Review & improvement on personal investment portfolio

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diyfihp
Posts: 6
Joined: Sun Apr 15, 2018 9:47 am
Location: NY

Review & improvement on personal investment portfolio

Post by diyfihp » Mon Apr 16, 2018 5:09 pm

Hello Everyone!

I am new to group but do share philosophy of low cost quality indexing! I would like to get your feedback on my personal investment portfolio.

Thanking you in advance for your time.

Emergency funds: four/six months of expenses
Debt: ( ~18K car loan @ 0.00%)
Tax Filing Status: (Married with joint; Spouse homemaker )
Tax Rate: 15% Federal, 9.3% State
State of Residence: NJ
State of Work: NY
Age: 40
Desired Asset allocation: 90% stocks / 10% bonds
Desired International allocation: 40% of stocks
401K contribution : Max IRS limit
Roth contribution : Max IRS limit
Spouse Roth contribution : Max IRS limit
529 contribution : 6K for two kids ( detail is not mentioned in below )

Allocation strategy:
US Large Blend 11.00%
US Large Value 11.00%
US Small Blend 11.00%
US Small Value 12.00%
US REIT 5.00%
Int Large Blend 10.00%
Int Large Value 10.00%
Int Small 15.00%
Emerging Market 10.00%
Int REIT 5.00%
Inter Treasury Bond 5.00%
Short-Term Treasury Bond 3.00%
Inflation-Protected Bond 2.00%

Current retirement assets:

401K [Brokerage Link + 401K ] Company match: 4% @ fidelity
9.14% (FUSVX) fidelity 500 index premium class (0.04)
6.03% (FLCHX) fidelity large cap value index premium (0.05)
2.67% (IUSV) ishares core s&p us value etf (0.05)
10.07% (FSSVX) fid small cap index premium class (0.05)
4.24% (IJS) ishares s&p smallcap 600 value etf (0.25)
3.67% (FREL) fidelity msci real estate index etf (0.08)
7.66% (FSIVX) fid intl index pr (0.06) [401K]
6.56% (VYMI) vanguard intl high div yld etf (0.32)
7.39% (FPMAX) fidelity emerging mkts index premium (0.13)
3.13% (VNQI) vanguard intl equity index fds global ex-us real estate inde (0.15)
5.37% (FIBAX) fid inter treasury bond index premium (0.06)
3.29% (FSBIX)fidelity® short-term treasury bd idx inv (0.16)
0.00% (FSIYX) fidelity inflation-protected bond premium (0.09)
0.45% (FDRXX**) fidelity government cash reserves

My ROTH IRA @ fidelity
7.35% (VIOV) vanguard s&p small-cap 600 value etf (0.20)
7.49%% (VSS) vanguard intl equity index fdsftse all world ex usa small ca (0.13)
2.71% (SPAXX**)fidelity government money market

Her ROTH IRA @ fidelity
2.03% (IVV) shares core s&p 500 (0.04)
1.25% (IUSV) ishares core s&p us value etf (0.05)
1.85% (VBR) vanguard index fds vanguard small cap value vipers (0.07)
0.64% (FREL) fidelity msci real estate index etf (0.08)
5.88% (VSS) vanguard intl equity index fdsftse all world ex usa small ca (0.13)
1.11% (IEMG) ishares core msci emmarkets (0.14)

Average ex ratio 0.11

401K Offerings:
trp equity income (prfdx) 0.66%
baron growth (bgrfx) 1.3%
col mid cap index i (nmpax) 0.31%
jh dscpl val mdcp r4 (jvmtx) 1.12%
abf sm cap value y (absyx) 0.91%
col sm cap index i (nmscx) 0.2%
loomis sm cp grth is (lssix) 0.95%
af cap world g&i r5 (rwifx) 0.49%
fid intl index pr (fsivx) 0.06%
opphmr intl grth y (oigyx) 0.85%
wf emrg mkts eq is (emgnx) 1.23%
vang target ret 2015 (vtxvx) 0.13%
vang target ret 2020 (vtwnx) 0.13%
vang target ret 2025 (vttvx) 0.14%
vang target ret 2030 (vthrx) 0.14%
vang target ret 2035 (vtthx) 0.14%
vang target ret 2040 (vforx) 0.15%
vang target ret 2045 (vtivx) 0.15%
vang target ret 2050 (vfifx) 0.15%
vang target ret 2055 (vffvx) 0.15%
vang target ret inc (vtinx) 0.13%
fidelity govt income (fgovx) 0.45%
j h high-yield i (jhyfx) 0.67%
pim real return inst (prrix) 0.64%
pim total rt inst (pttrx) 0.51%
vang tot bd mkt adm (vbtlx) 0.05%
putnam stable value 0.67%
fid govt mmkt (spaxx) 0.42%

1) Please do review and open for suggestion on improvement and simplification
2) Please do advise on semi monthly & annual roth contribution; Do not know one can automate buying ETF without manual/emotion interventions.
3) I feel overwhelming to manage above funds/etf and same time thinking that 3 fund strategy leaves money on the table!
4) Please do advise on value US & international ETF/fund @ fidelity for commission free buying
Last edited by diyfihp on Fri Apr 20, 2018 12:17 pm, edited 2 times in total.

