Update: 35 y/o Portfolio Review (new to investing)

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
edward_2
Posts: 6
Joined: Sat Mar 09, 2019 9:54 am

Update: 35 y/o Portfolio Review (new to investing)

Post by edward_2 » Sat Mar 09, 2019 10:10 am

***4/12/19 UPDATE***

Thanks everyone for all the advice! I took a hard look at the dumpster fire that was my portfolio and made some changes...

1) I paid off my student loans! Psychologically it feels great to be debt free. Thank you all for giving me the courage/nudge to pay it off.
2) I sold off all my assets in Etrade, Betterment and Personal Capital and opened up a Vanguard account (more details below).
3) I opened up an online savings account (Marcus)

Getting rid of all these accounts and simplifying to a couple accounts has really lessened the stress. My goal now is to mimic a 3 Fund portfolio using my taxable and retirement funds with a 70/30 (equity/fixed income) split. I think i'm finally headed in the right direction.

I figured i double back and see if you have any more suggestions.
The available funds for my 401K/457b are listed below in my original post.

CURRENT RETIREMENT ASSETS

Cash + Investments, excluding Savings=481K

6.2% Cash: 30K

62.3% Brokerage Account (Vanguard) 300K
75% Vanguard Total MKT IDX (VTSAX) (0.04%)
25% Vanguard Total Intl MKT IDX (VTIAX) (0.11%)

29.1% 401K Fidelity (current employer) 140K
75% FID US BOND IDX (FXNAX) (0.045%)
25% FID 500 IDX (FXAIX) (0.015%)

1.0% 457b Fidelity (current employer) 5k
100% FID Total MKT IDX (FSKAX) (0.015%)

1.2% Roth IRA (Vanguard) 6k
100% Vanguard Total MKT IDX (VTSAX) (0.04%)

1) Are there any changes you'd make in my employer plans (401K, 457b)?
2) Given my late start to investing, is it crazy to increase my risk by changing my AA to 80/20?
3) It seems like people are split on dividend re-investment versus transferring to MM Fund. I'm leaning towards transferring to MM Fund so i can continue to adjust my AA. Is this too micromanaging? Should i just reinvest the dividends and readjust AA every 6 months with my 401K?
4) Roth IRA-thoughts on going 100% VTSAX? is there a better growth fund you'd all recommend?
5) Any other advice moving forward?

Thank you!

_____________________________________________________________________
ORIGINAL POST

Hi everyone! As a 35 year old, I am late to the game. I finished my medical residency in 2015 (when I was 32 years old). Prior, i was living paycheck to paycheck while deferring my student loans (125,000 in 2009 and ballooned to 180,000 in 2015). I was clueless in how to begin investing and am a little embarrassed with what I am about to share.

Over, the past 3 years, I started two small Betterment accounts, along with maxing out my 401K each year. I refinanced my student loans (6.8% to 3.2%). By the end of 2018, I had significant amount in my checking account and realized something had to change. In January 2019, at advice from a friend, I invested 200K into Personal Capital wealth management service (fee 0.89%). I felt good about it for a week until another colleague mentioned that even those fees seemed high.

Over the past month, I began to read more (especially on this forum and the recommended books) and now am wondering if I made a mistake. The idea of a 3 fund portfolio, or some variation of it, sounds like the strategy that best fits my personality and risk profile. My current portfolio appears disjointed without a clear direction.

I was wondering what are y’all thoughts about my situation and whether I should jump ship from personal capital and/or betterment.

Thanks so much in advance!

GENERAL INFO
Emergency Funds: I have 6 months of expenses in an online savings account
Debt: Student Loans 148K at 3.25% (SoFi), paying 2700/month
Tax Filing Status: Single
State of Residence: DC
State Income Tax: DC
Age: 35
Tax Rate: Federal (37%), State (8.95%)
Desired Asset Allocation: 70% Stock/30% Bond
Desired international allocation: 10-20% (Not sure- this is what I’ve read)
Current total portfolio (Cash+ Investments, excluding debt): 560K

Future Expenditures- I can see myself putting a down payment on a house in the next 3 years.

CURRENT RETIREMENT ASSETS

28.3%: Cash (100K avail for Investing)

6.8% Betterment Account #1 (38.3K, 70% stock/ 30% bond
38% Goldman Sachs Active Beta US Large-Cap (GSLC) (Fee 0.09%)
1.1% Vanguard Small Cap ETF (VB) (Fee 0.05%)
9.8% iShares Core MSCI EAFE ETF (IEFA) (Fee 0.09%)
11.7% Goldman Sachs Emerging Markets Equity (GEM) (Fee 0.37%)
9.6% iShares MSCI EAFE Small Cap ETF (SCZ) (Fee 0.33%)
0.5% iShares TIP ETF (TIP) (Fee 0.20%)
3.0% Goldman Sachs Treasury Access ETF (GBIL) (Fee 0.12%)
9.9% Vanguard Long Term Corporate Bond (VCLT)( Fee 0.07%)
0.8% Goldman Sachs Access Investment Grade Corporate ETF (GIGB) (Fee 0.14%)
2.4% Goldman Sachs Access High Yield Corporate Bond (GHYB) (Fee 0.34%)
5.7% iShares Emerging Markets USD Bond ETF (EMB) (Fee 0.40%)
7.2% Market Vectors JP Morgan EM Local Currency Bond (EMLC) (Fee 0.30%)

4.1% Betterment Account #2 (23.1K, 90% Stocks/ 10% Bonds)
32.3% Vanguard Total Stock Market ETF (VTI) (Fee 0.04%)
8.3% Vanguard Value ETF (VTV) (Fee 0.05%)
7.0% Vanguard Mid-Cap Value ETF (VOE) (Fee 0.07%)
5.9% iShares Russell 2000 Value ETF (IWN) (Fee 0.24%)
22.9% Schwab International Equity ETF (SCHF) (Fee 0.06%)
13.9% Vanguard FTSE Emerging Markets (VWO) (Fee 0.14%)
0.6% Vanguard Short Term Inflation Protected Securities ETF (VTIP) (Fee 0.06%)
1.1% iShares Core Total US Bond Market ETF (AGG) (Fee 0.05%)
3.7% iShares National AMT-Free Muni Bond ETF (MUB) (Fee 0.07%)
2.8% Vanguard Total International Bond ETF (BNDX) (Fee 0.09%)
1.5% iShares Emerging Markets USD Bond ETF (EMB) (Fee 0.40%)

