Need basic advice on organizing portfolio

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PFM
Posts: 3
Joined: Wed Aug 15, 2018 3:23 pm

Need basic advice on organizing portfolio

Post by PFM » Wed Aug 15, 2018 7:48 pm

Hi folks,

I'm new here and my name is Mark.

I'm hoping to tap into some of the knowledge, experience, and investment enthusiasm of the forum contributors and put it to good use.

My wife and I (56 & 58 respectively) have managed to accumulate some assets in spite of my poor investment decisions, passive approach, apathy after the two big crashes, and most recently, over the past four or five years, fear of taking another big hit close to retirement. The cumulative result of all this insanity is a paralysis that is responsible for the loss of many hundred thousand (at the very least) in gains due to all our money being parked in money market funds, saving accounts etc. I can no longer ignore this slothfulness and must make a change to get things going.

Consolidation and simplification are also possible items of concern as I need to make it easy for my wife if I go before her.

We have around 1.1M with about half of that being pretax. Around 500K with Fidelity, 300K with Janus, and the remainder in cash.

Normally I can do well at things after embracing them, but for whatever reason I have just never been able to get it done with investing. It's painful to think of the difference it could have made in our lives had I put forth just a little more effort in this area.

I would sincerely appreciate any advice as to a basic approach in getting our money invested in a responsible way and organized at the same time. Maybe I'm a person who would benefit from the Personal Adviser Services or some other such program.

Thank you for reading this and thanks in advance for any thoughts you may have to contribute.

Mark

Edit 8-16-18:
Fidelity: IRA - 130K SPAXX (MM); ROTH 36K SPAXX; SEP 16K SPAXX; 401K 280K (Textron managed fund); CASH 81K (taxable)
Janus: IRA - 266K JNMXX (MM); ROTH 42K JNMXX
Local Credit Union: CASH ACCOUNTs 273K (taxable)

Edit 8-17-18:
Not sure of our tax bracket, but we're not high earners. AGI < 100k most years.
Wife retired last year. I do a relatively small amount of engineering work from a home-based s-corp; I'm the only employee.
We do have the BrokerageLink option on our Fidelity account, but it hasn't been activated.
Paying state tax only to Kansas.
Last edited by PFM on Fri Aug 17, 2018 2:14 pm, edited 6 times in total.

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Peter Foley
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Location: Lake Wobegon

Re: Need basic advice on organizing portfolio

Post by Peter Foley » Wed Aug 15, 2018 8:40 pm

With your assets I would talk to someone at Schwab, Vanguard or Fidelity and ask them for a recommendation for a balanced portfolio with a XX/XX asset allocation invested in low cost index funds.

With Schwab you could probably meet with someone in person if you sere serious about transferring your assets to Schwab.

dogagility
Posts: 162
Joined: Fri Feb 24, 2017 6:41 am

Re: Need basic advice on organizing portfolio

Post by dogagility » Thu Aug 16, 2018 4:44 am

PFM wrote:
Wed Aug 15, 2018 7:48 pm
Maybe I'm a person who would benefit from the Personal Adviser Services or some other such program.
If you really don't think you can invest the DIY way due to the emotional component of investing, I suggest using Vanguard over any other shop. This way you will minimize the fee paid to the shop. Vanguard PAS is 0.3% of assets under management; other shops will be higher.

You may benefit from starting with Vanguard PAS, and once your asset allocation is established, you can choose to discontinue the service and DIY.

Either way, you'll want to educate yourself about investing so that your decisions are based upon knowledge. This will help you take the emotional part out of the investing thought process. You've come to the right place for this! Start by reading the Boglehead wiki and continue to ask questions in the forum.

ExitStageLeft
Posts: 816
Joined: Sat Jan 20, 2018 4:02 pm

Re: Need basic advice on organizing portfolio

Post by ExitStageLeft » Thu Aug 16, 2018 8:58 am

Welcome to the forum! Put recriminations behind you and look to the future. My situation mirrors yours, in that we awoke from our financial slumber last year and feel that we still have a ways to go. Assess your situation, make a plan, and then execute it.

I rolled my Janus IRA over to Vanguard this spring. It was easy peasy.

