Portfolio Guidance

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Rangers91
Posts: 4
Joined: Fri Oct 12, 2018 8:15 am

Portfolio Guidance

Post by Rangers91 » Fri Oct 12, 2018 8:21 am

Good morning and thanks in advance for your assistance.

I was hoping to get a check up on my current AA/ investment choices.

Personal Background-

27yo
Single

Accounts:

401K (My company utilizes Wells Fargo)
75% VINIX [Vanguard Institutional Index I]
25% VTSNX [Vanguard Total International Stock Index I]

ROTH IRA (Fidelity)
75% FUSEX [Fidelity 500 Index Investor]
25% FIGFX [Fidelity International Growth]

HSA (Bank of America)
75% WFSPX [iShares S&P 500 Index K]
25% BDOKX [iShares MSCI Total International Index K]

Am I allocated too aggressively? Should I be in total market funds where available or is an S&P500 fund ok?

Thank you all again!
Last edited by Rangers91 on Fri Oct 12, 2018 9:56 am, edited 1 time in total.

Rangers91
Posts: 4
Joined: Fri Oct 12, 2018 8:15 am

Re: Portfolio Guidance

Post by Rangers91 » Fri Oct 12, 2018 9:49 am

I wanted to follow up on my post with a little more detail. I'm willing to be aggressive, especially at my young age. I just want to make sure I'm not missing anything with what feels like an overly simple portfolio. I'm open to any suggestions.

ExitStageLeft
Posts: 988
Joined: Sat Jan 20, 2018 4:02 pm

Re: Portfolio Guidance

Post by ExitStageLeft » Fri Oct 12, 2018 9:50 am

Welcome to the forum! You would do many of us a huge favor by taking the time to write down the name of each of your funds. There are some that are cited so frequently that they are known to all, but with so many tickers it's hard to know what each is.

Rangers91
Posts: 4
Joined: Fri Oct 12, 2018 8:15 am

Re: Portfolio Guidance

Post by Rangers91 » Fri Oct 12, 2018 9:56 am

ExitStageLeft wrote:
Fri Oct 12, 2018 9:50 am
Welcome to the forum! You would do many of us a huge favor by taking the time to write down the name of each of your funds. There are some that are cited so frequently that they are known to all, but with so many tickers it's hard to know what each is.
My apologies- I've updated my initial post to reflect your request.

ExitStageLeft
Posts: 988
Joined: Sat Jan 20, 2018 4:02 pm

Re: Portfolio Guidance

Post by ExitStageLeft » Fri Oct 12, 2018 10:09 am

You are in 100% equities at age 27, which is not unreasonable. You will find recommendations for a bond allocation ranging from 0% to 27%, with most suggesting at least 10%. Target date funds such as the Fidelity Freedom Index 2050 fund start outwith an initial 10% bonds. Something to consider, but if you're comfortable with 100% stocks then let it ride.

An S&P 500 fund is often the closest thing to a total stock market (TSM) fund in many 401k plans. I would be fine having just that in the 401k, but I would want TSM in the IRA and HSA. The returns are all but identical, but you gain greater diversification with the TSM funds.

You can also simplify things a little bit by having just one fund in each account, except the one you use to balance. Just make sure that your overall portfolio has the percentages you seek. Thus you might have something like

401K (My company utilizes Wells Fargo)
50% VINIX [Vanguard Institutional Index I]
15% VTSNX [Vanguard Total International Stock Index I]

ROTH IRA (Fidelity)
25% FIGFX [Fidelity International Growth]

HSA (Bank of America)
10% WFSPX [iShares S&P 500 Index K]

Note that the percentages all add up to 100%. You can sometimes lower your expense ratio by selecting which funds go in which account. You'll want to do your re-balancing in the 401k, as it likely has the most funds. If you decide to add a bond fund, it is also best suited to be in the 401k.