35.7% Personal Capital (200K, 70% Stocks, 17% Bonds, 13% Alternatives)
ETFs (60%)
2.2% iShares Gold Trust ETF (IAU) (Fee 0.25%)
0.8% iShares Intl Treasury Bond ETF (IGOV) (Fee 0.12%)
2.5% Vanguard Global ex-US Real Estate Index ETF (VNQI) (Fee 0.14%)
4.9% Vanguard Tax-Exempt Bond Index Fund ETF (VTEB) (Fee 0.08%)
1.7% iShares iBoxx $ Investment Grade Corporation (LQD) (Fee 0.35%)
3.8% Vanguard REIT Index Fund ETF (VNQ) (Fee 0.12%)
2.0% iShares TIP Bond ETF (TIP) (Fee 0.19%)
0.8% Vanguard Total Bond Index ETF (BNDX) (Fee 0.09%)
2.3% iShares 3-7 Yr Treasury Bond ETF (IEI) (Fee 0.15%)
0.8% iShares 0-5 yr TIPS Bond ETF (STIP) (Fee 0.06%)
3.4% Vanguard Short Term Bond Index Fund EGTF (BSV) (Fee 0 .07%)
6.5% iShares Russell 2000 ETF (IWM) (Fee 0.19%)
13.6% Schwab International Equity ETF (SCHF) (Fee 0.06%)
2.7% Schwab US Small-Cap ETF (SCHA) (Fee 0.05%)
1.6% Vanguard Small-Cap Value Index Fund ETF (VBR)(Fee 0.07%)
1.9% Vanguard FTSE All-World ex US Small Cap ETF (VSS) (Fee 0.12%)
1.8% PowerShares DB Optimum Yield Diversified ETF (PDBC) (Fee 0.58%)
0.11% iShares 0-5 Yr High Yield Corporate Bond (SHYG) (Fee 0.30%)
5.8% Vanguard FTSE Emerging Markets Index Fund (VMO)

Stocks (40%) (each holding between $500-1000)
Costco (COST)
General Electric (GE)
Newmont Mining Corp (NEM)
Scotts Miracle-Gro Co (SMG)
Gilead Sciences Inc (GILD)
Portland General Electric Co (POR)
CVS Health Corp (CVS)
Southern Co (SO)
Duke Energy Corp (DUK)
Masco Corp (MAS)
Evergy Inc (EVRG)
Kraft Heinz Corp (KHC)
CMS Energy Corp (CMS)
United Health Group Inc (UNH)
Aqua America Inc (WTR)
3M Co (MMM)
Pinnacle West Capital Corp (PNW)
Eversource Energy (ES)
NextERA Energy Inc (NEE)
Verizon Comm (VA)
L3 Tech Inc (LLL)
DowDuPont Inc (DWDP)
Facebook (FB)
Citigroup ©
Apple (AAPL)
Southern Copper Corp (SCCO)
First Republic Bank (FRC)
AES Corp (AES)
Walmart (WMT)
AT&T (T)
Microsoft (MSFT)
Encompass Health Corp (EHC)
InterDigital Wireless Inc (IDCC)
JP Morgan Chase (JPM)
Colgate-Palmolive Co (CL)
Ecolab Inc (ECL)
Illinois Tool Works Inc (ITW)
American Tower Corp (AMT)
Owens Corning (OC)
Alphabet Inc (GOOG)
Johnson & Johnson (JNJ)
Procter & Gamble (PG)
Sysco Corp (SYY)
United Parcel Service (UPS)
Walt Disney Co (DIS)
Pilgrims Pride Corp (PPC)
Abbott Laboratories (ABT)
Intel Corp (INTC)
MasterCard Inc (MA)
Chevron Corp (CVX)
PPL Corp (PPL)
Berkshire Hathaway Inc (BRK.B)
Amazon.com (AMZN)
Amgen Inc (AMGN)
Salesforce.com (CRM)
Tyler Technologies (TYL)
Verisk Analytics (VRSK)
Pool Corp (POOL)
ONEOK Inc (OKE)
Comcast Corp (CMCSA)
Northern Trust Corp (NTRS)
InterActiveCorp (IAC)
Kinder Morgan (KMI)
Archer Daniels Midland (ADM)
TD Ameritrade Holding Corp (AMTD)
Ally Financial Inc (ALLY)
Home Depot (HD)
Dollar Tree 9DLTR)
Waste Management (WM)
Netflix (NFLX)
T-Mobile US (TMUS)
Coca-Cola (KO)
Valero Energy Corp (VLO)
Norfold Southern Corp (NSC)
Valvoline Inc (VVV)
Eastman Chemical Co (EMN)
Pfizer Inc (PFE)
Baker Hughes A GE Co (BHGE)
Marriott International (MAR)
Under Armour Inc (UA)
Exxon Mobil Corp (XOM)
Starbucks Corp (SBUX)
Albermarie Corp (ALB)
Nucor Corp (NUE)
Anadarko Petroleum Corp (APC)
Occidental Petroleum Corp (OXY)

0.2% E-trade
100% Citigroup (NYSE: C)

1.0% Roth IRA (Personal Capital)
60% VanEck Vectors JP Morgan EM Local Currency Bond ETF (EMLC) (Fee 0.3%)
40% iShares 0-5 Year High Yield Corporate Bond ETF (SHYG) (Fee 0.3%)

22.7% 401K Fidelity (current employer)
40% FID 500 Index (FXAIX) (0.015%)
25% FID US BOND IDX (FXNAX) (0.025%)
20% FID EXTD MKT IDX (FSMAX) (0.045%)
15% FID INTL INDEX (FSPSX) (0.045%)

0.3% 457b Fidelity (current employer)
60% FID Total MKT IDX (FSKAX) (0.015%)
10% FID INTL INDX (FSPSX) (0.045%)
20% FID US Bond IDX (FXNAX) (0.025%)
10 % FID Real Estate IDX (FSRNX) (0.07%)

Annual Contributions
19K 401K (+employer match 13.5K)
19K 457b
* Our retirement does not allow non Roth aftertax contributions.
* I do not know about in-plan conversion to Roth or in-service non-hardship distribution, but i will call our representative to find out.
3.5K HSA (started this year)
5K IRA (w/ backdoor conversion to Roth IRA)



Available Funds
401 K
FID EXTD MKT IDX (FSMAX) (0.045%)
FID INTL INDEX (FSPSX) (0.045%)
JPMCB SR 2020 CF-A (0.42%)
JPMCB SR 2025 CF-A (0.42%)
JPMCB SR 2030 CF-A (0.42%)
JPMCB SR 2035 CF-A (0.43%)
JPMCB SR 2040 CF-A (0.42%)
JPMCB SR 2045 CF-A (0.43%)
JPMCB SR 2050 CF-A (0.43%)
JPMCB SR 2055 CF-A (0.57%)
JPMCB SR 2060 CF-A (0.57%)
JPMCB SR INCOME CF-A (0.43%)
FID US BOND IDX (FXNAX) (0.025%)
FID 500 INDEX (FXAIX) (0.015%)
ABF SM CAP VAL INST (AVFIX) (0.81%)
AF EUROPAC GROWTH R6 (RERGX) (0.49%)
AF WASH MUTL INV R6 (RWMGX) (0.29%)
AM CENT MID CAP VAL (0.62%)
FID GROWTH CO POOL (0.43%)
FID SMALL CAP GR K6 (FOCSX) (0.61%)
J H ENTERPRISE I (JMGRX) (0.75%)
JPM US EQUITY L (JMUEX) (0.6%)
FID PURITAN K (FPUKX) (0.45%)
FIAM CORE PLUS CL K (0.32%)
MIP II CL 2 (0.44%)

