Portfolio Review/Advice

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
scottrj12
Posts: 12
Joined: Thu Jan 18, 2018 12:06 pm

Portfolio Review/Advice

Post by scottrj12 »

Hi Bogleheads,

I was hoping to solicit some portfolio advice. I feel like my allocations are all over the place, and I’m paralyzed by over analysis right now. Hoping for some advice and a nudge in the right direction.

- Emergency Funds: $100k (high yield savings at 1.5%) This money is intended for a home purchase in CA in 2018, but coastal city real estate prices are insane and I’m having heartburn about possibly overpaying at the top of the market.
- Debt: Car loan $5k (1.89%)
- Tax Filing: Single
- Tax Rate: 28% / 9.3%
- State of Residence: CA
- Age: 36
- Desired Asset Allocation: 85% stocks / 15% bonds
- Desired International allocation: 40% of stocks

Current Portfolio

Taxable Vanguard Account:
- 3.83%: 500 Index (VFIAX)
- 3.35%: Value Index (VVIAX)
- 3.35%: Small-Cap Value Index (VSIAX)
- 3.35%: International Value (VTRIX)

Vanguard Roth IRA
- 7.52%: Wellington Fund (VWELX)
- 3.68%: REIT Index (VGSLX)

Vanguard IRA
- I only use it to funnel funds into my Roth via the backdoor. I cannot deduct contribution so this account remains $0 all year.

Vanguard IRA (Inherited) – 2018 is the first year I will take the RMD. I plan to put these RMDs into my taxable account. I’m on the stretch distribution plan.
- REIT Index (VGSLX): 3.07%
- Total Bond Market (VBTLX): 3.2%
- Total International (VTIAX): 7.16%
- Total Stock Market (VTSAX): 9.7%

401k (company match)
- T. Rowe Price Equity Index 500 (PREIX): 14.49%
- JP Morgan Large Cap Growth (SEEGX): 16.31%
- Dreyfus Midcap (PESPX): 7.19%
- iShares MSCI EAFE Intl Idx (MDIIX): 7.19%
- Core Plus Bond / PIMCO Fund: 6.60%

Contributions

New Annual Contributions
- $18k into 401k ($5k employer match)
- $5,500 into Roth (via backdoor)
- I’m unsure how much to put into my taxable account given the froth in today’s market. I’m considering to keep building cash reserve for home purchase and/or deploy into the market if there’s a big correction.

Available Funds in 401k:

- JP Morgan Large Cap Growth (SEEGX): 0.85%
- American Funds EuroPacific Growth Fund R4 (RERCX): 0.85%
- Invesco Small Cap Growth Fund Y (GTSYX): 0.98%
- iShares MSCI EAFE Intl Idx Inv A (MDIIX): 0.38%
- MassMutual Select Mid Cap Growth Adm (MMELX): 1.03%
- T. Rowe Price Equity Index 500 (PREIX): 0.23%
- Columbia Contrarian Core A (LCCAX): 1.06%
- S/A Janus Balanced Strategy: 1.06%
- Dreyfus Midcap Index Fund (PESPX): 0.51%
- Invesco Growth & Income Fund A (ACGIX): 0.82%
- Janus Henderson Small Cap Value T (JSCVX): 1.13%
- Diamond Hill Small-Mid Cap (DHMAX): 1.24%
- Core Plus Bond / PIMCO Fund: 0.63%
- Nuveen Real Estate Secs A (FREAX): 1.30%
- iShares US Aggregate Bond Index Inv. A (BMOAX): 0.35%
- Guaranteed Income Fund (GIF): 0.25%

Questions:
- Are the funds I selected for each of my accounts appropriate from a tax efficiency perspective?

- I’m a little light in my international exposure given my desired allocation. Would it make sense to beef up my international positions in my Roth, Taxable Account, or 401k?

- I’m basically looking for an overall review of my portfolio, and perhaps some suggestions on how I should, if needed, rebalance to a more appropriate allocation. I’d like to be on the aggressive side, since I still plan on working another 30 or so years.

Thank you very much in advance!
User avatar
Tyler Aspect
Posts: 1620
Joined: Mon Mar 20, 2017 10:27 pm
Location: California
Contact:

Re: Portfolio Review/Advice

Post by Tyler Aspect »

scottrj12 wrote: Mon Jan 22, 2018 6:45 pm Hi Bogleheads,

I was hoping to solicit some portfolio advice. I feel like my allocations are all over the place, and I’m paralyzed by over analysis right now. Hoping for some advice and a nudge in the right direction.

Welcome to Bogleheads.

- Emergency Funds: $100k (high yield savings at 1.5%) This money is intended for a home purchase in CA in 2018, but coastal city real estate prices are insane and I’m having heartburn about possibly overpaying at the top of the market.