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Pajamas
Posts: 6015
Joined: Sun Jun 03, 2012 6:32 pm

Re: Review & improvement on personal investment portfolio

Post by Pajamas » Mon Apr 16, 2018 6:18 pm

diyfihp wrote:
Mon Apr 16, 2018 5:09 pm
3) I feel overwhelming to manage above funds/etf and same time thinking that 3 fund strategy leaves money on the table!
You have a lot of holdings and many of them are substantially similar and have a lot of overlap. I doubt that you could list what you hold or explain exactly what each fund holds or have any plan to manage them. The number of holdings makes it difficult to rebalance or even figure out what the current allocation is.

You should question your belief that a simple portfolio leaves money on the table. That seems to be the underlying problem that needs to be dealt with first. Seems like you are questioning it or are at least opening to questioning it or you wouldn't be here.

Best thing to do would be to start reading here:

https://www.bogleheads.org/wiki/Getting_started

You need to come up a desired asset allocation for your investments, for one thing.

Also, people would be able to give you better and more specific advice if you listed all the choices available to you in your 401(k).

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Duckie
Posts: 6074
Joined: Thu Mar 08, 2007 2:55 pm

Re: Review & improvement on personal investment portfolio

Post by Duckie » Mon Apr 16, 2018 6:24 pm

diyfihp wrote:Age: 40
Desired Asset allocation: 90% stocks / 10% bonds
10% bonds is low for your age. I'd be 30%.
Desired International allocation: 40% of stocks
Vanguard has found between 20% and 40% of stocks in international to be the "sweet spot". See the Vanguard paper link and the discussion. I usually split the difference and recommend 30% of stocks. Your 40% is reasonable.
401K [Brokerage Link + 401K ] Company match: 4%
You have way too many funds/ETFs. What are all the standard options in the plan (not including brokerage link)? If Fidelity provides the brokerage link why are you buying tiny pieces of the market? You could be in Total Market Index, Total International Index, and US Bond Index.
My ROTH IRA
<snip>
Her ROTH IRA
Where are these held?

You've got:
  • 401k -- 70%
    My Roth IRA -- 17%
    Her Roth IRA -- 13%
Please do review and open for suggestion on improvement and simplification
You could put just one fund in both Roth IRAs and use the 401k for everything else (depending on options).
Please do advise on semi monthly & annual roth contribution; Do not know one can automate buying ETF without manual/emotion interventions.
If you have the money, one lump-sum contribution early in the year is optimal.
I feel overwhelming to manage above funds/etf and same time thinking that 3 fund strategy leaves money on the table!
It doesn't leave money on the table. It covers everything you need.

MoneyMarathon
Posts: 161
Joined: Sun Sep 30, 2012 3:38 am

Re: Review & improvement on personal investment portfolio

Post by MoneyMarathon » Mon Apr 16, 2018 10:35 pm

diyfihp wrote:
Mon Apr 16, 2018 5:09 pm
I am new to group but do share philosophy of low cost quality indexing!
diyfihp wrote:
Mon Apr 16, 2018 5:09 pm
Desired Asset allocation: 90% stocks / 10% bonds
Desired International allocation: 40% of stocks
diyfihp wrote:
Mon Apr 16, 2018 5:09 pm
Average ex ratio 0.11
This will reduce your average expenses and get you (basically) where you want for asset allocation, with a little more bonds. You can adjust the percentages in the 401k if you are looking for an exact hit on the above percentages.
diyfihp wrote:
Mon Apr 16, 2018 5:09 pm
401K [Brokerage Link + 401K ] Company match: 4% @ fidelity
50% FSTVX - Fidelity Total Market Index Fund - Premium Class (.035%) [or FSTMX]
30% FTIPX - Fidelity Total International Index Fund - Premium Class (.1%) [or FTIGX]
20% FSITX - Fidelity U.S. Bond Index Fund - Premium Class (0.045%) or Vanguard Total Bond (VBTLX, 0.05%)
diyfihp wrote:
Mon Apr 16, 2018 5:09 pm
My ROTH IRA @ fidelity
60% FSTVX - Fidelity® Total Market Index Fund - Premium Class (.035%) [or FSTMX]
40% FTIPX - Fidelity® Total International Index Fund - Premium Class (.1%) [or FTIGX]
diyfihp wrote:
Mon Apr 16, 2018 5:09 pm
Her ROTH IRA @ fidelity
60% FSTVX - Fidelity® Total Market Index Fund - Premium Class (.035%) [or FSTMX]
40% FTIPX - Fidelity® Total International Index Fund - Premium Class (.1%) [or FTIGX]
diyfihp wrote:
Mon Apr 16, 2018 5:09 pm
1) Please do review and open for suggestion on improvement and simplification
See above.
diyfihp wrote:
Mon Apr 16, 2018 5:09 pm
2) Please do advise on semi monthly & annual roth contribution; Do not know one can automate buying ETF without manual/emotion interventions.
I suggest doing the Roth contributions annually in the first week of January. Why?

