My entire portfolio, per your review, be gentle!

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
barliss2
Posts: 55
Joined: Tue Jan 21, 2020 5:10 pm

My entire portfolio, per your review, be gentle!

Post by barliss2 » Tue Jun 23, 2020 3:54 pm

EDITED TO ADD SPECIFIC ALLOCATIONS WITHIN EACH PART OF PORTFOLIO

Hi all. After a few comments that hit me in the gut, I reviewed all my assets so I can properly ask you questions! Here is EVERYTHING you asked for ;-)

Emergency funds: Yes, in Ally savings, Schwab checking, and worst case dip into brokerage accts and/or use credit cards

Debt: $219,000 mortgage with 4% interest

Tax Filing Status: Married Filing Jointly

Tax Rate: 22% Federal, 0% State

State of Residence: WA

Age: 41

Desired Asset allocation: 90% stocks / 10% bonds
Desired International allocation: 40% of stocks

Current total portfolio: High six figures

Current retirement assets

My Taxable
10.22% total portfolio
42% in US Stocks:
Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
Vanguard Total Stock Market Index Fund ETF (VTI)(.03)
27% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
19% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)
11% in Vanguard REIT Index Fund Admiral (VGSLX) (.12)

His Taxable
5.51% total portfolio
59% in stocks:
Facebook (FB)
Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
20% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
21% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

Joint Taxable
21.81% total portfolio
35% in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
33% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
32% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

My 401k
.74% total portfolio (I just started this job, my previous 401k contributions are in my Rollover IRA)
10% in Vanguard Mortgage Backed Securities Index Adml (VMBSX) (.07% expense ratio)
90% in Schwab S&P 500 (SWPPX) (.02%)
-Matched annually dependent on profit. Last year was 28% profit, so every $1k got an extra $280.

His Roth IRA at Vanguard
15.94% total portfolio
79% in US stocks:
-Resideo Tech Inc (REZI)
-Expedia (EXPE)
-Nike (NKE)
-Norforlk Southern Corp (NSC)
-Apple (AAPL)
-Amazon (AMZN)
-FedEx (FDX)
-Visa (V)
-Facebook (FB)
-AT&T (T)
-SPDR Dow Jones ETF Trust (DIA)
-iShares Core S&P 500 ETF (IVV)
-Technology Select Sector SPDR (XLK)
-Walt Disney (DIS)
-Berkshire Hathaway (BRK.B)
-Home Depot (HD)
-iShares Nasdaq Biotech ETF (IBB)
-Costco (COST)
-Starbucks (SBUX)
-iShares Core US Aggregate Bond ETF (AGG)
-Garrett Motion (GTX)
(^^ all of these funds were bought when we still had a manager)
-Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
12% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
9% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

My Roth IRA at Vanguard
12.36% total portfolio
35% in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
32% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
33% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

My Rollover IRA at Vanguard
29.42% total portfolio
34% in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
32% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
34% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

My SEP IRA at Vanguard (about to move to eTrade solo T-401k)
1.88% total portfolio
36% in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
33% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
31% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

His SEP IRA at Vanguard (about to move to eTrade solo T-401k)
.42% total portfolio
96% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX)
4% in cash

My HSA with HealthEquity
1.7% total portfolio
11% in Vanguard Total Bond Market IDX (VBMPX) (.03)
58% in Vanguard Inst Index Instl Plus (VIIIX) (.02)
30% in Vanguard Total Intl Stock Idx Instlpls (VTPSX) (.07)
1% in Cash

Contributions

2020 annual Contributions

$19500 on my 401k (no matches for me this year since I just started in Nov 2019)
$6000 his Roth IRA
$6000 my Roth IRA
$2000 his Solo T-401k (he freelances)
$7100 my HSA
$26300 taxable

Questions:
1. When we got out of being actively managed I moved (almost) everything to follow a 3-fund portfolio for simplicity, but now I’m realizing that some funds might be better positioned in certain areas than others. I just don’t know which are best suited for what, no matter how much I read—I get mixed up! I don’t know if I should sell what I have, pause certain funds indefinitely (which is what I’m doing now when I’m reallocating), or leave things alone and just keep funding even if it’s not particularly “right”. I also want to start doing TLH so separating the funds makes sense.
2. How do I actually go about doing this correctly? Which funds should I sell or simply pause? Is it even wise at this point to sell funds in certain areas and start fresh, simply bc it’s “better” to have bonds in one type of account over another? Should I sell slowly (maybe 2 funds a year) to avoid too many cap gains? Have I completely messed things up by trying to simplify!
3. I’m hoping for a clear “sell this in XYZ account” in 2020 so I can a) make everything optimal when we plan to retire (before 50) and b) so I can properly TLH.

