Help updating portfolio for 2019.

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Topic Author
CBgall
Posts: 10
Joined: Wed Dec 19, 2018 7:54 pm

Help updating portfolio for 2019.

Post by CBgall » Mon Dec 31, 2018 4:06 pm

Hi all,
This my first personal post, so please let me know of any questions you need to assess this.
Thank you!

Emergency funds: Yes, 12 % holding is liquid/cash reserves.
Debt: None- I use CC to gain airline miles and pay balances monthly.
I pay a monthly rent, own my car.
Tax Filing Status: Single
Tax Rate: 15% Federal, 4.63% State
State of Residence: Colorado
Age:55
Desired Asset allocation: 55-60% stocks /35-40% bonds
Desired International allocation: 20% of stocks
Size of your current total portfolio: low/mid six figures

Current retirement assets:

V.G, Taxable accts.
1% VFIAX ( 0.04%) VG 500 Index fund Adm shares
3% VFSUX (0.1% ) VG short-term investement grade Bond fund, Admiral shares
7% VBTLX ( 0.05 %) VG total bond market index fund, Admiral shares
6% VTABX ( 0.11%) VG total international Bond index fund, Admiral shares
13% VTIAX (0.11%) VG Total international stock index, Admiral shares
17% VTSAX ( 0.04%) VG Total Stock market index fund , Admiral shares
2% BRK-B- Berkshire Hathaway
8% BA Boeing stock ( inherited )

Traditional IRA at Vanguard
1% VFIDX ( 0.1%) VG intermed.-Term Investment Grade fund , Admiral Shares
2% VFIDX ( 0.1%) VG intermed.-Term Investment Grade fund , Admiral Shares

Roth IRAs at Vanguard
1% VFIDX ( 0.1%) VG intermed.-Term Investment Grade fund , Admiral Shares
IRA at Dodge & Cox funds
1% DODFX (0.63%) International stock fund
IRA at Mainstay funds
0.5 % ICEUX ( 0.95%) Mainstay ICAP international fund ( absolutely want to exchange this, but what & where to transfer that $?)
IRA at TRowe Price funds
1% PRMTX ( 0.78%) TRP Communications and Tech fund
IRA at Mairs and Power funds
1.5 % MAPOX Mairs and Power Balanced fund


IRAs at Fidelity
11% FDRXX Federal gov’t cash holdings ( 0.37%) ** this is money transferred from Contrafund in October to a CD which has matured 12/14/18.
2% FFTWX- Freedom 2025( 0.56%)
3% FCNTC - Fidelity Contrafund ( 0.74%)

1% (1%) Fundrise = crowdfund real estate investment
6% Etrade taxable Account Stocks ( For the sake of getting this out for review, I will break into allocations) -Large Cap = 62%
-International = 34%
-Cash = 2%
- other ( ENB) = 2%
12% = Cash/liquid holdings
Contributions
None since laid off in May 2018, but will be starting a part-time position in January which will cover most expenses..
Questions:

1.I am wanting ideas on where to re-invest the 11% FDRXX Federal gov’t cash holdings please. Due to the overlap with VG funds in existing portfolio, I transferred part of my Contrafund to the 3-mo. CD so as to research this further.
2. I’ve checked in with both Vanguard and Fidelity advisers, both of whom want me to move all holdings under their roof. After selling many of my funds/stocks through a VG adviser in June to “safer” and more balanced holdings, I did not want to have another tax hit this year.
I am now thinking of moving the individual IRAs( intact ) into the existing VG or fidelity accts. I like that Fidelity offers non-VG funds and their expenses ratios have been lowered as well..

What questions should I ask to find out which will be least expensive brokerage to keep these holdings & if this makes sense?

I had a small cap fund with VG, which advisers sold in 12/8 , and added to the existing Total stock index fund. Any thoughts on adding some amount of a small cap fund to my holdings for the long-term?

