou
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Re: A slice and dice question

Post by heyyou » Mon Jun 19, 2017 12:56 am

If one of the 9 squares on your M* Xray is 10% off target for a few years, I doubt that is going to change the longevity of your portfolio. To me, that flexibility is a feature, not a problem.

Trev H's Ultimate Buy and Hold (UB&H) is a four fund slice and dice (equal sized VG domestic LB and SmV, foreign LV and Int'l Sm Blend). Note the missing domestic and foreign funds, but the portfolio has performed just fine without them. Thus you can sell out of some of your holdings as long as you keep enough factor exposure in the remaining portfolio. The lack of a VG foreign SmV fund determines the other fund choices. I wonder if the rebalancing is the key to the long term performance of the UB&H. He did mention that the US SmV and the foreign SB were the most often rebalanced due to their distinct lack of correlation.

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SGM
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Re: A slice and dice question

Post by SGM » Mon Jun 19, 2017 4:19 am

I only sell small amounts yearly in taxable accounts in our effort to simplify. We are limited in the effort due to taxation issues. We do not reinvest dividends any longer but transfer them into checking accounts. Taxes cannot be ignored so we have to live with the additional complexity of multiple investment vehicles.

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Earl Lemongrab
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Re: A slice and dice question

Post by Earl Lemongrab » Mon Jun 19, 2017 5:36 pm

What is the reason for this "simplification"? Are you having trouble managing? You shouldn't do it because people here tell you to.

Across all my accounts, including banks accounts and the cash funds in brokerage accounts (some of which are small basically inactive accounts), I have something like 45 separate holdings. That doesn't bother me. I have them all recorded and tracked on a single spreadsheet. Once a month, in normal circumstances, I spend about 20-30 minutes updating the holdings. If I have transferred for a nice cash bonus, I might need to spend a little more time that month. But not much.
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jebmke
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Re: A slice and dice question

Post by jebmke » Mon Jun 19, 2017 5:51 pm

delamer wrote:If your spouse is not knowledgable enough or has no wish to manage the portfolio as is, then that would be a compelling reason to simplify.

It also may be that your interest in and ability to manage your portfolio will decline as you age.

We have more funds than I'd like right now because of the need to balance out the best options in my spouse's 401(k) which has about one-half of our retirement assets. But that is a temporary/involuntary situation.
This is exactly where I stood when I planned my ER. I decided to simplify opportunistically. The downtick in 2008-09 was a window that allowed me to consolidate a lot and take some losses. I have also used our DAF to absorb some remnants that would otherwise trigger taxes.
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staythecourse
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Re: A slice and dice question

Post by staythecourse » Mon Jun 19, 2017 7:34 pm

jebmke wrote:
delamer wrote:If your spouse is not knowledgable enough or has no wish to manage the portfolio as is, then that would be a compelling reason to simplify.

It also may be that your interest in and ability to manage your portfolio will decline as you age.

We have more funds than I'd like right now because of the need to balance out the best options in my spouse's 401(k) which has about one-half of our retirement assets. But that is a temporary/involuntary situation.
This is exactly where I stood when I planned my ER. I decided to simplify opportunistically. The downtick in 2008-09 was a window that allowed me to consolidate a lot and take some losses. I have also used our DAF to absorb some remnants that would otherwise trigger taxes.
+3.

The ONLY reason I can see to simplify is for a spouse who is not interested and/ or knowing eventually your own mental faculties will start slowing. Of course, the protection against that is to have good fee only adviser lined up that understands what you are trying to accomplish so you can utilize them when it comes.

Good luk.
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Vanguard Fan 1367
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Re: A slice and dice question

Post by Vanguard Fan 1367 » Tue Jun 20, 2017 6:53 am

You sound like me. I have a similar amount of accounts mostly at Fidelity and Vanguard. After becoming a Boglehead I got rid of all my Fidelity funds and stocks except for FSTVX. I am super pleased at that move, the last year and a half have been great for index investing.

I have some Vanguard REIT, Vanguard Small Cap Index, and other Vanguard Funds. The wife would like me to keep them so I am keeping the diversity for now. In this bull market I would pay some taxes also to simplify my taxable accounts. I am holding off on doing that and I think it is a good idea not to simplify if you would have to pay taxes to do so.

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tennisplyr
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Re: A slice and dice question

Post by tennisplyr » Tue Jun 20, 2017 7:27 am

Thanks all. I think I'm going to simplify opportunistically in the short term and largely in my tax-advantaged accounts. Also need to bring my DW more into the fold.
Those who move forward with a happy spirit will find that things always work out.

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