Thanks so much!
Last edited by barliss2 on Tue Jun 23, 2020 6:57 pm, edited 1 time in total.

niceguy7376
Posts: 2705
Joined: Wed Jul 10, 2013 2:59 pm
Location: Metro ATL

Re: My entire portfolio, per your review, be gentle!

Post by niceguy7376 » Tue Jun 23, 2020 4:10 pm

Let me give your post a bump.

I noticed that there are 3 taxable accounts between the two of you.
At your tax bracket and in general most of the scenarios, Bonds are NOT suggested in after tax brokerage account as they spit out dividends.
There are also a mutual fund version and ETF version of the same fund.
As for doing TLH, I assume your own brokerage account and your joint brokerage account will be considered for duplicate/similar funds.
I do NOT know what tax implications are there if you make all after tax brokerage accounts as joint ownership . If there are no implications, then is it also possible to combine all 3 into one?

You also DO NOT need to have 3 funds in all types of accounts. It is generally suggested that ROTH accounts have it in stocks and Traditional accounts are in bonds.

Lou354
Posts: 667
Joined: Sun Apr 03, 2016 10:51 pm

Re: My entire portfolio, per your review, be gentle!

Post by Lou354 » Tue Jun 23, 2020 4:19 pm

REITs are not tax efficient. I recommend selling the REIT fund that's currently in your taxable account. If you want to own a REIT fund, buy it in a tax favored account. If it's less than, say, 5 percent of your portfolio, it probably won't make a difference so you could just drop that fund entirely.

You can buy and sell in the IRA and 401k accounts without tax consequences, so that's where I'd do any consolidating. Selling in the taxable accounts may incur capital gains tax, so probably don't sell there, except for that REIT fund where the tax hit is worth it.

sycamore
Posts: 680
Joined: Tue May 08, 2018 12:06 pm

Re: My entire portfolio, per your review, be gentle!

Post by sycamore » Tue Jun 23, 2020 4:52 pm

barliss2 wrote:
Tue Jun 23, 2020 3:54 pm
1. When we got out of being actively managed I moved (almost) everything to follow a 3-fund portfolio for simplicity, but now I’m realizing that some funds might be better positioned in certain areas than others. I just don’t know which are best suited for what, no matter how much I read—I get mixed up! I don’t know if I should sell what I have, pause certain funds indefinitely (which is what I’m doing now when I’m reallocating), or leave things alone and just keep funding even if it’s not particularly “right”. I also want to start doing TLH so separating the funds makes sense.
Good advice already from niceguy7376 and Lou354.

I'm not sure what you mean about pausing. I think it's okay to make your regular contributions while you clean things up. Getting most of your accounts streamlined shouldn't take too long. Really the only account to consider pausing new investments is the taxable account; in the tax-advantaged accounts you can buy and sell without concern for capital gain or loss on transactions.
barliss2 wrote:
Tue Jun 23, 2020 3:54 pm
2. How do I actually go about doing this correctly? Which funds should I sell or simply pause? Is it even wise at this point to sell funds in certain areas and start fresh, simply bc it’s “better” to have bonds in one type of account over another? Should I sell slowly (maybe 2 funds a year) to avoid too many cap gains? Have I completely messed things up by trying to simplify!
Read up on https://www.bogleheads.org/wiki/Tax-eff ... _placement.

One usual guideline is to have put bonds in tax-advantaged because usually
1) bonds distribute dividends that are taxed at income tax rates, not the lower qualified-dividend rates (like with many stock fund dividends)
2) bond dividends are usually high enough that getting taxed on them would be significant.

But many bond funds aren't yielding much right now (say 1 - 1.5%) that paying income tax rate on that doesn't amount to much. Is it worth trying to put fund X in account Y to absolutely maximize your tax savings? At this point I'd say no - just go with the usual recommendation to put bonds and bond funds in tax-advantaged accounts like IRA and 401k.
barliss2 wrote:
Tue Jun 23, 2020 3:54 pm
3. I’m hoping for a clear “sell this in XYZ account” in 2020 so I can a) make everything optimal when we plan to retire (before 50) and b) so I can properly TLH.
To answer this question, we need to see the % allocated to each XYZ holding. You've given us the % allocated to each account, but we need to see that at the holding level.

Topic Author
barliss2
Posts: 55
Joined: Tue Jan 21, 2020 5:10 pm

Re: My entire portfolio, per your review, be gentle!