1) Dollar cost averaging underperforms lump sum (if you have the lump sum up front), two thirds of the time.
2) Doing it all at once can make things simpler if you have to do a "backdoor" contribution by way of conversion.

Of course (2) might only be a problem in the future. Since it isn't a problem now, monthly or semi monthly is fine.
diyfihp wrote:
Mon Apr 16, 2018 5:09 pm
3) I feel overwhelming to manage above funds/etf
Dump them. Simplify. You're wasting your time. It's all a net negative, after time and stress are considered.
diyfihp wrote:
Mon Apr 16, 2018 5:09 pm
and same time thinking that 3 fund strategy leaves money on the table!
Not really. A 3 fund strategy does not leave money on the table, if you're evaluating the decision "before the fact" and if you're considering your exposure only to equity risk ("beta") and to the risks of bonds. What the 3 fund strategy does do, within each of the 3 funds, is to minimize both positive and negative "alpha" within each of the 3 funds, at very low cost. The very low costs are important because costs are guaranteed negative "alpha."

Alpha is what you hope to gain by betting intelligently against other investors, plus any extra costs/arbitrage that arise outside of the market (for example, the fees your are charged are negative alpha). Fund selection gets alpha only to the extent that you're lucky and/or smarter than the average professional investor. You can't expect to be lucky. Do you believe that you're better at picking funds than the average professional investor?

You can try to get more complicated, and try to do better in equities, but pretty much every attempt at slicing & dicing is at least a little controversial, underperforms for many long stretches of years at a time, and thus is only for those who know what they're doing.
diyfihp wrote:
Mon Apr 16, 2018 5:09 pm
4) Please do advise on value US & international ETF/fund @ fidelity for commission free buying
See above.

If you explain how you want to tilt and why, you can figure out maybe 1 or 2 funds to add. But you need a good reason. And you're still most likely just wasting your time.

User avatar
badbreath
Posts: 919
Joined: Mon Jul 18, 2016 7:50 pm

Re: Review & improvement on personal investment portfolio

Post by badbreath » Mon Apr 16, 2018 11:16 pm

I agree with what MoneyMarathon has outlined to simplify your holdings but one other thing to think about is can you lower your income and save on taxes if your wife does a tIRA vs the Roth. Don't know your income but something to look in to
“While money can’t buy happiness, it certainly lets you choose your own form of misery.” Groucho Marx

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Watty
Posts: 14630
Joined: Wed Oct 10, 2007 3:55 pm

Re: Review & improvement on personal investment portfolio

Post by Watty » Tue Apr 17, 2018 10:45 pm

You have way too many funds.

You do not have any money in taxable accounts so the taxes are not an issue so the target date funds would be a great choice. Sometimes people look at them as some sort of dumbed down "investing for dummies" choice that need to be improved on but in the right situation they are an excellent choice.

The main reasons not to use a target date fund are if you have retirement money in a taxable account or if you don't have a good one in your 401k. Neither of these is a problem for you.

diyfihp
Posts: 6
Joined: Sun Apr 15, 2018 9:47 am
Location: NY

Re: Review & improvement on personal investment portfolio

Post by diyfihp » Fri Apr 20, 2018 12:27 pm

Pajamas wrote:
Mon Apr 16, 2018 6:18 pm
diyfihp wrote:
Mon Apr 16, 2018 5:09 pm
3) I feel overwhelming to manage above funds/etf and same time thinking that 3 fund strategy leaves money on the table!
You have a lot of holdings and many of them are substantially similar and have a lot of overlap. I doubt that you could list what you hold or explain exactly what each fund holds or have any plan to manage them. The number of holdings makes it difficult to rebalance or even figure out what the current allocation is.
diyfihp wrote: Thank you so much for insight. I have updated my allocation strategy which d&c basis using 10 fund. Agree with re-balancing, it is little time consuming since have to balance it with 3 different account. I use prospect of fund to refer holding and site like https://www.personalcapital.com/

You should question your belief that a simple portfolio leaves money on the table. That seems to be the underlying problem that needs to be dealt with first. Seems like you are questioning it or are at least opening to questioning it or you wouldn't be here.
diyfihp wrote: I have used https://www.portfoliovisualizer.com/ to compare return of 10 fund strategy with others!
Best thing to do would be to start reading here:

https://www.bogleheads.org/wiki/Getting_started
diyfihp wrote: Sure thing over weekend!
You need to come up a desired asset allocation for your investments, for one thing.

Also, people would be able to give you better and more specific advice if you listed all the choices available to you in your 401(k).
diyfihp wrote: Updated both on original post.

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