3. All comments/ideas are welcome for consideration. Easy to see I have quite the mix here and I’d appreciate input on moving forward. Although it may not be obvious, I do tend to buy and hold good companies for the long term. I’ve had the Contrafund since 2000, and I will keep holding that 3% that I did not transfer into the CD. For all of the IRAs I started, I did not put in the max contributions so unfortunate much of portfolio is taxable.

Thank you so much & Happy 2019!
Em

livesoft
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Joined: Thu Mar 01, 2007 8:00 pm

Re: Help updating portfolio for 2019.

Post by livesoft » Mon Dec 31, 2018 4:09 pm

I'd sell the Boeing stock especially if it has a loss or was inherited recently. If it has been held by you long-term and has a gain, then I would suggest donating it to charity.
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Peter Foley
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Location: Lake Wobegon

Re: Help updating portfolio for 2019.

Post by Peter Foley » Mon Dec 31, 2018 4:24 pm

Welcome!

Your should read the information on the Wiki regarding tax efficient fund placement. /www.bogleheads.org/wiki/Tax-efficient_fund_placement

Basically, you should be holding as much of your bond allocation in your tax deferred accounts as possible, hold stocks in your Roth account, and possibly a mix in your taxable account.

Personal opinion: You have way too many funds. Look at funds with losses or little gains in taxable and consolidate using fund placement as a guide. Positions of less than 5% are not large enough to affect portfolio return nor are they sufficiently large to add diversification. Get down to 2-3 stocks funds: Total US, total international, and small cap would be okay.

Vanguard, Fidelity and Schwab are all good choices. They all have low fees and good broad based index funds/ETFs.

Topic Author
CBgall
Posts: 10
Joined: Wed Dec 19, 2018 7:54 pm

Re: Help updating portfolio for 2019.

Post by CBgall » Sat Jan 12, 2019 12:15 am

Peter Foley,

My apologies for not responding! When I didn't get any reply notifications, I thought that my query had not been posted and now I see that I simply did not check the box that would have notified me of responses via email.
I appreciate the link regarding tax efficient fund placement, as well as the personal opinions. Experience and good advice is what I'm looking for here, so please do add any other ideas or opinions and now that I have the box checked, I will respond more quickly and be aware to check. What do you think about keeping holdings under different brokerages? The trick I am finding is that both VG and Fidelity advisers discuss my portfolio in isolation of the total holdings, as if they don't exist which makes balancing the total holdings cumbersome.

I agree that fewer holdings makes more sense, and I will look into that .
In the short-term, what ideas do you have for the 11% FDRXX Federal gov’t cash holdings ( 0.37%) , sitting in the settlement fund?
Add that to the VG total stock index fund? or ...?

Thank you again for taking the time to review and offer advice!

Em

Topic Author
CBgall
Posts: 10
Joined: Wed Dec 19, 2018 7:54 pm

Re: Help updating portfolio for 2019.

Post by CBgall » Sat Jan 12, 2019 12:36 am

Livesoft,

Again, my apology for not answering sooner!
I am hoping that I now have turned my notifications on~

"I'd sell the Boeing stock"...That's the tough part, livesoft. The emotional hold that stock has on me has been a little hard to cut, although I have sold about half of it over the last few years when it was doing great~
I am wondering how many investors hold equities with their funds, especially if they offer good dividends? I know I am not the only one wishing I had bought that one share of BRK.A when I thought to do it in 2000. Since Berkshire stock it is really a fund, what is the advantage of selling a great holding such as that?
Okay,but back to Boeing- it's probably a good idea to let go of more Boeing... : )

Thanks so much for your help,

EM

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Peter Foley
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Re: Help updating portfolio for 2019.

Post by Peter Foley » Sat Jan 12, 2019 8:54 pm

My personal preference would be to buy the total stock market as you suggested.

My experience with Schwab was that when I met in person with my assigned adviser I brought a summary of my 401k (457b) holdings. The recommendations I got then took those holdings into account. (The purpose of the meeting was Roth conversions and most of my tax deferred was not held by Schwab.) I'm not sure if that option exists at Fidelity or Vanguard.