Post by barliss2 » Tue Jun 23, 2020 7:08 pm

sycamore wrote:
Tue Jun 23, 2020 4:52 pm
barliss2 wrote:
Tue Jun 23, 2020 3:54 pm
1. When we got out of being actively managed I moved (almost) everything to follow a 3-fund portfolio for simplicity, but now I’m realizing that some funds might be better positioned in certain areas than others. I just don’t know which are best suited for what, no matter how much I read—I get mixed up! I don’t know if I should sell what I have, pause certain funds indefinitely (which is what I’m doing now when I’m reallocating), or leave things alone and just keep funding even if it’s not particularly “right”. I also want to start doing TLH so separating the funds makes sense.
Good advice already from niceguy7376 and Lou354.

I'm not sure what you mean about pausing. I think it's okay to make your regular contributions while you clean things up. Getting most of your accounts streamlined shouldn't take too long. Really the only account to consider pausing new investments is the taxable account; in the tax-advantaged accounts you can buy and sell without concern for capital gain or loss on transactions.
barliss2 wrote:
Tue Jun 23, 2020 3:54 pm
2. How do I actually go about doing this correctly? Which funds should I sell or simply pause? Is it even wise at this point to sell funds in certain areas and start fresh, simply bc it’s “better” to have bonds in one type of account over another? Should I sell slowly (maybe 2 funds a year) to avoid too many cap gains? Have I completely messed things up by trying to simplify!
Read up on https://www.bogleheads.org/wiki/Tax-eff ... _placement.

One usual guideline is to have put bonds in tax-advantaged because usually
1) bonds distribute dividends that are taxed at income tax rates, not the lower qualified-dividend rates (like with many stock fund dividends)
2) bond dividends are usually high enough that getting taxed on them would be significant.

But many bond funds aren't yielding much right now (say 1 - 1.5%) that paying income tax rate on that doesn't amount to much. Is it worth trying to put fund X in account Y to absolutely maximize your tax savings? At this point I'd say no - just go with the usual recommendation to put bonds and bond funds in tax-advantaged accounts like IRA and 401k.
barliss2 wrote:
Tue Jun 23, 2020 3:54 pm
3. I’m hoping for a clear “sell this in XYZ account” in 2020 so I can a) make everything optimal when we plan to retire (before 50) and b) so I can properly TLH.
To answer this question, we need to see the % allocated to each XYZ holding. You've given us the % allocated to each account, but we need to see that at the holding level.
I edited what I think you are asking for in regards to how much I'm holding.

So I guess my question is if I only hold bonds in basically everything but my taxable accts, then wouldn't I suddenly be way too heavy in bonds? I've been trying to reallocate my accounts to be 90/10 (currently more like 71/24/rest in alts and cash) so how can I actually get to my ideal allocation with all those bonds taking over my 401k, IRAs, and Roths which make up about 63% of my portfolio?

HomeStretch
Posts: 4645
Joined: Thu Dec 27, 2018 3:06 pm

Re: My entire portfolio, per your review, be gentle!

Post by HomeStretch » Tue Jun 23, 2020 7:51 pm

Have you considered refinancing your 4% mortgage to a lower rate?

In your Taxable accounts, turn off automatic reinvestment of dividends and capital gain distributions so you don’t buy more of the holdings you no longer want. You can sell tax lots with a loss or little gain to start moving to a 3-fund portfolio. For all other tax lots, evaluate the taxable capital gains (and whether they are short-term or long-term) before selling.

As you adjust your holdings, keep in mind tax-efficient fund placement. Here’s a link to the BH wiki page about it:
https://www.bogleheads.org/wiki/Tax-eff ... _placement

Everyone’s tax situation is different so tax efficient placement will vary by investor. Consider if this is suitable for you:
- hold 100% equity in your Taxable account for tax efficiency and Roth accounts for highest expected growth
- hold your entire desired 10% bond allocation in your Rollover IRA
- hold REITs (less tax efficient) in a tax advantaged account
- I personally like 100% equity in a HSA if used as long-term savings vehicle as the growth is tax free.

Does your 401k offer a mega Backdoor (MBD)? Link to BH wiki page about MBD:
https://www.bogleheads.org/wiki/After-tax_401(k)
If yes, if your 2020 contributions of $28,300 to a Taxable account are for long-term retirement savings, consider a MBD instead of Taxable contributions. Roth accounts grow tax free.
Last edited by HomeStretch on Tue Jun 23, 2020 8:48 pm, edited 1 time in total.

Living Free
Posts: 482
Joined: Thu Jul 19, 2018 7:31 pm

Re: My entire portfolio, per your review, be gentle!