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ruralavalon
Posts: 13752
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Need basic advice on organizing portfolio

Post by ruralavalon » Thu Aug 16, 2018 10:28 am

Welcome to the forum :) .


PFM wrote:
Wed Aug 15, 2018 7:48 pm
Hi folks,

I'm new here and my name is Mark.

I'm hoping to tap into some of the knowledge, experience, and investment enthusiasm of the forum contributors and put it to good use.

My wife and I (56 & 58 respectively) have managed to accumulate some assets in spite of my poor investment decisions, passive approach, apathy after the two big crashes, and most recently, over the past four or five years, fear of taking another big hit close to retirement. The cumulative result of all this insanity is a paralysis that is responsible for the loss of many hundred thousand (at the very least) in gains due to all our money being parked in money market funds, saving accounts etc. [emphasis added] I can no longer ignore this slothfulness and must make a change to get things going.

Consolidation and simplification are also possible items of concern as I need to make it easy for my wife if I go before her.

We have around 1.2M with about half of that being pretax. Around 500K with Fidelity, 300K with Janus, and the remainder in cash. [emphasis added]

Normally I can do well at things after embracing them, but for whatever reason I have just never been able to get it done with investing. It's painful to think of the difference it could have made in our lives had I put forth just a little more effort in this area.

I would sincerely appreciate any advice as to a basic approach in getting our money invested in a responsible way and organized at the same time. [emphasis added] Maybe I'm a person who would benefit from the Personal Adviser Services or some other such program.

Thank you for reading this and thanks in advance for any thoughts you may have to contribute.

Mark
What sort of account(s) do you have at Fidelity?

What sort of account(s) do you have at Janus?

Please give us a list of all accounts, giving the account type, location (that is Fidelity, Janus, etc.), amount, and the investment(s) in each.

Would you prefer to stay with Fidelity? Is there a Fidelity customer service office in your locality?

Is there a Schwab customer service office in your locality?

Please simply add this to your original post using the edit button (the pencil icon near the upper right corner of your post), it helps a lot if all of your information is in one place.

It will probably be better to move the Janus account(s) to a low cost provider like Vanguard, Fidelity or Schwab.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

delamer
Posts: 5845
Joined: Tue Feb 08, 2011 6:13 pm

Re: Need basic advice on organizing portfolio

Post by delamer » Thu Aug 16, 2018 11:27 am

It sounds like you might be good candidates for some kind of advisor service, like the ones mentioned above.

In the meantime, I suggest you read this section on lazy portfolios in the Bogleheads’ wiki: https://www.bogleheads.org/wiki/Lazy_portfolios

This will give you a basic background in the types of portfolios and funds that a good advisor will recommend. Any proposal that strays too much from this advice is not for you.

Whether you use an advisor or DIY with one of the lazy portfolios, you will need to figure out the risk level you both are comfortable with and invest accordingly.

The risk level of any lazy portfolio can be adjusted by weighting the components. This chart of risk and return might help you figure out where you’d be comfortable:
https://personal.vanguard.com/us/insigh ... llocations