Rangers91
Posts: 4
Joined: Fri Oct 12, 2018 8:15 am

Re: Portfolio Guidance

Post by Rangers91 » Fri Oct 12, 2018 10:13 am

If I were wanting to allocate as you laid out, but had the bulk of my money in the ROTH currently, what is the best way to rebalance to get to the suggested allocation across all accounts? Just slowly work towards that overall allocation as I contribute to the 401k?

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Duckie
Posts: 6067
Joined: Thu Mar 08, 2007 2:55 pm

Re: Portfolio Guidance

Post by Duckie » Fri Oct 12, 2018 7:28 pm

Rangers91 wrote:Am I allocated too aggressively?
I'd add some bonds, at least 10%. 20% would be better.
Should I be in total market funds where available or is an S&P500 fund ok?
I prefer total market myself. But the big issue I see is FIGFX which has a 1.03% expense ratio. You're much better off in FTIGX Fidelity Total International (0.06%) in the Roth IRA. And I'd switch out FUSEX for FSTMX Fidelity Total Market (0.015%).
If I were wanting to allocate as you laid out, but had the bulk of my money in the ROTH currently, what is the best way to rebalance to get to the suggested allocation across all accounts? Just slowly work towards that overall allocation as I contribute to the 401k?
All three accounts are tax-sheltered so when you decide what you want you can just move things quickly.

Right now what are the account percentages totaling 100%?
  • 401k at Wells Fargo -- ??
    Roth IRA at Fidelity -- ??
    HSA at Bank of America -- ??
What are the bond options in the 401k and HSA?

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ruralavalon
Posts: 14250
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Portfolio Guidance

Post by ruralavalon » Sat Oct 13, 2018 9:34 am

Welcome to the forum :) .

How much (in dollars) are you contributing annually to each account? When young and just starting out a high contribution rate is as important as almost anything else you can do in investing.

Do you have any debt? If so what types, amounts and interest rates?

What bond funds are offered in your 401k?

You can 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.

Rangers91 wrote:
Fri Oct 12, 2018 8:21 am
Good morning and thanks in advance for your assistance.

I was hoping to get a check up on my current AA/ investment choices.

Personal Background-

27yo
Single

Accounts:

401K (My company utilizes Wells Fargo)
75% VINIX [Vanguard Institutional Index I]
25% VTSNX [Vanguard Total International Stock Index I]

ROTH IRA (Fidelity)
75% FUSEX [Fidelity 500 Index Investor]
25% FIGFX [Fidelity International Growth]

HSA (Bank of America)
75% WFSPX [iShares S&P 500 Index K]
25% BDOKX [iShares MSCI Total International Index K]

Am I allocated too aggressively? Should I be in total market funds where available or is an S&P500 fund ok?

Thank you all again!
Even at age 27 I suggest around 20% in bonds, in my opinion you are invested too aggressively.

I suggest using a total stock market index fund where available, otherwise a S&P 500 index fund is good enough by itself for domestic stocks. A S&P 500 index fund covers 81% of the U.S. stock market, investing in stocks ofselected large-cap and mid-cap U.S.companies. In the 26 years since the creation of the first total stock market fund the two types of funds have had almost identical performance.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

ExitStageLeft
Posts: 988
Joined: Sat Jan 20, 2018 4:02 pm

Re: Portfolio Guidance

Post by ExitStageLeft » Sat Oct 13, 2018 10:05 am

Rangers91 wrote:
Fri Oct 12, 2018 10:13 am
If I were wanting to allocate as you laid out, but had the bulk of my money in the ROTH currently, what is the best way to rebalance to get to the suggested allocation across all accounts? Just slowly work towards that overall allocation as I contribute to the 401k?
Really no difference between the Roth and the 401k, since they are both tax-advantaged. With a smaller 401k (say 25% of assets) I would consider the same allocation but a different choice of funds. As others have pointed out, we really need to know the specifics for your 401k as to which funds are offered and how much are the expenses under your plan.

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