- Debt: Car loan $5k (1.89%)
- Tax Filing: Single
- Tax Rate: 28% / 9.3%
- State of Residence: CA
- Age: 36
- Desired Asset Allocation: 85% stocks / 15% bonds
- Desired International allocation: 40% of stocks

Current Portfolio

Taxable Vanguard Account:
- 3.83%: 500 Index (VFIAX) Exchange to Total Stock Market (VTSAX)
- 3.35%: Value Index (VVIAX)
- 3.35%: Small-Cap Value Index (VSIAX)
- 3.35%: International Value (VTRIX)

Vanguard Roth IRA
- 7.52%: Wellington Fund (VWELX) Exchange to Total International (VTIAX)
- 3.68%: REIT Index (VGSLX)

Vanguard IRA
- I only use it to funnel funds into my Roth via the backdoor. I cannot deduct contribution so this account remains $0 all year.

Vanguard IRA (Inherited) – 2018 is the first year I will take the RMD. I plan to put these RMDs into my taxable account. I’m on the stretch distribution plan.
3.07% REIT Index (VGSLX)
10.03% Vanguard Total International (VTIAX)
10.03% Vanguard Extended Market Index (VEXAX)


401k (company match)
15% iShares US Aggregate Bond Index Inv. A (BMOAX)
36.78% T. Rowe Price Equity Index 500 (PREIX)
Your least expensive options in the 401k accounts are these two funds.


Contributions

New Annual Contributions
- $18k into 401k ($5k employer match)
- $5,500 into Roth (via backdoor)
- I’m unsure how much to put into my taxable account given the froth in today’s market. I’m considering to keep building cash reserve for home purchase and/or deploy into the market if there’s a big correction.
New taxable contribution goes to Total Stock Market (VTSAX) or house fund.
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.
TwstdSista
Posts: 1408
Joined: Thu Nov 16, 2017 3:03 am

Re: Portfolio Review/Advice

Post by TwstdSista »

Tyler's suggestions are very similar to where my brain was going while reading your post. Exchanging VFIAX for VTSAX in taxable will have tax consequences, so just be aware of that if you decide to do that.

Your portfolio seems quite good. But the small percentages re: REIT, Value, EM, and SC seem not worth the effort to track. (just my opinion, I stick with the 3 fund portfolio because I'm like to keep things simple). If you truly want those tilts then just own them and make then 5-10% of your portfolio. Or pick just one or two that you truly like.
User avatar
Duckie
Posts: 9777
Joined: Thu Mar 08, 2007 1:55 pm

Re: Portfolio Review/Advice

Post by Duckie »

scottrj12 wrote:- Age: 36
- Desired Asset Allocation: 85% stocks / 15% bonds
15% bonds is very aggressive for your age.
Available Funds in 401k:
The best options are:
  • T. Rowe Price Equity Index 500 (PREIX) 0.23% -- Large caps, 80% of US stocks
  • iShares MSCI EAFE Intl Idx Inv A (MDIIX) 0.38% -- Developed markets, 75% of international stocks
  • iShares US Aggregate Bond Index (BMOAX) 0.35% -- US bonds
Are the funds I selected for each of my accounts appropriate from a tax efficiency perspective?
Since in general it's better to have assets with lower expected growth (bonds) in pre-tax accounts and assets with higher expected growth (stocks) in Roth accounts, I would remove Wellington from the Roth IRA. It really doesn't belong in your portfolio at all because it's a balanced fund and all the other funds are individual funds.
I’m a little light in my international exposure given my desired allocation. Would it make sense to beef up my international positions in my Roth, Taxable Account, or 401k?
Not the 401k if you can avoid it. The best international option in that account is limited. Use either taxable or your IRAs.
I’m basically looking for an overall review of my portfolio, and perhaps some suggestions on how I should, if needed, rebalance to a more appropriate allocation. I’d like to be on the aggressive side, since I still plan on working another 30 or so years.
You have a desired AA of 85% stocks, 15% bonds, with 40% of stocks in international. That breaks down to 51% US stocks, 34% international stocks, and 15% bonds. Right now you could have:

Taxable at Vanguard -- 14%
5% (VTSAX) Vanguard Total Stock Market Index Fund Admiral Shares (0.04%)
9% (VEXAX) Vanguard Extended Market Index Fund Admiral Shares (0.08%)

401k -- 52%
37% (PREIX) T. Rowe Price Equity Index 500 Fund Investor Class (0.23%)
15% (BMOAX) iShares U.S. Aggregate Bond Index Fund Investor A Shares (0.35%)

Inherited TIRA at Vanguard -- 23%
23% (VTIAX) Vanguard Total International Stock Index Fund Admiral Shares (0.11%)

Roth IRA at Vanguard -- 11%
11% (VTIAX) Vanguard Total International Stock Index Fund Admiral Shares (0.11%)

My comments:
  • This ignores the tax cost of selling in taxable.
  • Extended Market in taxable provides the mid/small caps missing from the 500 Index in the 401k. You could swap that out to Small-Cap Value if wanted. Or for simplicity just use Total Stock.
  • If you want 40% of stocks to be international, eventually you're going to have to add international to taxable.
Something to think about.
Topic Author
scottrj12
Posts: 12
Joined: Thu Jan 18, 2018 12:06 pm

Help, I feel I'm over-analyzing...

Post by scottrj12 »

[Thread merged into here, see below. --admin LadyGeek]

Hi Bogleheads,
I was hoping to solicit some portfolio advice. I feel like my allocations are all over the place, and I’m paralyzed by over analysis right now. Hoping for some advice and a nudge in the right direction.