457b

JH SM CAP CORE A (JCCAX) 1.36%
ABDN US MLTCP EQ ISV (GXXIX) 1.03%
ABF SM CAP VAL INST (AVFIX) 0.81%
ALGER MIDCAP GRTH I (ALMRX) 1.34%
CB VALUE TR FI (LMVFX) 1.13%
FID DIVERSIFD INTL (FDIVX) 0.81%
FID DIVIDEND GR (FDGFX) 0.5%
FID EMEA (FEMEX) 1.34%
FID EMRG MKTS IDX (FPADX) 0.075%
FID EQ DIV INCOME (FEQTX) 0.62%
FID EVENT DRVN OPP (FARNX) 1.12%
FID EXTD MKT IDX (FSMAX) 0.045%
FID GLB COMDTY STK (FFGCX) 1.08%
FID GLB EX US IDX (FSGGX) 0.055%
FID GROWTH CO K (FGCKX) 0.76%
FID INTL ENH INDEX (FIENX) 0.59%
FID INTL GROWTH (FIGFX) 0.95% ]
FID INTL INDEX (FSPSX) 0.045%
FID INTL VALUE (FIVLX) 0.89%
FID LC CORE ENH INDX (FLCEX) 0.39%
FID LC GRO ENH INDX (FLGEX) 0.39%
FID LC VAL ENH INDX (FLVEX) 0.39%
FID MAGELLAN (FMAGX) 0.69%
FID MID CAP ENH INDX (FMEIX) 0.59%
FID MID CAP IDX (FSMDX) 0.025%
FID REAL ESTATE IDX (FSRNX) 0.07%
FID SM CAP ENH INDX (FCPEX) 0.64%
FID SM CAP IDX (FSSNX) 0.025%
FID TOTAL INTL EQ (FTIEX) 1.29%
FID TOTAL MKT IDX (FSKAX) 0.015%
MSIF INCEPTION A (MSSMX) 1.51%
FID ASSET MGR 30% (FTANX) 0.54%
FID ASSET MGR 40% (FFANX) 0.55%
FID ASSET MGR 60% (FSANX) 0.72%
JPM SMRTRET 2020 R6 (JTTYX) 0.47%
JPM SMRTRET 2025 R6 (JNSYX) 0.48%
JPM SMRTRET 2030 R6 (JSMYX) 0.49%
JPM SMRTRET 2035 R6 (SRJYX) 0.5%
JPM SMRTRET 2040 R6 (SMTYX) 0.51%
JPM SMRTRET 2045 R6 (JSAYX) 0.52%
JPM SMRTRET 2050 R6 (JTSYX) 0.52%
JPM SMRTRET 2055 R6 (JFFYX) 0.54%
JPM SMRTRET INC R6 (JSIYX) 0.45%
OAKMARK EQ & INC INV (OAKBX) 0.88%
FID INFL PR BD IDX (FIPDX) 0.05%
FID INTM TR BD IDX (FUAMX) 0.03%
FID LT TR BD IDX (FNBGX) 0.03%
FID LTD TERM BOND (FJRLX) 0.45%
FID SH DUR HIGH INC (FSAHX) 0.86%
FID ST TR BD IDX (FUMBX) 0.03%
FID US BOND IDX (FXNAX)0.025%
PIM TOTAL RT INST (PTTRX) 0.55%
ABF INTL EQUITY INV (AAIPX) 1.07%
AF EUROPAC GROWTH R6 (RERGX) 0.49%
AF WASH MUTL INV R6 (RWMGX) 0.29%
ALZGI NFJ SMCPVL ADM (PVADX) 1.16%
AM CEN LG CO VAL INV (ALVIX) 0.84%
AM CENT MD CP VAL R6 (AMDVX) 0.66%
AM CENT SM COMP INV (ASQIX) 0.86%
AM CENT ULTRA INV (TWCUX) 0.97%
AMG M C MID CAP I (MCMYX) 0.88%
AMG M SPECIAL EQ N (MGSEX) 1.41%
AMG REN LG CP GR I (MRLSX) 0.9%
ARTISAN INTL (ARTIX) 1.18%
ARTISAN MID CAP INV (ARTMX) 1.18%
BARON ASSET FUND (BARAX) 1.31%
BARON GROWTH (BGRFX) 1.29%
CALVERT EQUITY A (CSIEX) 1.01%
CALVERT MID-CAP A (CCAFX) 1.28%
COL ACORN SELECT I (ACTWX) 1.15%
CRM MID CAP VAL INV (CRMMX) 1.12%
DOMINI IMPACT EQ INV (DSEFX) 1.06%
DREY RESEARCH GRTH A (DWOAX) 1.14%
DWS CROCI EQ DIV A (KDHAX) 1.03%
DWS CROCI INTL S (SCINX) 0.9%
DWS GLB SM CAP S (SGSCX) 1.14%
FID 500 INDEX (FXAIX) 0.015%
FID BLUE CHIP GR (FBGRX) 0.72%
FID BLUE CHIP VALUE (FBCVX) 0.7%
FID CANADA (FICDX) 0.89%
FID CAPITAL APPREC (FDCAX) 0.54%
FID CHINA REGION (FHKCX) 0.96%
FID CONTRAFUND (FCNTX) 0.82%
FID DISCIPLND EQTY (FDEQX) 0.53%
FID EMERG MKTS DISC (FEDDX) 1.22%
FID EMERGING ASIA (FSEAX) 1.02%
FID EMERGING MKTS (FEMKX) 0.96%
FID EQUITY INC (FEQIX) 0.63%
FID EUROPE (FIEUX) 0.96%
FID EXPORT & MULTI (FEXPX) 0.74%
FID FIDELITY FUND (FFIDX)0.5%
FID FOCUSED STOCK (FTQGX)0.82%
FID GLOBAL EQ INCOME (FGILX) 1.06%
FID GROWTH & INC (FGRIX) 0.61%
FID GROWTH DISC (FDSVX) 0.74%
FID GROWTH STRAT (FDEGX) 0.59%
FID INDEPENDENCE (FDFFX) 0.5%
FID INTL CAP APPREC (FIVFX) 1.06%
FID INTL DISCOVERY (FIGRX) 0.88%
FID INTL REAL ESTATE (FIREX) 1.05%
FID INTL SM CAP OPP (FSCOX) 1.11%
FID INTL SMALL CAP (FISMX) 1.2%
FID JAPAN (FJPNX) 1.05%
FID JAPAN SMALL CO (FJSCX) 0.94%
FID LARGE CAP STOCK (FLCSX) 0.67%
FID LATIN AMERICA (FLATX) 1.07%
FID LEVERGD CO STK (FLVCX) 0.78%
FID MEGA CAP STOCK (FGRTX) 0.68%
FID MID CAP STOCK (FMCSX) 0.61%
FID MID CAP VALUE (FSMVX) 0.69%
FID NASDAQ COMP INDX (FNCMX) 0.41%
FID NORDIC (FNORX) 0.98%
FID OTC PORTFOLIO (FOCPX) 0.88%
FID OVERSEAS (FOSFX) 0.97%
FID PACIFIC BASIN (FPBFX) 1.07%
FID REAL ESTATE INC (FRIFX) 0.75%
FID REAL ESTATE INVS (FRESX) 0.76%
FID SEL AIR TRANSPRT (FSAIX) 0.82%
FID SEL AUTOMOTIVE (FSAVX) 0.97%