PFM
Posts: 3
Joined: Wed Aug 15, 2018 3:23 pm

Re: Need basic advice on organizing portfolio

Post by PFM » Thu Aug 16, 2018 1:13 pm

Peter Foley wrote:
Wed Aug 15, 2018 8:40 pm
With your assets I would talk to someone at Schwab, Vanguard or Fidelity and ask them for a recommendation for a balanced portfolio with a XX/XX asset allocation invested in low cost index funds.
With Schwab you could probably meet with someone in person if you sere serious about transferring your assets to Schwab.
Hi Peter, Thanks for your response. That sounds like good advice. We don't have a local Fidelity office, but do have a Schwab and I'm planning to look into a meeting with them.
dogagility wrote:
Thu Aug 16, 2018 4:44 am
You may benefit from starting with Vanguard PAS, and once your asset allocation is established, you can choose to discontinue the service and DIY.
Either way, you'll want to educate yourself about investing so that your decisions are based upon knowledge. This will help you take the emotional part out of the investing thought process.
Hi Dog, Thanks for this advice. I like your thoughts, and what you said is absolutely correct, it's time for me to get educated. Past time really, way past time. Knowledge always helps to generate some confidence that we're doing the right thing, and I need that.
ExitStageLeft wrote:
Thu Aug 16, 2018 8:58 am
Welcome to the forum! Put recriminations behind you and look to the future. My situation mirrors yours, in that we awoke from our financial slumber last year and feel that we still have a ways to go. Assess your situation, make a plan, and then execute it.
I rolled my Janus IRA over to Vanguard this spring. It was easy peasy.
Hi Exit, Thanks so much for the kind words and the inspiration that came with them. And the term "financial slumber" - that's sure an apt description for myself. Investment psychology is a funny thing.
ruralavalon wrote:
Thu Aug 16, 2018 10:28 am
Would you prefer to stay with Fidelity? Is there a Fidelity customer service office in your locality?
Is there a Schwab customer service office in your locality?
It will probably be better to move the Janus account(s) to a low cost provider like Vanguard, Fidelity or Schwab.
Hi Rural, Thanks for your interest and kind help. I have added most of our accounts & totals to the original post per your suggestion. We don't have a local Fidelity office but we do have a Schwab office. I really don't have a strong opinion one way or the other about Fidelity, but they do administrate a couple of pensions that we have and also the Textron 401k mentioned above, so I guess it might be convenient to keep at least some of the accounts with Fidelity. I like your idea of moving the Janus accounts to Vanguard and also moving our Credit Union cash to Vanguard as well.
delamer wrote:
Thu Aug 16, 2018 11:27 am
It sounds like you might be good candidates for some kind of advisor service, like the ones mentioned above.

In the meantime, I suggest you read this section on lazy portfolios in the Bogleheads’ wiki: https://www.bogleheads.org/wiki/Lazy_portfolios

This will give you a basic background in the types of portfolios and funds that a good advisor will recommend. Any proposal that strays too much from this advice is not for you.

Whether you use an advisor or DIY with one of the lazy portfolios, you will need to figure out the risk level you both are comfortable with and invest accordingly.

The risk level of any lazy portfolio can be adjusted by weighting the components. This chart of risk and return might help you figure out where you’d be comfortable:
https://personal.vanguard.com/us/insigh ... llocations
Hi Delamer, Thanks for your advice and also the informative links that you provided. I'm planning to read them this evening. I've never heard the term "Lazy portfolio", but it sounds like the right one for me.

Again, thank you to everyone that has responded with the helpful comments and information. It's just what I needed to move me off center and headed in the right direction! The best time to have done it would have been anytime before now, but the next best time is right now.

Mark

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ruralavalon
Posts: 13752
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Need basic advice on organizing portfolio

Post by ruralavalon » Thu Aug 16, 2018 5:07 pm

PFM wrote:
Wed Aug 15, 2018 7:48 pm
Hi folks,

I'm new here and my name is Mark.

I'm hoping to tap into some of the knowledge, experience, and investment enthusiasm of the forum contributors and put it to good use.

My wife and I (56 & 58 respectively) have managed to accumulate some assets in spite of my poor investment decisions, passive approach, apathy after the two big crashes, and most recently, over the past four or five years, fear of taking another big hit close to retirement. The cumulative result of all this insanity is a paralysis that is responsible for the loss of many hundred thousand (at the very least) in gains due to all our money being parked in money market funds, saving accounts etc. I can no longer ignore this slothfulness and must make a change to get things going.

Consolidation and simplification are also possible items of concern as I need to make it easy for my wife if I go before her.

We have around 1.1M with about half of that being pretax. Around 500K with Fidelity, 300K with Janus, and the remainder in cash.

Normally I can do well at things after embracing them, but for whatever reason I have just never been able to get it done with investing. It's painful to think of the difference it could have made in our lives had I put forth just a little more effort in this area.

I would sincerely appreciate any advice as to a basic approach in getting our money invested in a responsible way and organized at the same time. Maybe I'm a person who would benefit from the Personal Adviser Services or some other such program.

Thank you for reading this and thanks in advance for any thoughts you may have to contribute.

Mark

Fidelity: IRA - 130K SPAXX (MM); ROTH 36K SPAXX; SEP 16K SPAXX; 401K 280K (Textron managed income fund); CASH 81K
Janus: IRA - 266K JNMXX (MM); ROTH 42K JNMXX
Local Credit Union: CASH ACCOUNTs 273K
What is your tax bracket, both federal and state? What state do you pay any state income tax to?

