Portfolio Questions Juggling severalaccounts

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Fourandout
Posts: 7
Joined: Fri Oct 07, 2016 9:18 am

Portfolio Questions Juggling severalaccounts

Post by Fourandout » Fri Jan 12, 2018 5:53 pm

Emergency funds: have a reasonable amount
Debt: Just Home Mortgage, less than 100K.
Tax Filing Status: Married Filing Jointly
Tax Rate: 28% Federal, 5.75% State
State of Residence: North Carolina
Age: Both late 50’s
Desired Asset allocation: 60% stocks / 40% bonds
Desired International allocation: 25 - 30% of stocks
Current Portfolio: High/Mid 6 figures
Taxable – All Accounts are Tax Deferred

Current Investments.

Portfolio by Account

Her Traditional IRA 2
Name Category Value
Vanguard Total Bond Market Index Fund Admiral Shares Mutual Fund 5.80%
Vanguard Total International Bond Index Fund Investor Shares Mutual Fund 1.50%
Vanguard Wellington Fund Investor Shares Mutual Fund 2.40%

Her 401K
Name Category Value
STABLE VALUE FUND Bond 5.00%
Vanguard Extended Market Index Fund Institutional Plus Shares Mutual Fund 7.60%
Vanguard Institutional Index Fund Institutional Plus Shares Mutual Fund 5.00%
Vanguard Total International Stock Index Fund Institutional Plus Shares Mutual Fund 16.00%
Vanguard Inflation-Protected Securities Fund Institutional Shares Mutual Fund 1.10%
Vanguard Total Bond Market Index Fund Admiral Shares Mutual Fund 8.40%

Her Traditional IRA 2
Name Category Value
3M Co Stock 1.60%
Apple Inc Stock 1.30%
AT&T Inc Stock 0.30%
Bank of America Corp Stock 0.80%
Berkshire Hathaway Inc Stock 3.10%
Caterpillar Inc Stock 2.60%
Coca-Cola Co Stock 0.40%
Dominion Energy Inc Stock 1.80%
Highwoods Properties Inc Stock 2.80%
iShares 3-7 Year Treasury Bond ETF Stock 1.20%
McDonald's Corp Stock 1.40%
Merck & Co Inc Stock 1.20%
CASH Short Term Investment 1.30%
Procter & Gamble Co Stock 1.10%
SunTrust Banks Inc Stock 1.20%
Vanguard Target Retirement 2020 Fund Investor Shares Mutual Fund 0.60%
Vanguard Total International Bond Index Fund ETF Shares Stock 7.90%
Vanguard Wellesley® Income Fund Investor Shares Mutual Fund 0.60%

His Traditional IRA
Name Category Value
AT&T Inc Stock 0.80%
Chevron Corp Stock 0.60%
Coca-Cola Co Stock 1.00%
CASH Short Term Investment 1.00%
Johnson & Johnson Stock 1.60%
Merck & Co Inc Stock 1.00%
Vanguard Target Retirement 2020 Fund Investor Shares Mutual Fund 2.10%
Vanguard Total International Bond Index Fund ETF Shares Stock 0.40%

His 403B
Name Category Value
NORTH CAROLINA INTERNATIONAL FUND NCIFF Stock 0.10%
NORTH CAROLINA LARGE CAP CORE FUND NC Stock 0.40%
NORTH CAROLINA LARGE CAP INDEX FUND NCL Stock 0.20%
NORTH CAROLINA SMALLMID CAP INDEX FUND Stock 0.10%
Vanguard 500 Index Fund Admiral Shares Mutual Fund 0.10%
Vanguard Extended Market Index Fund Admiral Shares Mutual Fund 0.00%
Vanguard Total Bond Market Index Fund Admiral Shares Mutual Fund 0.10%
Vanguard Total International Stock Index Fund Admiral Shares Mutual Fund 0.10%

His Roth 1
Name Category Value
USAA Precious Metals and Minerals Fund Mutual Fund 0.70%

His Roth 2
Name Category Value
Vanguard Core Bond Fund Investor Shares Intermediate-Term Bond 1.20%
Vanguard Total International Bond Index Fund Investor Shares World Bond 0.70%
Vanguard Total International Stock Index Fund Admiral Shares Foreign Large Blend 2.20%
Vanguard Wellington Fund Investor Shares Allocation--50% to 70% Equity 1.60%


