Taking the Plunge -- Portfolio Feedback

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
zerosandones
Posts: 13
Joined: Sun Apr 22, 2018 4:54 pm

Taking the Plunge -- Portfolio Feedback

Post by zerosandones »

First off thanks to everyone here for answering my questions over the last few weeks, and for the community in general. It's been a blast to move from "man-child" to man and start to manage my finances intelligently.

I'm at the point now where I'm ready to execute on everything I've learned over the last few months and it would be great to get some final feedback on my AA and portfolio decisions.

Age: 30
Tax Bracket: 24% federal, 6.65% state (NY)
Tax Filing Status: Single
Debt: None
Size of Portfolio: Low-mid six figures

ASSET ALLOCATION

Cash 1.6% APY at CapitalOne
Emergency Fund: $25k (6 months of expenses)
Engagement Ring: $15k
Downpayment Fund: $20k (interested in purchasing a house in the next 2-5 years, no specific plans yet -- will keep this in a 2 yr CD)

This leaves me about $60k of cash to bring into the market.

Bonds - 20%
Tax Advantaged - 70%
- Total Bond Market (100%)
Taxable - 30%
- Limited Term Tax Exempt (100%)

Stocks - 80%
Domestic - 65%
- Total Stock Market (70%)
- Small Cap Value (30%)
International - 35%
- Total International Stock (100%)

ACCOUNT ALLOCATION

Tax Advantaged (47% of investable funds)

Current Employer 401k
Total Bond Market - VBMPX 0.03% ER - 100% of tax advantaged bond allocation
Total International - N/A .07% ER - 16% of international stock allocation

Previous Employer 401k
Total International - FSPNX .05% ER - 44% of international stock allocation

Roth IRA
Small Cap Value - VBR .07% ER - 100% of small cap value allocation

Traditional IRA (very small amount rolled over from a previous employer)
Total International - VXUS .11% ER - 3% of international stock allocation

Taxable (53% of investable funds)

Brokerage
Total Stock Market - VTI .04% ER - 84% of US total stock market allocation
Total International - VXUS .11% ER - 36% of international stock allocation
Limited Term Tax Exempt - VMLTX .19% ER - 100% of taxable bond allocation

ESPP Company Stock at 15% discount
TRI - 16% of US total stock market allocation

Some notes on the above:
- Can see that my company stock is overweighted, but given I get a 15% discount on it seems like a good deal / low risk any way. I'll only get to do one more quarter anyhow, as my division is being sold to Blackstone
- Going to switch my 401k assets to a Roth 401k going forward, given my tax bracket dropped from 28% to 24% this year. Plan to make contributions to total international index and potentially small cap if I need more, switching to bonds in my former employer's 401k to rebalance
- I elected to do 30% bonds in taxable per my question here: viewtopic.php?f=1&t=247775&p=3893854 -- more on that below as well

Main Questions:
- How is the split of assets across accounts? Do I have the right things in the right places for tax efficiency and growth?
- The $20k for a downpayment is a total guess. I'll probably move in a year, and then I'll probably want to start looking for a house a year or two after that. But my girlfriend is applying to residency, so where she (and potentially I) end up are a pretty big question mark going out the next 4-5 years. As such I figured I would keep the $20k in a 2 year CD (my bank, CapitalOne offers a 2.25% APY), and keep the limited term bond fund in taxable, which has a tax equivalent yield of about 2.6%. If I had to cash out the taxable bond fund out to help out a house purchase, I would be fine with my AA swinging slightly heavier to stocks for a while until I could replenish. There's a good chance I wouldn't have to do that though, as I plan to continue to put money away for a down payment over the next 2-5 years and my parents have also mentioned wanting to help out with this... but I figured having some bonds in taxable would be a good hedge against all outcomes (and it's a better rate than the CD, any way)
- I *think* I have the grit to do lump sum for the $60k cash I intend to bring in, as its supposedly better than DCA 2/3 of the time, and I'm trying very hard to "tune out the noise" regarding the fact that the market is hypothetically overvalued / rising rates etc ... any sage advice around this?

Thanks again for all the feedback, much appreciated.
Topic Author
zerosandones
Posts: 13
Joined: Sun Apr 22, 2018 4:54 pm

Re: Taking the Plunge -- Portfolio Feedback

Post by zerosandones »

Bump :happy
WanderingDoc
Posts: 1341
Joined: Sat Aug 05, 2017 8:21 pm

Re: Taking the Plunge -- Portfolio Feedback

Post by WanderingDoc »

Based on your $60K downpayment for a house, I am going to guess that you're outside NYC, maybe somewhere in the Syracuse or Buffalo area. A $60K down payment may not even buy you a parking space in NYC! :twisted:

You had mentioned your wife is a resident, are you also a physician? Been meeting a lot of dual physician couples lately.

I know some of the veterans on here will give you some feedback on the index funds. Based on how organized and detail oriented your initial post was, I think you are doing fine. I am also right around your tax bracket - currently doing 50% trad/50% Roth in the 401k. Not quite sure what the best answer for this is, if there even is one.
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.
Nightowl99
Posts: 36
Joined: Mon Feb 26, 2018 7:49 pm

Re: Taking the Plunge -- Portfolio Feedback

Post by Nightowl99 »

I'm not an expert but I think you have things just right for tax efficiency. I'd be concerned about owning that much company stock, though. Maybe consider buying it at the discounted price but exchanging it for something else, like the more of the index funds you already have. Maybe keep the company stock at or below 5% of your total stock allocation, just in case something happens to the company.
"Please delete my account" -- jazzmaster | "Yeah, delete my account, too! Also, I'd like an order of flapjacks, thanks. And extra napkins."--Robot Monster
Topic Author
zerosandones
Posts: 13
Joined: Sun Apr 22, 2018 4:54 pm

Re: Taking the Plunge -- Portfolio Feedback

Post by zerosandones »

Regarding company stock, that definitely makes sense. There are some restrictions on sale, so I think once we move to the new company and I get the final terms I'll work on selling a chunk of it (wondering if we'll be able to divest without penalty given the program is ending).

Regarding the downpayment -- that's a base for another $100k or so to be added by myself and my girlfriend over the next few years. Will be in CA or AZ as well as we plan to move west! She's a dentist and I'm a software engineer. I'm sure her parents would've preferred a physician though ;)

Thanks for the feedback, much appreciated!
Post Reply