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rmjordan
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Post by rmjordan » Tue May 14, 2019 4:48 pm

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Last edited by rmjordan on Wed May 22, 2019 3:18 pm, edited 2 times in total.

mega317
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Re: 30 years old, What should I do with all this cash?

Post by mega317 » Tue May 14, 2019 5:14 pm

Welcome to the forum.
I suggest you edit your post to conform to the format in the "asking portfolio questions" thread. Specifically you will need to give fund names and expense ratios--most people won't know what those are.

One thing I think you need to ask yourself is WHY do you want "something else"? Which will really just be a different concentration of something you already have since you have broad market funds. If you have a reasoned answer for what "something else" will do you for, then by all means. You might not be able to answer that without a critical assessment of your goals. Which you may have already done but not put in your post.

272 Sheep
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Re: 30 years old, What should I do with all this cash?

Post by 272 Sheep » Tue May 14, 2019 5:24 pm

Welcome to forum.
Do you fully fund your Roth IRA every year?
Do you have cash outside of what you have shown?
If not, you might put some in a money market fund, for emergencies, future purchases etc.
Carl W

mortfree
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Re: 30 years old, What should I do with all this cash?

Post by mortfree » Tue May 14, 2019 6:24 pm

I saw you listed 529. Do you have kids?

Do you have adequate term life insurance?

If you feel like you have too much cash and don’t want a total stock fund, why not just get a S&P 500 fund?

What is your debt situation other than the rental property?

Do you have your own home and is it due for any updates or upgrades ?

megabad
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Re: 30 years old, What should I do with all this cash?

Post by megabad » Tue May 14, 2019 9:27 pm

rmjordan wrote:
Tue May 14, 2019 4:48 pm
I prefer low-cost funds that I can invest in and forget. My initial thought was to put money into VTSAX, but I already have such a large allocation into funds tracking the broad market, that I started thinking it might be a good idea to look into something else.

I'd be grateful to hear of any other ideas that people have. I'm 30 and looking for something low cost that isn't overly specific to a certain sector.
You stated you think it would be a good idea to invest in something other than the stock market. You have essentially zero fixed income. I might considering starting a small holding in a low cost bond index. This would increase your portfolio diversity and isn't necessarily specific to a certain sector.

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rmjordan
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Re: 30 years old, What should I do with all this cash?

Post by rmjordan » Wed May 15, 2019 10:09 am

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lakpr
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Re: 30 years old, What should I do with all this cash?

Post by lakpr » Wed May 15, 2019 10:22 am

I will echo the suggestion from a previous poster that you seem to be 100% into equities funds, and you should have some bonds exposure to reduce the volatility in your portfolio. I suggest VBIIX, intermediate term bond fund. Keep contributing your extra cash to it until it becomes 15 to 20% of your overall portfolio. Age -10 to Age -15 is the suggested bond fund allocation in one’s portfolio.

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flossy21
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Re: 30 years old, What should I do with all this cash?

Post by flossy21 » Wed May 15, 2019 10:49 am

You're doing a great job at such a young age. Many of us wish we had discovered this forum sooner in our lives so you've come to the right place. It seems like you are investing without a specific set of goals in mind. Right now you are sort of doing a Ready. Fire. Aim. plan. I'd suggest you need to step back and make a plan and then invest your money according to your plan which takes into account your need to take risk.

Luckily the Bogleheads wiki is a great resource. Here's a link that shows how to get started with setting an Asset Allocation plan (AA), creating an Investment Policy Statement (IPS), etc.

https://www.bogleheads.org/wiki/Boglehe ... art-up_kit

Good luck!

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ruralavalon
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Re: 30 years old, What should I do with all this cash?

Post by ruralavalon » Wed May 15, 2019 10:52 am

Welcome to the forum :) .

It is good to see that you are debt free, make maximum contributions to your tax-advantaged accounts, make automatic contributions every month, and are using very diversified low expense index funds. You are off to a great start.

rmjordan wrote:
Tue May 14, 2019 4:48 pm
I have a decent amount of cash and I don't know what to do with it. I'm looking for a new fund to invest in within my taxable account. Currently, my taxable portfolio consists entirely of VHCAX (and small amounts in a few individual stocks).

I prefer low-cost funds that I can invest in and forget. My initial thought was to put money into VTSAX, but I already have such a large allocation into funds tracking the broad market, that I started thinking it might be a good idea to look into something else.

I'd be grateful to hear of any other ideas that people have. I'm 30 and looking for something low cost that isn't overly specific to a certain sector.

I've included a % breakdown of my overall portfolio to give people a sense of what I currently have.