Annual Contributions: 60/40 allocated approximately like Table below:
Allocation by type
Allocation Percent
Short-term reserves 2.20%
Domestic bond funds 26.80%
International Bonds 11.00%
Large domestic stocks & stock funds 30.10%
Mid/small domestic stocks & stock funds 10.70%
International stocks & stock funds 19.20%
100.00%
Contributions
Her 401K - $9420, includes 100% match up to 5% we are maxing.
His 403B - $1200 No Match
His Roth - $3840
His Roth #2 - $600
Her Trad IRA - $3144


His 403B Options
Fund Expense Ratio
Vanguard Short-Term Bond Index Adm VBIRX 0.07%
Metropolitan West Total Return Bd Plan MWTSX 0.38%
Vanguard Total Bond Market Index Adm VBTLX 0.05%
PIMCO Inflation Response MultiAsst Instl PIRMX 1.06%
Vanguard Windsor II Admiral VWNAX 0.25%
Vanguard 500 Index Admiral VFIAX 0.04%
T. Rowe Price Blue Chip Growth I TBCIX 0.58%
Vanguard Extended Market Index Admiral VEXAX 0.08%
DFA US Small Cap I DFSTX 0.37%
Vanguard Total Intl Stock Index Admiral VTIAX 0.11%
MFS Instl International Equity MIEIX 0.71%

Her 401K Options
Investment Type Symbol Price
EQUITY/STOCK
BLACKROCK EQUITY DIVIDEND CF Core BEDTT $20.62
BLACKROCK US FDMTL LRG CL T Core BUFTT $22.25
DODGE & COX STOCK FUND Core DODGX $213.49
FIAM SMALL MID CAP CORE II FD Core PYSMT $21.56
MFS INTERNATIONAL GROWTH Core MIGFT $16.33
QS U.S. SM CAP EQUITY CIF Core HVVBT $10.65
STATE STREET REAL ASSET C Core SGACT $12.00
T ROWE INST LARGE-CAP GROWTH Core TRLGX $38.94
TEMPLETON INTL EQUITY CIT Core TMIET $10.65
VANGUARD INSTL 500 INDEX TRUST Core VGINT $110.04
VANGUARD INSTL EXTENDED MKT Core VGIET $107.25
VANGUARD INSTL TTL INTL STOCK Core VGIST $108.52
BAC COM STK FUND Core BACSF $10.40
BOND/FIXED INCOME
PIMCO TOTAL RETURN PORT. INSTL Core PTTRX $10.23
VANGUARD INFLATION-PROTECTED Core VIPIX $10.36
VANGUARD INSTL TTL BD MKT IND Core VGITT $99.91
WESTERN ASSET CORE BOND CL IS Core WACSX $12.62
MONEY MARKET/STABLE VALUE
STABLE VALUE FUND Core MLSVF $22.11
ALLOCATION FUNDS
BLACKROCK GLOBAL ALLOC I Core MALOX $20.29
LIFEPATH INDEX 2020 FUND O Core LOMMT $15.40
LIFEPATH INDEX 2025 FUND O Core LNMMT $16.28
LIFEPATH INDEX 2030 FUND O Core LQMMT $17.10
LIFEPATH INDEX 2035 FUND O Core LFMTT $17.90
LIFEPATH INDEX 2040 FUND O Core LBMTT $18.62
LIFEPATH INDEX 2045 FUND O Core LNJTT $19.21
LIFEPATH INDEX 2050 FUND O Core LBMIT $19.62
LIFEPATH INDEX 2055 FUND O Core LGHMT $20.29
LIFEPATH INDEX 2060 FUND O Core LKMMT $13.20
LIFEPATH INDEX RETIREMENT FD O Core LZMMT $14.30
PIMCO ALL ASSET FUND Core PAAIX $12.29