FID SEL BANKING (FSRBX) 0.77%
FID SEL BIOTECH (FBIOX) 0.74%
FID SEL BROKERAGE (FSLBX) 0.79%
FID SEL CHEMICALS (FSCHX) 0.77%
FID SEL COMM EQUIP (FSDCX) 0.85%
FID SEL COMM SERV (FBMPX) 0.8%
FID SEL COMPUTERS (FDCPX) 0.79%
FID SEL CONS DISCR (FSCPX) 0.78%
FID SEL CONS STAPLES (FDFAX) 0.76%
FID SEL CONSTR/HOUSE (FSHOX) 0.8%
FID SEL CONSUMER FIN (FSVLX) 0.9%
FID SEL DEFENSE (FSDAX) 0.76%
FID SEL ENERGY (FSENX) 0.79%
FID SEL ENERGY SVCS (FSESX) 0.84%
FID SEL ENV ALT ENGY (FSLEX) 0.87%
FID SEL FINANCIAL (FIDSX) 0.77%
FID SEL GOLD (FSAGX) 0.86%
FID SEL HEALTHCARE (FSPHX) 0.73%
FID SEL HTH CARE SVC (FSHCX) 0.77%
FID SEL INDUSTRIALS (FCYIX) 0.77%
FID SEL INSURANCE (FSPCX) 0.79%
FID SEL IT SERVICES (FBSOX) 0.77%
FID SEL LEISURE (FDLSX) 0.77%
FID SEL MATERIALS (FSDPX) 0.79% .
FID SEL MED TECH&DV (FSMEX) 0.76%
FID SEL NATURAL GAS (FSNGX) 0.89%
FID SEL NATURAL RES (FNARX) 0.83%
FID SEL PHARMACEUTCL (FPHAX) 0.81%
FID SEL RETAILING (FSRPX) 0.78%
FID SEL SEMICONDUCT (FSELX) 0.75%
FID SEL SOFTWARE (FSCSX) 0.73%
FID SEL TECHNOLOGY (FSPTX) 0.75%
FID SEL TELECOMM (FSTCX) 0.82%
FID SEL TRANSPORT (FSRFX) 0.8%
FID SEL UTILITIES (FSUTX) 0.78%
FID SEL WIRELESS (FWRLX) 0.83%
FID SM CAP DISCOVERY (FSCRX) 0.69%
FID SMALL CAP GROWTH (FCPGX) 1.02%
FID SMALL CAP STOCK (FSLCX) 0.82%
FID SMALL CAP VALUE (FCPVX) 0.91%
FID STK SEL ALL CAP (FDSSX) 0.69%
FID STK SEL MID CAP (FSSMX) 0.77%
FID STK SEL SM CAP (FDSCX) 0.68%
FID STKSEL LGCAP VAL (FSLVX) 0.73%
FID TELECOM & UTIL (FIUIX) 0.55%
FID TOTAL EMERG MKTS (FTEMX) 1.13%
FID TREND (FTRNX) 0.67%
FID VALUE (FDVLX) 0.59%
FID VALUE DISCOV (FVDFX) 0.69%
FID VALUE STRAT (FSLSX) 0.63%
FID WORLDWIDE (FWWFX) 0.94%
FKLN MTL GLB DISC A (TEDIX) 1.21%
FKLN MTL SHARES A (TESIX) 1.03%
FKLN SMMIDCAP GRTH A (FRSGX) 0.95%
INVS AM FRANCHISE A (VAFAX) 1.01%
INVS COMSTOCK A (ACSTX) 0.82%
INVS GLB SMMDCP GR A (AGAAX) 1.37%
INVS GRTH & INC A (ACGIX) 0.8%
INVS MDCP CORE EQ A (GTAGX) 1.28%
INVS MID CAP GRTH A (VGRAX) 1.17%
INVS VALUE OPPS A (VVOAX) 1.22%
J H ENTERPRISE I (JMGRX) 0.75%
JPM US EQUITY L (JMUEX) 0.6%
LD ABT MID CAP STK P (LMCPX) 1.15%
LOOMIS SM CAP VAL R (LSCRX) 1.2%
MSIF DISCOVERY I (MPEGX) 0.72%
MSIF EMERGING MKTS A (MMKBX) 1.4%
MSIF GLB FRANCHISE A (MSFBX) 1.21%
MSIF GROWTH A (MSEGX) 0.89%
MSIF INTL EQUITY A (MIQBX) 1.31%.
NB FOCUS TRUST (NBFCX) 1.1%
NB GUARDIAN TRUST (NBGTX)1.06%
NB LG CAP VAL TR (NBPTX) 1.06%
NB SUSTAIN EQ TR (NBSTX) 1.02%
OAKMARK FUND INV (OAKMX) 0.89%
TCW SELECT EQUITY N (TGCNX)1.05%
TEMPLETON DEV MKTS A (TEDMX) 1.53%
TEMPLETON FOREIGN A (TEMFX) 1.15%
TEMPLETON GROWTH A (TEPLX) 1.03%
TEMPLETON WORLD A (TEMWX) 1.05%
TMPL GLB SMALL CO A (TEMGX) 1.33%
VRS SMALL CAP GRTH A (RSEGX) 1.45%
CALVERT BALANCED A (CSIFX) 0.96%
FID ASSET MGR 50% (FASMX) 0.65%
FID ASSET MGR 70% (FASGX) 0.71%
FID ASSET MGR 85% (FAMRX) 0.73%
FID BALANCED (FBALX) 0.53%
FID CONVERTIBLE SEC (FCVSX) 0.46%
FID FOUR IN ONE IDX (FFNOX) 0.13%
FID PURITAN K (FPUKX) 0.45%
FID STRAT DIV & INC (FSDIX) 0.72%
FID STRAT REAL RET (FSRRX) 0.83%
MSIF GLOBAL STRAT A (MBAAX) 1.09%
AMG M LS BOND N (MGFIX) 0.7%
COL INCOME OPPS I (CIOZX) 0.79%
FID CAPITAL & INCOME (FAGIX) 0.67%
FID CONSV INC BD (FCONX) 0.4%
FID CORPORATE BOND (FCBFX) 0.45%
FID FLOAT RT HI INC (FFRHX) 0.69%
FID FOCUSED HIGH INC (FHIFX) 0.8%
FID GLB HIGH INCOME (FGHNX) 1.02%
FID GLOBAL CREDIT (FGBFX) 1.18%
FID GNMA (FGMNX) 0.45%
FID HIGH INCOME (SPHIX) 0.7%
FID INTERMED BOND (FTHRX) 0.45%
FID INTM GOVT INCOME (FSTGX) 0.45%
FID INVST GR BD (FBNDX) 0.45%
FID MORTGAGE SEC (FMSFX) 0.45%
FID NEW MARKETS INC (FNMIX) 0.84%
FID STRATEGIC INCOME (FADMX) 0.69%
FID TOTAL BOND (FTBFX) 0.45%
FIDELITY GOVT INCOME (FGOVX) 0.45%
MSIF CP FX INC A (MFXAX) 1.02%
PIM GLB BD OP UH ADM (PADMX) 0.9%
PIMCO HIGH YIELD ADM (PHYAX) 0.82%
PIMCO LT US GOVT ADM (PLGBX) 1.025%
TMPL GLOBAL BOND A (TPINX) 1.03%
VANG TOT BD MKT INST (VBTIX) 0.04%
WA CORE BOND FI (WAPIX) 0.82%