• Emergency Funds: $100k (currently in a high yield savings account at 1.5%. This money is intended for a home purchase in CA in 2018, but coastal city real estate prices are insane and I’m having heartburn about possibly overpaying at the top of the market)
• Debt: Car loan $5k (1.89%)
• Tax Filing: Single
• Tax Rate: 28% / 9.3%
• State of Residence: CA
• Age: 36
• Desired Asset Allocation: 85% stocks / 15% bonds
• Desired International allocation: 40% of stocks

Current Portfolio

Taxable Vanguard Account:
• 3.83%: 500 Index (VFIAX)
• 3.35%: Value Index (VVIAX)
• 3.35%: Small-Cap Value Index (VSIAX)
• 3.35%: International Value (VTRIX)

Vanguard Roth IRA
• 7.52%: Wellington Fund (VWELX)
• 3.68%: REIT Index (VGSLX)

Vanguard IRA
• I only use it to funnel funds into my Roth via the backdoor. I cannot deduct contribution so this account remains $0 all year.

Vanguard IRA (Inherited) – 2018 is the first year I will take the RMD. I plan to put these RMDs into my taxable account. I’m on the stretch distribution plan.
• 3.07%: REIT Index (VGSLX)
• 3.2%: Total Bond Market (VBTLX):
• 7.16%: Total International (VTIAX):
• 9.7%: Total Stock Market (VTSAX):

Employer 401k (company match)
• 14.9%: T. Rowe Price Equity Index 500 (PREIX):
• 16.31%: JP Morgan Large Cap Growth (SEEGX):
• 7.19%: Dreyfus Midcap (PESPX):
• 7.19%: IShares MSCI EAFE Intl Idx (MDIIX):
• 6.60%: Core Plus Bond / PIMCO Fund:

Contributions

New Annual Contributions

• $18k into 401k ($5k employer match)
• $5,500 into Roth (via backdoor)
• I’m unsure how much to put into my taxable account given the froth in today’s market. I’m considering to keep building cash reserve for home purchase and/or deploy into the market if there’s a big correction.

Available Funds

Funds available in 401k

• JP Morgan Large Cap Growth (SEEGX): 0.85%
• American Funds EuroPacific Growth Fund R4 (RERCX): 0.85%
• Invesco Small Cap Growth Fund Y (GTSYX): 0.98%
• iShares MSCI EAFE Intl Idx Inv A (MDIIX): 0.38%
• MassMutual Select Mid Cap Growth Adm (MMELX): 1.03%
• T. Rowe Price Equity Index 500 (PREIX): 0.23%
• Columbia Contrarian Core A (LCCAX): 1.06%
• S/A Janus Balanced Strategy: 1.06%
• Dreyfus Midcap Index Fund (PESPX): 0.51%
• Invesco Growth & Income Fund A (ACGIX): 0.82%
• Janus Henderson Small Cap Value T (JSCVX): 1.13%
• Diamond Hill Small-Mid Cap (DHMAX): 1.24%
• Core Plus Bond / PIMCO Fund: 0.63%
• Nuveen Real Estate Secs A (FREAX): 1.30%
• iShares US Aggregate Bond Index Inv. A (BMOAX): 0.35%
• Guaranteed Income Fund (GIF): 0.25%

Questions

• Are the funds I selected for each of my accounts appropriate from a tax efficiency perspective?
• I’m a little light in my international exposure given my desired allocation. Would it make sense to beef up my international positions in my Roth, Taxable Account, or 401k?
• I’m basically looking for an overall review of my portfolio, and perhaps some suggestions on how I should, if needed, rebalance to a more appropriate allocation. I’d like to be on the aggressive side, since I still plan on working another 30 or so years.

Thanks in advance Bogleheads!
Topic Author
scottrj12
Posts: 12
Joined: Thu Jan 18, 2018 12:06 pm

Re: Portfolio Review/Advice

Post by scottrj12 »

Thank you so much everyone! The advice really helps focus my attention from being all over the place.

Much appreciated :)
User avatar
Tyler Aspect
Posts: 1620
Joined: Mon Mar 20, 2017 10:27 pm
Location: California
Contact:

Re: Help, I feel I'm over-analyzing...

Post by Tyler Aspect »

Is this a duplicate thread? Some of us has answered this one already. What's changed?
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.
User avatar
LadyGeek
Site Admin
Posts: 95696
Joined: Sat Dec 20, 2008 4:34 pm
Location: Philadelphia
Contact:

Re: Portfolio Review/Advice

Post by LadyGeek »

^^^ scottrj12 - You had a duplicate post and one reply (Tyler Aspect), which I merged into here.

I don't know if anything changed. Feel free to edit the post as you see fit.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
Topic Author
scottrj12
Posts: 12
Joined: Thu Jan 18, 2018 12:06 pm

Re: Portfolio Review/Advice

Post by scottrj12 »

Apologies, yes it was an accidental duplicate question. The material in the second post is identical to the first. Thanks again to all the Bogleheads who took the time to respond. Very helpful.

Thanks,

RJ
Post Reply