Post by Living Free » Tue Jun 23, 2020 8:40 pm

barliss2 wrote:
Tue Jun 23, 2020 3:54 pm
EDITED TO ADD SPECIFIC ALLOCATIONS WITHIN EACH PART OF PORTFOLIO


Current retirement assets

My Taxable
10.22% total portfolio
42% in US Stocks:
Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
Vanguard Total Stock Market Index Fund ETF (VTI)(.03)
27% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
19% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)
11% in Vanguard REIT Index Fund Admiral (VGSLX) (.12)

His Taxable
5.51% total portfolio
59% in stocks:
Facebook (FB)
Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
20% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
21% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

Joint Taxable
21.81% total portfolio
35% in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
33% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
32% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)
...

2. How do I actually go about doing this correctly? Which funds should I sell or simply pause? Is it even wise at this point to sell funds in certain areas and start fresh, simply bc it’s “better” to have bonds in one type of account over another? Should I sell slowly (maybe 2 funds a year) to avoid too many cap gains? Have I completely messed things up by trying to simplify!

...
Rebalancing within your tax advantaged accounts should be easy and will not lead to any tax implications. Regarding the taxable accounts, you should determine your cost basis for all of the above holdings. Then you will know how much you have in gains or losses for each holding and whether it is short or long term cap gains, so you can see how much selling will cost you. Overall though your taxable accounts look pretty good aside from the single stock and REIT fund (I dislike single stocks making up any significant portion of one's portfolio and REITs would be better in a tax advantaged account); otherwise it's basically total US stock and bond index funds and total international stock index fund. it's often advised to move bonds to tax deferred accounts so see what the basis is for those total bond index funds - usually though bonds have less capital gains than stocks so hopefully that wouldn't be a huge tax hit.

sycamore
Posts: 680
Joined: Tue May 08, 2018 12:06 pm

Re: My entire portfolio, per your review, be gentle!

Post by sycamore » Wed Jun 24, 2020 10:12 am

barliss2, sorry I wasn't precise - rather than list each holding as a percent of the account, you want to list each holding as a percent of the *total* portfolio. The way the "Asking Portfolio Questions post suggests that way so it's easier to see how adjustments can be made.

But no worries I went ahead and made the calculations. I think the following has the correct percentages. Please review them and then we'll go from there!

Side notes: One thing missing from your original post that may matter is how much you have in Facebook in the taxable account. Right now we only know that 59% of the account is in "stocks" but you want to list the exact amount for each holding. Most bogleheads will suggest replacing those individual stocks in "His Roth" with VTSAX, so I don't think you need to bother specifying the % held in each one.

My Taxable 10.22% total portfolio
4.29% in US Stocks: Vanguard Total Stock Market Index Fund in both Admiral and ETF shares (VTSAX 0.04, VTI 0.03)
2.76% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
1.94% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)
1.12% in Vanguard REIT Index Fund Admiral (VGSLX) (.12)

His Taxable 5.51% total portfolio
3.25% in stocks: Facebook (FB), Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
1.10% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
1.16% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

Joint Taxable 21.81% total portfolio
7.63% in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
7.20% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
6.98% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

My 401k .74% total portfolio (I just started this job, my previous 401k contributions are in my Rollover IRA)
.07% in Vanguard Mortgage Backed Securities Index Adml (VMBSX) (.07% expense ratio)
.67% in Schwab S&P 500 (SWPPX) (.02%)
Matched annually dependent on profit. Last year was 28% profit, so every $1k got an extra $280.

His Roth IRA at Vanguard 15.94% total portfolio
12.59% in US stocks:various tickers,Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
1.91% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
1.43% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

My Roth IRA at Vanguard 12.36% total portfolio
4.33% in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
3.96% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
4.08% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

My Rollover IRA at Vanguard 29.42% total portfolio
10.00% in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
9.41% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
10.00% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

My SEP IRA at Vanguard (about to move to eTrade solo T-401k) 1.88% total portfolio
0.68% in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
0.62% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
0.58% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

His SEP IRA at Vanguard (about to move to eTrade solo T-401k) .42% total portfolio
0.40% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX)
0.02% in cash

My HSA with HealthEquity 1.7% total portfolio
0.19% in Vanguard Total Bond Market IDX (VBMPX) (.03)
0.99% in Vanguard Inst Index Instl Plus (VIIIX) (.02)
0.51% in Vanguard Total Intl Stock Idx Instlpls (VTPSX) (.07)
0.02% in Cash

User avatar
Leif
Posts: 2915
Joined: Wed Sep 19, 2007 4:15 pm

Re: My entire portfolio, per your review, be gentle!