Questions

1. Should I get out of my betterment/personal capital fund? I feel like after reading everything, i could do all they are doing (Minus the tax loss harvesting) with less fees?

2. Regardless of question #1, my next step is to create a Vanguard 3 fund portfolio with my available cash. What recommendations do you have in terms of how to invest the cash as well as my current allocations?

3. How aggressive should I be paying off my student loans? I don't like the idea of debt but if our goal is to beat 3.5%, it seems like paying the minimum and investing the rest is the right strategy.

4. Should I be using the backdoor Roth IRA and contributing every year?

5. My company also offers a Roth 401K. I’m not sure whether this is more advantageous for me or not. I do not anticipate my salary increasing too much more in the near future.

6. Is there anything else I should be asking or doing?

Thank you all!

Eddie
Last edited by edward_2 on Sat Apr 13, 2019 2:58 pm, edited 5 times in total.

pward
Posts: 393
Joined: Fri Dec 21, 2018 8:18 pm

Re: 35 y/o Portfolio Review (new to investing)

Post by pward » Sat Mar 09, 2019 10:26 am

1) I would. You could do the same thing the are doing cheaper by cutting them out. Also, it would greatly simplify things, as you've got quite a monstrosity of different accounts and holdings. Tax loss harvesting is also very simple to do yourself, you don't need an algorithm to do it for you.

2) Asset allocation is a deeply personal decision, so I don't think anyone here can direct you how to invest for your unique situation. But you can look at a ton of different stats for some very popular model portfolios here and use that to help guide you in your decisions: https://portfoliocharts.com/portfolios/

3) That's an awful large amount of student loans. If you had 20 or 30k at that low of an interest rate I would potentially consider investing and ignoring them. But 100k+, I would personally pay them down. That's a lot of money you're flushing down the toilet in interest. Not to mention the hassle involved in maintaining that amount of student loans. Life would just be much easier without them, imo. Not to mention, most people are predicting investing returns across the board to be lower the next 10 years than they were the last 10 years, so there is a possibility that you may wind up getting a better return by paying those down than by investing over the next few years. Anything can happen, but that certainly is a possibility. If nothing else, it's very difficult to find a high quality bond with a guaranteed 3.5% return right now like you would get from paying the loans down.

4) If you're maxing out all of your other retirement accounts, then yes this helps. Though you may want to worry about #3 first.

5) No. You are too high of a tax bracket. It makes no sense to pre-pay tax with that high of an income. Go 100% traditional.

6) Read and research as much as you can.

Flyer24
Moderator
Posts: 1215
Joined: Sun Apr 08, 2018 4:21 pm

Re: 35 y/o Portfolio Review (new to investing)

Post by Flyer24 » Sat Mar 09, 2019 10:52 am

Why did you invest $200K instead of just paying off the massive student loan? You could be debt free right now.

siriusblack
Posts: 104
Joined: Mon Dec 24, 2018 3:50 pm

Re: 35 y/o Portfolio Review (new to investing)

Post by siriusblack » Sat Mar 09, 2019 11:12 am

edward_2 wrote:
Sat Mar 09, 2019 10:10 am
3. How aggressive should I be paying off my student loans? I don't like the idea of debt but if our goal is to beat 3.5%, it seems like paying the minimum and investing the rest is the right strategy.
If I were in your shoes, I would knock out the debt as quickly as possible. However, everyone here will have a slightly different philosophy on debt. Odds are that you'll be fine by paying the minimum and investing the difference... however, there are a number of factors to consider:

1. Behaviorally, will you DEFINITELY invest the difference? (If you would spend any of it instead, you might be better off knocking out the debt first.)

2. It's possible (even over a 10 or 20 period) for investment returns to be below 3.5%. Not likely ... but possible.

3. It's hard to beat the psychological benefit of being 100% debt free. For me, becoming 100% debt free gave me a different perspective on career options. I became willing to take more challenging and risky roles ... and ultimately this turned out to be a benefit.

Topic Author
edward_2
Posts: 6
Joined: Sat Mar 09, 2019 9:54 am

Re: 35 y/o Portfolio Review (new to investing)

Post by edward_2 » Sat Mar 09, 2019 11:15 am

Thanks for the replies already! I appreciate everyone's input.

I am definitely considering moving my assets to a taxable DIY account.

I spoke with some people about paying off my loans now versus investing. The rationale i was given was that my interest rate was low enough that i should start investing first. That's why i gave the money to Personal Capital.

I still have available funds now to begin aggressively paying off my loans. I just wasn't sure what the right strategy is (knowing we can't predict future returns).

Thanks!

grettman
Posts: 466
Joined: Mon Sep 29, 2014 1:47 pm

Re: 35 y/o Portfolio Review (new to investing)

Post by grettman » Sat Mar 09, 2019 11:20 am

I don’t know why you would invest on the hope of returning more than 3.25 percent in lieu of paying off loan with a guaranteed return of 3.25 percent.

User avatar
ruralavalon
Posts: 16737
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: 35 y/o Portfolio Review (new to investing)

Post by ruralavalon » Sat Mar 09, 2019 12:44 pm

Welcome to the forum :)

edward_2 wrote:
Sat Mar 09, 2019 10:10 am
Age: 35
Tax Rate: Federal (37%), State (8.95%)
Desired Asset Allocation: 70% Stock/30% Bond
Desired international allocation: 10-20% (Not sure- this is what I’ve read)
In mutilation your desired 70/30 equity/fixed income,allocation is,within the range of what is reasonable for age 35.

I usually suggest around 20-30% of stocks in international stocks. In your 401k have 20% of stocks in international stocks, which I think is reasonable. Historically 20% of stocks in international stocks would have captured about 85% of the maximum diversification benefit. Vanguard paper "Considerations for Investing in Non-U.S Equities", p. 6.

edward_2 wrote:
Sat Mar 09, 2019 10:10 am
1. Should I get out of my betterment/personal capital fund? I feel like after reading everything, i could do all they are doing (Minus the tax loss harvesting) with less fees?
In my opinion, yes. You can do what they do, with less fee and greater simplicity.

Unwinding those very complicated accounts usually involve issues of income tax liability for any unrealized capital gains. This is especially true with your high tax rate -- "Tax Rate: Federal (37%), State (8.95%)".

To what State do you pay the State income tax?

Can you tell us the unrealized capital gain/loss status of each investment in those accounts?

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.

edward_2 wrote:
Sat Mar 09, 2019 10:10 am
2. Regardless of question #1, my next step is to create a Vanguard 3 fund portfolio with my available cash. What recommendations do you have in terms of how to invest the cash as well as my current allocations?
In my opinion a three fund portfolio is a good idea, it gives very broad diversification (to decrease risk) and very low expense ratios (to increase net return).

It's often better to coordinate investments among all accounts, treating all accounts together as a single unified portfolio, rather than treat each account separately. Don't try to put all elements of your asset allocation in each account.

This allows you to avoid having to use any sub par or high expense funds in a work-based account, and allows you to achieve to achieve good tax-efficiency in your taxable brokerage account.