Things to Know:
1. The individual Equities listed above cannot be sold. One of us works for a firm that requires us to ask to buy or sell stocks. We were in the middle of creating a Dividend Growth portfolio when these rules were instated, and the answer has been “No” to every request buy or sell.
2. We have just gone through a review with Vanguard which was very good and made us feel comfortable that we will have enough savings along with pensions to retire at age 62 less than 5 years away. However, the only advice we received was put everything in there 4 main Index Funds. We can partially do that, but can do nothing about the large amount of money we have in the individual equities until we retire.
3. When the “Dividend Growth Plan” was stopped in mid stride, I became concerned that I did not have enough diversification. So, I stopped reinvesting the dividends and funneled the dividends into the Wellesley Income Fund and the Target 2020 fund. This helps me diversify my contributions throughout the year between stocks and bonds, while keeping a value orientation in equities (in the case of Wellesley).
Questions:
1. Is the portfolio so heavy in value positions to cause undue risk? Vanguard Portfolio analysis gives me a warning.
2. I feel like some actively managed funds are a good thing to have so I have active as well as indexed investments with Vanguard. Is this a reasonable plan?
3. Some articles I have read suggest that investors should increase cash savings in the 3-4 years before retirement as much as a third of the portfolio to guard against market crashes nearing retirement. Any thoughts on that? I do have access to Stable Value Funds and could increase contributions there.
4. We have worked hard to move to a 60/40 allocation working around the “Static Equities”, but this has created a somewhat complicated set of investments that I would like to simplify in the coming year. Any comments/suggestions appreciated.
Last edited by Fourandout on Fri Jan 12, 2018 10:28 pm, edited 2 times in total.

ICMoney
Posts: 160
Joined: Fri Oct 28, 2016 2:38 pm

Re: Portfolio Questions

Post by ICMoney » Fri Jan 12, 2018 7:59 pm

I didn't read through all of your holdings in detail, but some high-level questions - you were told you can't buy/sell individual stocks in your 401k and/or IRAs (?) - do I have that right? Do you have any idea why that might be? Do you have a company-provided financial advisor actively managing your account? If so, are you able to opt out of the advisor and invest the funds yourself? (i.e. if you opt out of the advisor, then you can buy/sell on your own without asking anyone for permission?)

Your current holdings are overwhelming to me at least, and by simplifying you can more clearly execute a strategy - right now there's overlap/duplication going on with so many holdings. Overall those on this board will likely tell you something similar to what Vanguard did - select passively managed, low-cost index funds to the asset allocation of your liking.

Best,
ICM

Fourandout
Posts: 7
Joined: Fri Oct 07, 2016 9:18 am

Re: Portfolio Questions

Post by Fourandout » Fri Jan 12, 2018 8:11 pm

One of us works in an area that requires all individual equitie transactions to be approved. We would have set up a blind trust to avoid it.

One of my problems has been keeping my allocations in line while not being able to change a large portion of it.

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Tyler Aspect
Posts: 974
Joined: Mon Mar 20, 2017 10:27 pm
Location: California
Contact:

Re: Portfolio Questions

Post by Tyler Aspect » Fri Jan 12, 2018 9:54 pm

Fourandout wrote:
Fri Jan 12, 2018 5:53 pm
Emergency funds: have a reasonable amount
Debt: Just Home Mortgage, less than 100K.
Tax Filing Status: Married Filing Jointly
Tax Rate: 28% Federal, 5.75% State
State of Residence: North Carolina
Age: Both late 50’s
Desired Asset allocation: 60% stocks / 40% bonds
Desired International allocation: 25 - 30% of stocks
Current Portfolio: High/Mid 6 figures
Taxable – All Accounts are Tax Deferred

Welcome to Bogleheads. Complicated portfolio.
Current Investments.

Portfolio by Account

Note: This is from a Vanguard Portfolio Analysis Report broken down by investment type. Funds representing more than one type are repeated.

Percent Investment Name Ticker ER Invest Type
Her 401K (44.1% asset)
5% Vanguard Infla-Protected Sec Inst (VIPIX)
10% Vanguard Total Bond Mkt Index Adm (VBTLX)
15% Vanguard Tot Intl Stock Ix Inst Pl (VTPSX)
24.1% Vanguard Inst Index Fund Inst Plus (VIIIX)