Topic Author
CBgall
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Joined: Wed Dec 19, 2018 7:54 pm

Re: Help updating portfolio for 2019.

Post by CBgall » Sat Jan 12, 2019 9:24 pm

Okay, great. I will look at consolidating some more of these holdings into the VG total stock index fund.
Peter Foley wrote:
Sat Jan 12, 2019 8:54 pm
My experience with Schwab was that when I met in person with my assigned adviser I brought a summary of my 401k (457b) holdings. The recommendations I got then took those holdings into account. (The purpose of the meeting was Roth conversions and most of my tax deferred was not held by Schwab.) I'm not sure if that option exists at Fidelity or Vanguard.
The funny thing is that it was the advisers who added all of my existing holdings into their online sites for me ( VG and Fidelity), but when I asked for their input in composing a balanced portfolio, anything that was outside of their brokerage was excluded. Their 100% portfolio was not equal to mine. So, I have to get back with each of them and be more than clear on this.

I know that I need to read more posts on all of this as it could and is, a full-time job- luckily, I find it all very interesting. For the time being, I like having an adviser involved to some degree. I am concerned however, that they may be re balancing too frequently throughout the year( what is the norm on re-balancing?) and the taxes that will be incurred when this happens...Does my VG intermed.-Term Investment Grade fund , Admiral Shares really need to be included under adviser management? Under what circumstances would the advisers be adjusting these bond funds?

Thank you very much,
Em

lifeisinmirrors
Posts: 59
Joined: Fri Jul 06, 2018 6:15 pm

Re: Help updating portfolio for 2019.

Post by lifeisinmirrors » Sun Jan 13, 2019 8:37 am

You have way too many accounts. It's hard to even know what your asset allocation is.

If you want to work with an advisor, I would transfer everything to Vanguard and use their personal advisor service. Or transfer everything to Fidelity, but I can't see any point in having that many accounts. Just one taxable, one Roth, one traditional IRA should be enough.

Topic Author
CBgall
Posts: 10
Joined: Wed Dec 19, 2018 7:54 pm

Re: Help updating portfolio for 2019.

Post by CBgall » Sun Jan 13, 2019 12:09 pm

lifeisinmirrors wrote:
Sun Jan 13, 2019 8:37 am
You have way too many accounts. It's hard to even know what your asset allocation is.
Thank you for the input- I'm seeing a recurring them here with a push to consolidate & streamline.
You're right, it is very tough to organize. Thank you.

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Peter Foley
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Re: Help updating portfolio for 2019.

Post by Peter Foley » Mon Jan 14, 2019 11:02 pm

Many here believe that rebalancing once a year is enough. There are a wide range of opinions. One approach is to only rebalance when your asset allocation is off by 5% between stocks and bonds. That is the approach I follow.

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mhadden1
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Re: Help updating portfolio for 2019.

Post by mhadden1 » Tue Jan 15, 2019 1:48 am

lifeisinmirrors wrote:
Sun Jan 13, 2019 8:37 am
Just one taxable, one Roth, one traditional IRA should be enough.
And, with a little attention, probably hold only one or two different funds in each account. Much more intelligible. If you get a paper statement (I don't) it's half a page.
Oh I can't, can I? That's what they said to Thomas Edison, mighty inventor, Thomas Lindberg, mighty flyer,and Thomas Shefsky, mighty like a rose.

Topic Author
CBgall
Posts: 10
Joined: Wed Dec 19, 2018 7:54 pm

Re: Help updating portfolio for 2019.

Post by CBgall » Thu Jan 17, 2019 12:54 am

Peter Foley wrote:
Mon Jan 14, 2019 11:02 pm
Many here believe that rebalancing once a year is enough. There are a wide range of opinions. One approach is to only rebalance when your asset allocation is off by 5% between stocks and bonds. That is the approach I follow.
Hi Peter,
I am wondering what this re-balancing would look like and how it would be done most tax efficiently? Every time a re-balance occurs, there is a tax consequence, yes? What is the benefit of making changes so frequently? I consider the shares of Contrafund that I transferred from my IRA to a 3-month CD back in October, a form of re-balancing. I just wasn't sure where to put it, so it is just sitting at the moment. However, I have not yet contributed to my Roth IRA for 2018 and I can also start funding an HSA account now that I have a qualifying high deductible health plan.
Thank you.