Start fund selection by choosing to use only the best funds offered in the work-based accounts where the choices are limited, and then complete the asset allocation using the nearly unlimited choices available in an IRA or taxable brokerage account.

In your 401k and 457b accounts Fidelity® International Index (FSPSX) is not fully diversified, it is not a total international stock index fund. It omits emerging markets, Canada, and small companies. In my opinion the omissions of emerging markets and Canada are both important omissions.

Are there any other international stock index funds offered in your 401k and 457b plans? Again, you can simply add this to your original post using the edit button (the pencil icon near the upper right corner of your post).

In my opinion the other funds you are using in your 401k and 457 accounts are excellent choices, being:
FID Total MKT IDX (FSKAX) (0.015%)
FID EXTD MKT IDX (FSMAX) (0.045%)
FID Real Estate IDX (FSRNX) (0.07%)
FID US Bond IDX (FXNAX) (0.025%)

Bond funds and REIT funds are not very tax-efficient, and ordinarily should not be held in a taxable brokerage account. Instead they should be held in a tax-advantaged account, bonds preferably in a tax-deferred account like your 401k and 457b accounts. Please see the wiki article "Tax-efficient Fund Placement".

Vanguard index funds are more tax-efficient than funds of other providers, so I suggest that a new taxable brokerage account be opened at Vanguard.

In a taxable brokerage account use very tax-efficient stock index funds. Please see the wiki article "Tax-efficient Fund Placement". Examples include:
1) Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) or ETF version (VTI) ER 0.04%; and
2) Vanguard Total Stock Market Index Fund Admiral Shares (VTIAX) or ETF version (VXUS) ER 0.11%
My own personal preference is for the traditional mutual funds, rather than the Exchange Traded Funds (ETFs)

To make portfolio management and rebalancing easy it's often better to have at least one large tax-advantaged account which contains all asset types being used. In your case that would be the 401k and 457b accounts.

edward_2 wrote:
Sat Mar 09, 2019 10:10 am
3. How aggressive should I be paying off my student loans? I don't like the idea of debt but if our goal is to beat 3.5%, it seems like paying the minimum and investing the rest is the right strategy.
Please see the wiki article "Prioritizing Investments".

I generally favor accelerated pay off the debt ("Student Loans 148K at 3.25%") ahead of investing in a taxable brokerage account.

In my opinion maximum annual contributions to the tax-advantaged accounts are a priority over accelerated pay off of the debt..

edward_2 wrote:
Sat Mar 09, 2019 10:10 am
4. Should I be using the backdoor Roth IRA and contributing every year?


5. My company also offers a Roth 401K. I’m not sure whether this is more advantageous for me or not. I do not anticipate my salary increasing too much more in the near future.
Yes, you should probably be using a backdoor Roth IRA.

I see that your work-based plans allow Roth contributions.

There is also an idea called the Mega Backdoor Roth.

Do the 401k or 457b plans also allow non-Roth after tax contributions? Do those plans allow in-plan conversions to Roth? Do those plans allow in-service non-hardship distributions?

Again, you can simply add this information to your original post using the edit button (the pencil icon near the upper right corner of your post).

edward_2 wrote:
Sat Mar 09, 2019 10:10 am
6. Is there anything else I should be asking or doing?
If you have not done so already, spend some time reading on www.whitecoatinvestor.com.

Please Google the TFB blog post "The Elusive Mega Backdoor Roth".

I suggest that you read one or two books on general investing. Please see the wiki article Books: Recommendations and Reviews".
Last edited by ruralavalon on Sat Mar 09, 2019 1:29 pm, edited 2 times in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

User avatar
Misenplace
Moderator
Posts: 1273
Joined: Mon Feb 01, 2016 9:46 pm

Re: 35 y/o Portfolio Review (new to investing)

Post by Misenplace » Sat Mar 09, 2019 1:24 pm

Welcome to the forum and congratulations. You are in great shape, and not at all that behind.

You have already gotten good advice. I write to add a few more comments, and to reinforce the rest.

Your Personal Capital and Betterment portfolios are a hot mess. First, at your high income, you do not want bond funds in your taxable accounts since you will pay taxes on all the income that they throw off at your highest rates. You also don't want actively managed funds in your taxable accounts because they throw off a lot of non-qualified dividends and capital gains that are also taxed at your highest rates.
https://www.bogleheads.org/wiki/Tax-eff ... _placement

As for your large collection of individual stocks, they are a nightmare waiting to happen. You will need to track the basis in everything. If they split or merge or spinoff, you will need to track that basis. You will need to monitor whether any of those corporate events is a taxable event (e.g., merge with a foreign corp.) and whether you have to recognize it that year. You are just asking for a giant headache that you don't need because you can get the full diversification effect (more than what you have) with just a tax efficient index fund. I would dump all the ones that are in the red IMMEDIATELY, and then dump as many as the stocks that are in the green to equal what you sold as a loss. Then, over time dump the rest or donate highly appreciated shares to a charity or your own Donor Advised Fund.
edward_2 wrote:
Sat Mar 09, 2019 10:10 am
1.0% Roth IRA (Personal Capital)
60% VanEck Vectors JP Morgan EM Local Currency Bond ETF (EMLC) (Fee 0.3%)
40% iShares 0-5 Year High Yield Corporate Bond ETF (SHYG) (Fee 0.3%)
Since Roth money is never going to be taxed again, it's generally recommended that you invest it in assets that have the highest potential return. That would be equities. Not Bonds.
edward_2 wrote:
Sat Mar 09, 2019 10:10 am
22.7% 401K Fidelity (current employer)
40% FID 500 Index (FXAIX) (0.015%)
25% FID US BOND IDX (FXNAX) (0.025%)
20% FID EXTD MKT IDX (FSMAX) (0.045%)
15% FID INTL INDEX (FSPSX) (0.045%)

0.3% 457b Fidelity (current employer)
60% FID Total MKT IDX (FSKAX) (0.015%)
10% FID INTL INDX (FSPSX) (0.045%)
20% FID US Bond IDX (FXNAX) (0.025%)
10 % FID Real Estate IDX (FSRNX) (0.07%)

Annual Contributions
19K 401K (+employer match 13.5K)
19K 457b
3.5K HSA (started this year)
5K IRA (w/ backdoor conversion to Roth IRA)
Good choices in your 401K and 457. Good to plan to max them out. You can do 6K backdoor IRA starting this year 2019.
edward_2 wrote:
Sat Mar 09, 2019 10:10 am
Questions

1. Should I get out of my betterment/personal capital fund? I feel like after reading everything, i could do all they are doing (Minus the tax loss harvesting) with less fees?
Yes, get rid of them. They are costing you LOTS more in taxes, and there is the danger when you have unrelated entities doing TLH for you, that one hand doesn't know what the other is doing and you can create Wash Sales that only you would know about and need to track. Why would you want to pay someone to do this and create headaches for you.