Cash
Cash 4.56%

529 Plan
VFINX 0.53% | Vanguard 500 Index Investor, expense ratio: 0.14%
VEXPX 0.13% | Vanguard Explorer Inv, expense ratio: 0.46%

401k
VIIIX 5.77% | Vanguard Institutional Index Instl Pl, expense ratio: 0.02%
VTSAX 25.14% | Vanguard Total Stock Market Index Admiral, expense ratio: 0.04%

HSA
Cash 0.81%
VITSX 1.11% | Vanguard Total Stock Market Index I, expense ratio: 0.03%

Taxable Holdings
ACB 0.08% | Aurora Cannabis Inc.
CAG 0.69% | Conagra Brands Inc.
VHCAX 27.28% | Vanguard Capital Opportunity Admiral, expense ratio: 0.36%

Roth IRA
VIMAX 13.72% | Vanguard Mid Cap Index Admiral, expense ratio: 0.05%
VSMAX 12.11% | Vanguard Small Cap Index Admiral, expense ratio: 0.05%

Real Estate
Rental Property 8.07%
rmjordan wrote:
Wed May 15, 2019 10:09 am
Thank you for all the replies! For my first post, I've just got to say: Wow! There were a lot of great, helpful questions, so I'll try to go through them with succinct answers:

Q: Why something else?
A: I have a recurring monthly investments set up for all of my accounts. I've started becoming concerned that I should expand my taxable investment into something else. VHCAX takes up a significant portion of my portfolio. I'd like to find another fund that I can start putting those recurring investments into to make sure I'm not just all in on VHCAX.

My questions have come in part from a raise I recently got at work. I have a decent amount more money coming in and I don't want to just keep putting it into VHCAX, which would balloon, or keeping it in Cash.

Q: What do I fully fund?
A: Everything with a limit: Roth, 401k, and HSA are all fully funded.

Q: Do I have Cash outside of what's shown?
A: I don't, but my cash allotments already cover 6+ months of expenses. Those are sitting in a savings account with a 2.10% APY. I'd like to keep those as is, but put the extra cash that I have and the extra coming in each month into my taxable account.

Q: 529 Plan - Do I have kids?
A: No, but I plan to some day. I have a small recurring investment into that account each month. I like the tax benefits that comes from it (no income tax in my state on 529 investments).

Q: Do I have adequate long-term life insurance?
A: Yes, via work.

Q: What is my debt situation?
A: I have no other outstanding debts. I currently rent and pay my credit cards off each month (I use credit cards for the cash rewards). Rental income from the condo covers the mortgage and expenses.
In your taxable account consider a diversified international stock fund like Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) ER 0.11%.

Your initial thought of Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) ER 0.04% was also a good idea.

WIki article, "Tax-efficient Fund Placement".

In your 401k Vanguard Institutional Index Fund Institutional Plus(a S&P 500 index fund) (VIIIX) and Vanguard Total Stock Market Index Fund (VTSAX) are near duplicates, you could just use the total market fund.

I don't see any fixed income allocation other than cash. I suggest adding some Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) if offered in your 401k, otherwise some low expense intermediate-term bond fund. Even at age 30 I suggest around 20% in bonds or other fixed income.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

HomeStretch
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Re: 30 years old, What should I do with all this cash?

Post by HomeStretch » Wed May 15, 2019 11:00 am

Do you have an emergency fund with 6-12 months living expenses in a high yield savings or money market fund?

Do you fully fund your HSA and IRA?

What is your desired asset allocation? You look to be almost 100% equity. I don’t think you need another single stock or equity fund - you’re starting to accumulate several with higher ERs. Consider adding fixed income with the Cash.

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rmjordan
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Post by rmjordan » Wed May 15, 2019 1:37 pm

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k3vb0t
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Re: 30 years old, What should I do with all this cash?

Post by k3vb0t » Wed May 15, 2019 1:48 pm

rmjordan wrote:
Tue May 14, 2019 4:48 pm
I prefer low-cost funds that I can invest in and forget. My initial thought was to put money into VTSAX, but I already have such a large allocation into funds tracking the broad market, that I started thinking it might be a good idea to look into something else.

I'd be grateful to hear of any other ideas that people have. I'm 30 and looking for something low cost that isn't overly specific to a certain sector.
These two statements do not go together.

If you want low-cost, set and forget, then you take broad market like the 3 fund portfolio you'll see in the wiki. VTSAX, VTIAX, VBTLX. Total Stock US, Total Stock Int'l, Total Bond. That's as easy as it gets and as others have noted, you don't seem to have bond exposure. I like the "age - 20" in bonds, but you might feel different.

If you want "something else" you then do not want broad market... so it would have to be toward a certain sector.

The beauty of the set and forget it with a 3 or 4 fund portfolio is it allows you to go on and do whatever else you'd like to do with your life. No need to track the news about a specific sector. Just set you asset allocation, contribute, and move on.