Her Traditional IRA Brokerage
9.9% Vanguard Tot Intl Bond ETF (BNDX)
2.1% Vanguard Total Stock Market ETF (VTI)
(19.2% untouchable individual US stocks)
1.60% 3M Co MMM Large dom stocks
1.30% Apple Inc AAPL Large dom stocks
0.30% AT&T Inc T Large dom stocks
0.70% Bank of America Corp BAC Large dom stocks
2.80% Berkshire Hathaway Inc BRKB Large dom stocks
2.20% Caterpillar Inc CAT Large dom stocks
0.40% Coca-Cola Co KO Large dom stocks
2.00% Dominion Energy Inc D Large dom stocks
1.40% McDonald's Corp MCD Large dom stocks
1.20% Merck & Co Inc MRK Large dom stocks
1.10% Procter & Gamble Co PG Large dom stocks
1.10% SunTrust Banks Inc STI Large dom stocks
3.10% Highwoods Properties Inc HIW M/Sm dom stocks


Her Traditional IRA Vanguard
10% Vanguard Total Bond Mkt Index Adm (VBTLX)

His 403B
1.1% Vanguard 500 Index Fund Adm (VFIAX)

His Roth IRA #2
0.60% USAA Precious Metals and Minerals Fund (90%) USAGX 1.22 Intl stocks
0.10% USAA Precious Metals and Minerals Fund (10%) USAGX 1.22 M/Sm dom stocks

His Roth IRA Vanguard
5.4% Vanguard Total Intl Stock Admiral (VTIAX)

His Traditional IRA Brokerage

3.6% Vanguard Total Bond Market ETF (BND)
(untouchable individual US stock 4.9%)
0.70% AT&T Inc T Large dom stocks
0.60% Chevron Corp CVX Large dom stocks
1.00% Coca-Cola Co KO Large dom stocks
1.60% Johnson & Johnson JNJ Large dom stocks
1.00% Merck & Co Inc MRK Large dom stocks

100.00%

Annual Contributions: 60/40 allocated approximately like Table below:
Allocation by type
Allocation Percent
Short-term reserves 2.20%
Domestic bond funds 26.80%
International Bonds 11.00%
Large domestic stocks & stock funds 30.10%
Mid/small domestic stocks & stock funds 10.70%
International stocks & stock funds 19.20%
100.00%
Contributions
Her 401K - $9420, includes 100% match up to 5% we are maxing.
His 403B - $1200 No Match
His Roth - $3840
His Roth #2 - $600
Her Trad IRA - $3144

Questions:
1. Is the portfolio so heavy in value positions to cause undue risk? Vanguard Portfolio analysis gives me a warning.
You can fix it at her next job change.

2. I feel like some actively managed funds are a good thing to have so I have active as well as indexed investments with Vanguard. Is this a reasonable plan?
I do not do any active at all.

3. Some articles I have read suggest that investors should increase cash savings in the 3-4 years before retirement as much as a third of the portfolio to guard against market crashes nearing retirement. Any thoughts on that? I do have access to Stable Value Funds and could increase contributions there.
I do not hold cash outside the emergency cash.
Past result does not predict future performance. Mentioned investments may lose money. Contents are presented "AS IS" and any implied suitability for a particular purpose are disclaimed.

Fourandout
Posts: 7
Joined: Fri Oct 07, 2016 9:18 am

Re: Portfolio Questions Juggling severalaccounts

Post by Fourandout » Fri Jan 12, 2018 10:33 pm

Thanks Tyler. This is her last job, Cash is being reinvested into indexes as it builds from Dividends. :happy

Question? Would you reinvest dividends into "Untouchable" equities? I am currently not reinvesting , but using the Dividends to diversify with the Target funds and Wellsley.

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Tyler Aspect
Posts: 974
Joined: Mon Mar 20, 2017 10:27 pm
Location: California
Contact:

Re: Portfolio Questions Juggling severalaccounts

Post by Tyler Aspect » Fri Jan 12, 2018 10:55 pm

Fourandout wrote:
Fri Jan 12, 2018 10:33 pm
Thanks Tyler. This is her last job, Cash is being reinvested into indexes as it builds from Dividends. :happy

Question? Would you reinvest dividends into "Untouchable" equities? I am currently not reinvesting , but using the Dividends to diversify with the Target funds and Wellsley.
No, you want as little individual stocks as possible. Reinvest dividends into VTI or BND in the brokerage account. When she retires, then you can sell the individual stocks to exchange into VTI.
Past result does not predict future performance. Mentioned investments may lose money. Contents are presented "AS IS" and any implied suitability for a particular purpose are disclaimed.