Topic Author
CBgall
Posts: 10
Joined: Wed Dec 19, 2018 7:54 pm

Re: Help updating portfolio for 2019.

Post by CBgall » Thu Jan 17, 2019 1:26 am

mhadden1 wrote:
Tue Jan 15, 2019 1:48 am
lifeisinmirrors wrote:
Sun Jan 13, 2019 8:37 am
Just one taxable, one Roth, one traditional IRA should be enough.
And, with a little attention, probably hold only one or two different funds in each account. Much more intelligible. If you get a paper statement (I don't) it's half a page.
Lifeisinmirrors,
I had a meeting meeting with my adviser recently and we spoke of moving to a stock/bond portfolio of 65%/35% which I'm comfortable having, and with US larg caps= 29%, mid/sm caps 12%/International 24%. Suggestions included adding these holdings ( below) as well as adding to my existing holdings such as VG total stock index and the total International index funds so as to reach these stock/bond ratios.
As many have pointed out already, I may be spread too thin with so many holdings, many of which overlap as well. I know that all of these options are paralyzing me- so I guess I need to take a first step and start consolidating one at a time.
Thanks for the note : )

Vanguard Growth Index Fund Admiral Shares
Vanguard High Dividend Yield Index Fund Investor Shares
Vanguard Extended Market Index Fund Admiral Shares

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Peter Foley
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Re: Help updating portfolio for 2019.

Post by Peter Foley » Fri Jan 18, 2019 7:53 pm

Only rebalancing in taxable accounts result in a taxable event. Many investors rebalance only (or primarily) in tax deferred accounts or Roths so as to avoid taxable events. Note: wash sales may be an issue with tax deferred and Roth but that is beyond the question being asked.

Topic Author
CBgall
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Joined: Wed Dec 19, 2018 7:54 pm

Re: Help updating portfolio for 2019.

Post by CBgall » Sun Jan 20, 2019 12:57 am

Peter Foley wrote:
Fri Jan 18, 2019 7:53 pm
Only rebalancing in taxable accounts result in a taxable event.
Thanks for your response, Peter.
With the majority of my holdings sitting in taxable accounts, how would you suggest moving and consolidating these in the most tax efficient way, and over what time frame please?

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Peter Foley
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Re: Help updating portfolio for 2019.

Post by Peter Foley » Sun Jan 20, 2019 4:04 pm

CBgall wrote:
V.G, Taxable accts.
1% VFIAX ( 0.04%) VG 500 Index fund Adm shares
3% VFSUX (0.1% ) VG short-term investement grade Bond fund, Admiral shares
7% VBTLX ( 0.05 %) VG total bond market index fund, Admiral shares
6% VTABX ( 0.11%) VG total international Bond index fund, Admiral shares
13% VTIAX (0.11%) VG Total international stock index, Admiral shares
17% VTSAX ( 0.04%) VG Total Stock market index fund , Admiral shares
2% BRK-B- Berkshire Hathaway
8% BA Boeing stock ( inherited )
Suggestions for moving and consolidating in taxable:

Since your small IRAs at Dodge and Cox and Mainstay hold stock funds, sell those and move the proceeds to Vanguard total bond fund. No tax consequences there.
In taxable, look at each holding to determine to what extent you have capital gains and losses. If you have been holding the S&P for only a short period you might have a capital loss there. You might also have a capital loss in international stock index as that has performed poorly in recent years. Sell a fund or two with losses and put the proceeds into Vanguard total stock market. As long as you offset any accounts with gains with equal sales with losses there will be no tax consequences. You should also do a little research to determine the cost basis (inherited) for the Boeing stock. It would be advisable to reduce or eliminate your position there.

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