Once your portfolio is simple enough, you can do tax loss harvesting yourself if you have time and get bored.
edward_2 wrote:
Sat Mar 09, 2019 10:10 am
2. Regardless of question #1, my next step is to create a Vanguard 3 fund portfolio with my available cash. What recommendations do you have in terms of how to invest the cash as well as my current allocations?
See the Wiki on Getting Started. I would recommend starting with the three fund portfolio at Vanguard, and the Wiki shows you how.
https://www.bogleheads.org/wiki/Getting_started
https://www.bogleheads.org/wiki/Three-fund_portfolio
edward_2 wrote:
Sat Mar 09, 2019 10:10 am
3. How aggressive should I be paying off my student loans? I don't like the idea of debt but if our goal is to beat 3.5%, it seems like paying the minimum and investing the rest is the right strategy.
I think it can be argued either way, but lean towards paying them off. You are not getting any interest deduction at your income level, and it would simplify your life. In a few years, 148K will feel like a drop in the bucket.
edward_2 wrote:
Sat Mar 09, 2019 10:10 am
4. Should I be using the backdoor Roth IRA and contributing every year?
That's the only Roth money I would do at your rates.
edward_2 wrote:
Sat Mar 09, 2019 10:10 am
5. My company also offers a Roth 401K. I’m not sure whether this is more advantageous for me or not. I do not anticipate my salary increasing too much more in the near future.
Not at your rates.
edward_2 wrote:
Sat Mar 09, 2019 10:10 am
6. Is there anything else I should be asking or doing?
Read White Coat Investor. Read the Wiki.

Just as an aside, at your age, we had a negative net worth (300K mortgage and less than 100K in investments). But with a high income and high savings rate, it was easy to retire early at 55. You are already ahead of us.

Flyer24
Moderator
Posts: 1215
Joined: Sun Apr 08, 2018 4:21 pm

Re: 35 y/o Portfolio Review (new to investing)

Post by Flyer24 » Sat Mar 09, 2019 1:28 pm

edward_2 wrote:
Sat Mar 09, 2019 11:15 am
Thanks for the replies already! I appreciate everyone's input.

I am definitely considering moving my assets to a taxable DIY account.

I spoke with some people about paying off my loans now versus investing. The rationale i was given was that my interest rate was low enough that i should start investing first. That's why i gave the money to Personal Capital.

I still have available funds now to begin aggressively paying off my loans. I just wasn't sure what the right strategy is (knowing we can't predict future returns).

Thanks!
Would you borrow $200K right now in order to invest? I would hope your answer is no. Same rationale goes with investing while deep in debt. You don’t borrow to invest.

User avatar
Wiggums
Posts: 1961
Joined: Thu Jan 31, 2019 8:02 am

Re: 35 y/o Portfolio Review (new to investing)

Post by Wiggums » Sat Mar 09, 2019 1:41 pm

Flyer24 wrote:
Sat Mar 09, 2019 10:52 am
Why did you invest $200K instead of just paying off the massive student loan? You could be debt free right now.
+1

Also, you will want to simplify your portfolio before it gets any more complicated or has more gains in taxable. Also, you have so many small positions. You will be so happy with 3-4 funds that cost practically zero.

Good luck to you.

Topic Author
edward_2
Posts: 6
Joined: Sat Mar 09, 2019 9:54 am

Re: 35 y/o Portfolio Review (new to investing)

Post by edward_2 » Sat Mar 09, 2019 2:09 pm

Thank you everyone for your insight!
If only i waited a couple more weeks before investing with Personal Capital :oops:

I'll do my research and add more of my info to the original post.
Wiggums wrote:
Sat Mar 09, 2019 1:41 pm
Flyer24 wrote:
Sat Mar 09, 2019 10:52 am
Why did you invest $200K instead of just paying off the massive student loan? You could be debt free right now.
+1

Also, you will want to simplify your portfolio before it gets any more complicated or has more gains in taxable. Also, you have so many small positions. You will be so happy with 3-4 funds that cost practically zero.

Good luck to you.
With regards to my debt, thank you for explaining in terms i understand. Not the brightest when it comes to personal finance :(

But i am thankful for all of your help!

Topic Author
edward_2
Posts: 6
Joined: Sat Mar 09, 2019 9:54 am

Re: Update: 35 y/o Portfolio Review (new to investing)

Post by edward_2 » Fri Apr 12, 2019 6:54 pm

***4/12/19 UPDATE***

Thanks everyone for all the advice! I took a hard look at the dumpster fire that was my portfolio and made some changes...

1) I paid off my student loans! Psychologically it feels great to be debt free. Thank you all for giving me the courage/nudge to pay it off.
2) I sold off all my assets in Etrade, Betterment and Personal Capital and opened up a Vanguard account (more details below).
3) I opened up an online savings account (Marcus)

Getting rid of all these accounts and simplifying to a couple accounts has really lessened the stress. My goal now is to mimic a 3 Fund portfolio using my taxable and retirement funds with a 70/30 (equity/fixed income) split. I think i'm finally headed in the right direction.

I figured i double back and see if you have any more suggestions.
The available funds for my 401K/457b are listed below in my original post.

CURRENT RETIREMENT ASSETS

Cash + Investments, excluding Savings=481K

6.2% Cash: 30K

62.3% Brokerage Account (Vanguard) 300K
75% Vanguard Total MKT IDX (VTSAX) (0.04%)
25% Vanguard Total Intl MKT IDX (VTIAX) (0.11%)

29.1% 401K Fidelity (current employer) 140K
75% FID US BOND IDX (FXNAX) (0.045%)
25% FID 500 IDX (FXAIX) (0.015%)

1.0% 457b Fidelity (current employer) 5k
100% FID Total MKT IDX (FSKAX) (0.015%)

1.2% Roth IRA (Vanguard) 6k
100% Vanguard Total MKT IDX (VTSAX) (0.04%)

1) Are there any changes you'd make in my employer plans (401K, 457b)?
2) Given my late start to investing, is it crazy to increase my risk by changing my AA to 80/20?
3) It seems like people are split on dividend re-investment versus transferring to MM Fund. I'm leaning towards transferring to MM Fund so i can continue to adjust my AA. Is this too micromanaging? Should i just reinvest the dividends and readjust AA every 6 months with my 401K?
4) Roth IRA-thoughts on going 100% VTSAX? is there a better growth fund you'd all recommend?
5) Any other advice moving forward?

Thank you!
Last edited by edward_2 on Sat Apr 13, 2019 2:57 pm, edited 2 times in total.

User avatar
Misenplace
Moderator
Posts: 1273
Joined: Mon Feb 01, 2016 9:46 pm

Re: Update: 35 y/o Portfolio Review (new to investing)

Post by Misenplace » Sat Apr 13, 2019 12:29 am

Just wanted to say, welcome back, and you seem to have done an admirable job cleaning up your portfolio and setting yourself up for success. Others may chime in, but I promise to look more closely this weekend. It’s Friday night and I never give advice after :sharebeer .

User avatar
ruralavalon
Posts: 16737
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Update: 35 y/o Portfolio Review (new to investing)

Post by ruralavalon » Sat Apr 13, 2019 7:50 am

edward_2 wrote:
Fri Apr 12, 2019 6:54 pm
***4/12/19 UPDATE***

Thanks everyone for all the advice! I took a hard look at the dumpster fire that was my portfolio and made some changes...