So which is it?

Sitting on the cash while you figure this out isn't a terrible thing. It sounds like you need goals and a plan; many here tout the benefits of an Investment Policy Statement. Your IPS would require you to think through your goals, risk tolerance, and so on and that would dictate your next move.

If you're debt-free, maxing out accounts with limits, and have no mortgage/kids then the world is kind of your oyster. You could start saving up for a future home, invest the money in taxable, buy some term life insurance, take a vacation, etc. All depends on your goals.

EDIT: Also, could you explain why you started thinking it might be a good idea to look into something else. What's your rationale here? Or is it just a feeling of missing out (FOMO) or feeling like surely there is something else you'd have to do that would be more complex?

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rmjordan
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Post by rmjordan » Thu May 16, 2019 9:19 am

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ruralavalon
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Re: 30 years old, What should I do with all this cash?

Post by ruralavalon » Thu May 16, 2019 9:44 am

rmjordan wrote:
Thu May 16, 2019 9:19 am
@kv3b0t - in terms of why I started looking into something else:

I feel that VHCAX is starting to become too large a part of my portfolio. Since my largest recurring monthly payments go into my taxable account of which VHCAX is the sole fund, that percentage of my portfolio has been ballooning. It's not a case of FOMO, but rather a re-evaluation and search for potential other good set and forget options for my portfolio.

I'm looking for the middle ground to be found between a fund tracking the broad market and something overly specific to a certain sector.
A possibility is Vanguard Value Index Fund Admiral Shares (VVIAX) ER 0.05% which is a diversified (stocks of 337 companies) large-cap value fund not specific to a certain sector (Morningstar VVIAX, portfolio tab), to counterweight your large-cap growth fund Vanguard Capital Opportunity Adm (VHCAX).
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Jack FFR1846
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Re: 30 years old, What should I do with all this cash?

Post by Jack FFR1846 » Thu May 16, 2019 9:49 am

"Something Else" will return less than a 0.1% savings account. So will that be ok? Of course not. Good investing is boring. Boring as hell. People think that if they do something, they'll make more. They lose money. Stop doing things. Invest in your asset allocation percentages and then find a hobby to get excitement. I'd suggest you buy a Jeep and start offroading. It's what I do while my money sits in boring as hell investments making me a boatload of money by me simply ignoring it. The more I ignore it, the more it makes.
Bogle: Smart Beta is stupid

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Kenkat
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Re: 30 years old, What should I do with all this cash?

Post by Kenkat » Fri May 17, 2019 10:47 am

Value Index is a good choice, Total International is a good choice. Total Stock Index would be fine as well.

It partly comes down to what do you want your portfolio to be. Do you want 100% stocks? Or do you want some bonds? If you want some bonds, those would be better in a tax deferred account. Cap Opp would be better in a tax deferred account as well, but that might not be possible. Do you want international exposure? I think it’s a good idea but it has lagged US for awhile now so some disagree with its value. Do you want growth portfolio or do you want to balance that out? Value Index could accomplish that.

I start at the asset class level instead of the fund level to make this decision.

mega317
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Re: 30 years old, What should I do with all this cash?

Post by mega317 » Fri May 17, 2019 12:05 pm

Knibb High football rules

k3vb0t
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Re: 30 years old, What should I do with all this cash?

Post by k3vb0t » Fri May 17, 2019 1:25 pm

rmjordan wrote:
Thu May 16, 2019 9:19 am
@kv3b0t - in terms of why I started looking into something else:

I feel that VHCAX is starting to become too large a part of my portfolio. Since my largest recurring monthly payments go into my taxable account of which VHCAX is the sole fund, that percentage of my portfolio has been ballooning. It's not a case of FOMO, but rather a re-evaluation and search for potential other good set and forget options for my portfolio.

I'm looking for the middle ground to be found between a fund tracking the broad market and something overly specific to a certain sector.
So do you have an IPS or not? A desired asset allocation with percentages between US stocks, int’l stocks, and bonds?

If not then you’re just throwing investing darts at the board and hoping to find something rather than part of an overarching plan. It leads to chasing returns — wait is value investing good this year or not? Should I tilt small cap? Or REITs?

Your response to Jack FFR1846 — who I think coherently pointed out that a simple portfolio that you don’t have to think about, aka the set and forget you said you desire aka having a plan and using 3-5 funds to achieve those goals, is uncalled for.

We cannot write your plan for you. Pick your AA, pick your funds, and just continue to invest. It can be that simple.

Wakefield1
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Re: 30 years old, What should I do with all this cash?

Post by Wakefield1 » Fri May 17, 2019 1:37 pm

If the O.P. is going to put the cash into a taxable account (not retirement tax-deferred or Roth) should he consider using a Federal tax-exempt bond fund?

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