Does your 401k include a Fidelity BrokerageLink?

Again please just add this to your original post using the edit button.

. . . . .

For funds and location of accounts I usually suggest
1) Vanguard,
2) Fidelity, or
3) Schwab
in that order of preference.

Vanguard has by far the largest selection of low expense mutual funds offered anywhere. I also like Vanguard's mutual structure, Vanguard is owned by the Vanguard funds, has no other shareholders, and so conflicts of interest with shareholders don't exist. Both Vanguard and Fidelity have a larger selection of low expense index funds than does Schwab.We have all of our accounts at Vanguard, and use only Vanguard index funds.

Both Fidelity and Schwab have local customer service offices in some cities, but Vanguard does not. None have a local office near me, so that was not a factor in my choice.

Your 401k with Fidelity (which cannot currently be moved) is about 25% of your portfolio. In total you currently have about 39% of your total portfolio in Fidelity accounts.

You indicate that there is a Schwab customer service office near you. A local office is important for some, but in my opinion not at all necessary. We have had no problems with the rare phone consultations that were necessary. I call Vanguard once per year at most, some years not at all. Once a reasonable investing plan is set up, it requires almost no attention. Some people prefer the customer service at Fidelity or Schwab.

Schwab does not offer a total international stock index fund, both Vanguard and Fidelity do. Vanguard stock index funds are more tax-efficient, which is important if you are using a taxable account. Vanguard offers a larger selection of tax-exempt bond funds than either Schwab or Fidelity, which is important if you are using a taxable account and are in a high tax bracket. It looks like you have about 25% credit union cash that would go to a taxable account.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

PFM
Posts: 3
Joined: Wed Aug 15, 2018 3:23 pm

Re: Need basic advice on organizing portfolio

Post by PFM » Fri Aug 17, 2018 3:44 pm

Rural,

That info was very helpful. Thanks for your time and effort in providing it.

I have appended the info you requested to the original post.

After reading your thoughts a couple of times and sleeping on it, I've decided the first step is to transfer the Janus funds to Vanguard and also set up an account for the Credit Union cash. I'll do it this weekend. I have no idea what to do with it when it gets there, but I'm hopeful I can impose on you for further advice.

Turns out having a Schwab office locally isn't that important to me either, as I do about everything online anyway, and it's actually not all that convenient being on the other side of town and all the traffic.

Thanks again

User avatar
ruralavalon
Posts: 13752
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Need basic advice on organizing portfolio

Post by ruralavalon » Sat Aug 18, 2018 10:31 am

PFM wrote:
Wed Aug 15, 2018 7:48 pm
Not sure of our tax bracket, but we're not high earners. AGI < 100k most years.
Wife retired last year. I do a relatively small amount of engineering work from a home-based s-corp; I'm the only employee.
We do have the BrokerageLink option on our Fidelity account, but it hasn't been activated.
Paying state tax only to Kansas.
PFM wrote:
Fri Aug 17, 2018 3:44 pm
Rural,

That info was very helpful. Thanks for your time and effort in providing it.

I have appended the info you requested to the original post.

After reading your thoughts a couple of times and sleeping on it, I've decided the first step is to transfer the Janus funds to Vanguard and also set up an account for the Credit Union cash. I'll do it this weekend. I have no idea what to do with it when it gets there, but I'm hopeful I can impose on you for further advice.

Turns out having a Schwab office locally isn't that important to me either, as I do about everything online anyway, and it's actually not all that convenient being on the other side of town and all the traffic.

Thanks again
Here are calculators you can use to estimate your federal tax bracket. First estimate your "taxable income". money chimp, "Tax Calculator". Then use your "taxable income" to estimate your "tax bracket". Moneychimp, "Federal Tax Brackets".

Do you have a desired asset allocation (stock/bond mix; domestic/international stock mix) that you would like to aim for? Please see the wiki articles Bogleheads® investment philosophy, part 3 "Never bear too much or too little risk", and "Asset allocation".

About how much (In dollars) do you believe you may be able to contribute annually to investing (total, all accounts)?

What funds are offered in your 401k plan? Please give fund names, tickers and expense ratios? Please see this for format: "Asking Portfolio Questions".

Again please simply add this to your initial post.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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