livesoft
Posts: 60153
Joined: Thu Mar 01, 2007 8:00 pm

Re: Portfolio Questions Juggling severalaccounts

Post by livesoft » Sat Jan 13, 2018 5:42 am

This is probably one of the most complicated portfolio presentations that I have ever seen at bogleheads.org. I see it is mostly because you listed the stocks individually and you cannot change them. I guess you are to be commended for putting it all out there for us to read, but I didn't read it. My eyes glazed over. That said, I will answer your questions anyways.
Fourandout wrote:
Fri Jan 12, 2018 5:53 pm
Questions:
1. Is the portfolio so heavy in value positions to cause undue risk? Vanguard Portfolio analysis gives me a warning.
A warning? Or an alert?
Image
The Portfolio Watch tool explains alerts in a link found on the Summary tab:
Image
What is the sum of the value column of a morningstar.com X-ray 9-box style grid? If 40 or below, then I wouldn't worry.

2. I feel like some actively managed funds are a good thing to have so I have active as well as indexed investments with Vanguard. Is this a reasonable plan?
No, I don't think this is reasonable.

3. Some articles I have read suggest that investors should increase cash savings in the 3-4 years before retirement as much as a third of the portfolio to guard against market crashes nearing retirement. Any thoughts on that? I do have access to Stable Value Funds and could increase contributions there.
I hate cash and I don't think there is any reason to have any. One can use bond funds for rebalancing. If the stable value fund has a higher yield than a decent bond fund, then it is OK.

4. We have worked hard to move to a 60/40 allocation working around the “Static Equities”, but this has created a somewhat complicated set of investments that I would like to simplify in the coming year. Any comments/suggestions appreciated.
Try to have one fund per account except the largest tax-advantaged account. Use that largest account to hold one of each asset class and for rebalancing.
If you put ONLY the individual stocks into a Morningstar instant X-ray, what does the 9-box style grid look like? That is, what kind of mutual fund have you created? Also, are they all US companies?
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Fourandout
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Joined: Fri Oct 07, 2016 9:18 am

Re: Portfolio Questions Juggling severalaccounts

Post by Fourandout » Sat Jan 13, 2018 6:45 am

Thanks, It is an Alert about Investment style emphasizing Value , followed by a caution that states since I holdings "have significant holdings in individual stocks and sector funds ... be cautious about changing investments based on only style". Vanguard shows:
Value - 29%,
Blend - 69%
Growth - 2.5%

All Individual stocks are US companies.

livesoft
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Re: Portfolio Questions Juggling severalaccounts

Post by livesoft » Sat Jan 13, 2018 6:56 am

Portfolio Watch cannot get the value thing correct, so you have to use morningstar.com. Plus the Vg Port Watch looks ONLY at US stock and stock mutual fund holdings and ignores the foreign and international ones.

FWIW, our portfolio shows 35.3% value and 0% growth (US stock mutual funds).
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Fourandout
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Re: Portfolio Questions Juggling severalaccounts

Post by Fourandout » Sat Jan 13, 2018 7:00 am

Thanks I will look at morning star.

Fourandout
Posts: 7
Joined: Fri Oct 07, 2016 9:18 am

Re: Portfolio Questions Juggling severalaccounts

Post by Fourandout » Sat Jan 13, 2018 7:04 am

:oops: I regret having used such a complicated report to list our portfolio and have modified the original post to list each account Funds, Equities and percents only. Thanks for those who responded so far. :sharebeer

livesoft
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Re: Portfolio Questions Juggling severalaccounts

Post by livesoft » Sat Jan 13, 2018 7:32 am

Are you limited in your contributions to Roth IRAs because of your very high income? I would guess that both of you would contribute the same high amount to your Roth IRAs each year. Why are the 401(k) and 403(b) contributions below the maximums allowed? Is her traditional IRA contribution for a backdoor Roth? I just don't understand those annual contribution numbers at all.
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Fourandout
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Joined: Fri Oct 07, 2016 9:18 am

Re: Portfolio Questions Juggling severalaccounts

Post by Fourandout » Sat Jan 13, 2018 8:26 am

Most contributions go to her 401k because it has a 100% match up to 5%. His 403/401 has no match and until recently had really bad options. Hince the Vanguard accounts. The contributions are set up to properly diversify while taking into account the large equity position that can’t be changed.

That’s the best explanation I can give.

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