1) I paid off my student loans! Psychologically it feels great to be debt free. Thank you all for giving me the courage/nudge to pay it off.
2) I sold off all my assets in Etrade, Betterment and Personal Capital and opened up a Vanguard account (more details below).
3) I opened up an online savings account (Marcus)

Getting rid of all these accounts and simplifying to a couple accounts has really lessened the stress. My goal now is to mimic a 3 Fund portfolio using my taxable and retirement funds with a 70/30 (equity/fixed income) split. I think i'm finally headed in the right direction.

I figured i double back and see if you have any more suggestions.
The available funds for my 401K/457b are listed below in my original post.

CURRENT RETIREMENT ASSETS

Cash + Investments, excluding Savings=481K

19.5% Cash: 30K

62.3% Brokerage Account (Vanguard) 300K
75% Vanguard Total MKT IDX (VTSAX) (0.04%)
25% Vanguard Total Intl MKT IDX (VTIAX) (0.11%)

29.1% 401K Fidelity (current employer) 140K
75% FID US BOND IDX (FNXAX) (0.045%)
25% FID 500 IDX (FXAIX) (0.015%)

1.0% 457b Fidelity (current employer) 5k
100% FID Total MKT IDX (FSKAX) (0.015%)

1.2% Roth IRA (Vanguard) 6k
100% Vanguard Total MKT IDX (VTSAX) (0.04%)

1) Are there any changes you'd make in my employer plans (401K, 457b)?
2) Given my late start to investing, is it crazy to increase my risk by changing my AA to 80/20?
3) It seems like people are split on dividend re-investment versus transferring to MM Fund. I'm leaning towards transferring to MM Fund so i can continue to adjust my AA. Is this too micromanaging? Should i just reinvest the dividends and readjust AA every 6 months with my 401K?
4) Roth IRA-thoughts on going 100% VTSAX? is there a better growth fund you'd all recommend?
5) Any other advice moving forward?

Thank you!
You have done an excellent job, congratulations.

In my opinion Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) is a good choice for your Roth IRA.

You have 41% fixed income (bonds + cash). I would not hold a large cash allocation, which will give a negative real return net of inflation and taxes.

I suggest automatic reinvestment of dividends in the tax-advantaged accounts.

In my opinion at age 35 a fixed income allocation (like bonds, CDs, cash, etc.) of 20% would be within the range of what is reasonable.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Topic Author
edward_2
Posts: 6
Joined: Sat Mar 09, 2019 9:54 am

Re: Update: 35 y/o Portfolio Review (new to investing)

Post by edward_2 » Sat Apr 13, 2019 2:31 pm

ruralavalon wrote:
Sat Apr 13, 2019 7:50 am
You have 41% fixed income (bonds + cash). I would not hold a large cash allocation, which will give a negative real return net of inflation and taxes.
Thanks for the response! I actually had the math wrong on my cash. It should read 6.2% (which i updated on the post) so my total fixed income is 28% but will certainly keep in mind to keep fixed income around 30-35%.

User avatar
Misenplace
Moderator
Posts: 1273
Joined: Mon Feb 01, 2016 9:46 pm

Re: Update: 35 y/o Portfolio Review (new to investing)

Post by Misenplace » Sat Apr 13, 2019 5:09 pm

Again, great job cleaning up the mess. I mostly agree with ruralavalon, but have a couple of points to make about the reinvesting dividends issue in case you decide to do tax loss harvesting (since in your initial post you seemed to want to do that- or at least that was the incentive for trying out the roboadvisors).

I also use VG Total MKT Index Admiral and VG Total Intl MKT Index admiral in my taxable accounts, and those are great choices (highly diversified, tax efficient, etc.). However, when the markets swoon, I tax loss harvest. If VG Total Intl Mkt Index swoons, I harvest the losses (usually short term) by exchanging them for VG FTSE All World Ex US index admiral fund. They follow different indices so are generally viewed as not substantially the same. Wait a couple of months, then switch back to VTIAX as long as there are not significant gains. You don't have any international funds in your retirement funds, so reinvested dividends there won't cause wash sale headaches. But you have similar total stock market funds in both taxable and retirement. For example, if VTSAX swoons, and you have short term losses to harvest, your reinvested dividends in your Roth will create wash sales and defeat tax loss harvesting attempts. Also, most folks use a S&P Index fund as a wash sale partner to VTSAX, but you have a fidelity fund following that same index in your 401k. Luckily, the Fidelity Total Market Indx in your 457 follows a different index (DJ US Total Stock Mkt Index) than VTSAX (the CRISP US index), so at least that won't cause a problem. I suppose that you could use the VG Large Cap Index or the VG Tax Managed Capital Appreciation funds in your taxable account as alternative TLH pairs to VTSAX.
https://www.bogleheads.org/wiki/Tax_loss_harvesting

There are a couple of other ways to deal with it. Either don't reinvest dividends in retirement accounts for funds that are duplicated (or could be included) in your taxable account. You could send those dividends to a bond fund within the retirement account. Or, you can hold different funds that would also follow different indices than the ones that you might want to tax loss harvest in your taxable. Oh, a third way is to periodically turn off reinvesting dividends in your retirement accounts when your spider sense tells you a stock market gyration is a month away (just kidding on this last alternative).
edward_2 wrote:
Fri Apr 12, 2019 6:54 pm
***4/12/19 UPDATE***

CURRENT RETIREMENT ASSETS

Cash + Investments, excluding Savings=481K

6.2% Cash: 30K

62.3% Brokerage Account (Vanguard) 300K
75% Vanguard Total MKT IDX (VTSAX) (0.04%)
25% Vanguard Total Intl MKT IDX (VTIAX) (0.11%)

29.1% 401K Fidelity (current employer) 140K
75% FID US BOND IDX (FXNAX) (0.045%)
25% FID 500 IDX (FXAIX) (0.015%)

1.0% 457b Fidelity (current employer) 5k
100% FID Total MKT IDX (FSKAX) (0.015%)

1.2% Roth IRA (Vanguard) 6k
100% Vanguard Total MKT IDX (VTSAX) (0.04%)

1) Are there any changes you'd make in my employer plans (401K, 457b)?
See above. I do think you have picked the best options that you have in each plan.
edward_2 wrote:
Fri Apr 12, 2019 6:54 pm
2) Given my late start to investing, is it crazy to increase my risk by changing my AA to 80/20?
No. 80/20 is appropriate for your age. 70/30 is rather conservative.
edward_2 wrote:
Fri Apr 12, 2019 6:54 pm
3) It seems like people are split on dividend re-investment versus transferring to MM Fund. I'm leaning towards transferring to MM Fund so i can continue to adjust my AA. Is this too micromanaging? Should i just reinvest the dividends and readjust AA every 6 months with my 401K?
See above- in your situation, I would send dividends to a bond fund in both retirement and taxable accounts.
edward_2 wrote:
Fri Apr 12, 2019 6:54 pm
4) Roth IRA-thoughts on going 100% VTSAX? is there a better growth fund you'd all recommend?
VTSAX is a great choice for a Roth, but as noted above is a problem should you want to harvest losses. Perhaps VG Total World Index Admiral. It's pretty new, but 100% global equities (both US and ex-US).
edward_2 wrote:
Fri Apr 12, 2019 6:54 pm
5) Any other advice moving forward?
You are doing great. Make sure you have disability and liability insurance. Once you have dependents, make sure you have term life insurance.

Post Reply