Post by Leif » Wed Jun 24, 2020 10:43 am

I have two broad suggestions:

1. Simplify your investments by selling your individual stocks. It looks like these are in a Roth so no tax impact in doing so. If you are in the 3 fund portfolio to make you investment life simpler then you should do that.

2. Tax efficiency usually puts bonds in a retirement account. I try to put mine in my traditional IRA.
Last edited by Leif on Wed Jun 24, 2020 6:35 pm, edited 3 times in total.

pkcrafter
Posts: 14089
Joined: Sun Mar 04, 2007 12:19 pm
Location: CA
Contact:

Re: My entire portfolio, per your review, be gentle!

Post by pkcrafter » Wed Jun 24, 2020 12:01 pm

Barless, sycamore has done a nice job of putting your portfolio into perspective. You have to consider all the accounts as parts of one portfolio, and when you, you will see you have lots of unnecessary repetition. Clean up and simplify your holdings.


My Taxable
10.22% total portfolio
42% in US Stocks:
Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
Vanguard Total Stock Market Index Fund ETF (VTI)(.03)
27% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
19% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)
11% in Vanguard REIT Index Fund Admiral (VGSLX) (.12)

Why are you holding both ETF and Fund in total stock market?

His Taxable
5.51% total portfolio
59% in stocks:
Facebook (FB)
Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
20% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
21% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)
Don't hold bonds in taxable.

Joint Taxable
21.81% total portfolio
35% in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
33% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
32% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)
Stop duplication in every account. Simplify and the portfolio will be much easier to manage.

My 401k
.74% total portfolio (I just started this job, my previous 401k contributions are in my Rollover IRA)
10% in Vanguard Mortgage Backed Securities Index Adml (VMBSX) (.07% expense ratio)
90% in Schwab S&P 500 (SWPPX) (.02%)
-Matched annually dependent on profit. Last year was 28% profit, so every $1k got an extra $280.
Are you maxing this account?

His Roth IRA at Vanguard
15.94% total portfolio
79% in US stocks:
-Resideo Tech Inc (REZI)
-Expedia (EXPE)
-Nike (NKE)
-Norforlk Southern Corp (NSC)
-Apple (AAPL)
-Amazon (AMZN)
-FedEx (FDX)
-Visa (V)
-Facebook (FB)
-AT&T (T)
-SPDR Dow Jones ETF Trust (DIA)
-iShares Core S&P 500 ETF (IVV)
-Technology Select Sector SPDR (XLK)
-Walt Disney (DIS)
-Berkshire Hathaway (BRK.B)
-Home Depot (HD)
-iShares Nasdaq Biotech ETF (IBB)
-Costco (COST)
-Starbucks (SBUX)
-iShares Core US Aggregate Bond ETF (AGG)
-Garrett Motion (GTX)
(^^ all of these funds were bought when we still had a manager)
-Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
12% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
9% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)
:annoyed Clean up. Drop the individual stocks.

My Roth IRA at Vanguard
12.36% total portfolio
35% in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
32% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
33% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

My Rollover IRA at Vanguard
29.42% total portfolio
34% in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
32% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
34% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

My SEP IRA at Vanguard (about to move to eTrade solo T-401k)
1.88% total portfolio
36% in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
33% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
31% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

His SEP IRA at Vanguard (about to move to eTrade solo T-401k)
.42% total portfolio
96% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX)
4% in cash

My HSA with HealthEquity
1.7% total portfolio
11% in Vanguard Total Bond Market IDX (VBMPX) (.03)
58% in Vanguard Inst Index Instl Plus (VIIIX) (.02)
30% in Vanguard Total Intl Stock Idx Instlpls (VTPSX) (.07)
1% in Cash


Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

kaneohe
Posts: 6497
Joined: Mon Sep 22, 2008 12:38 pm

Re: My entire portfolio, per your review, be gentle!

Post by kaneohe » Wed Jun 24, 2020 1:29 pm

barliss2 wrote:
Tue Jun 23, 2020 7:08 pm
...............................................................

So I guess my question is if I only hold bonds in basically everything but my taxable accts, then wouldn't I suddenly be way too heavy in bonds? I've been trying to reallocate my accounts to be 90/10 (currently more like 71/24/rest in alts and cash) so how can I actually get to my ideal allocation with all those bonds taking over my 401k, IRAs, and Roths which make up about 63% of my portfolio?
You may be misinterpreting what you have read. I think the suggestion is: if you hold bonds, hold them in tax-advantaged accounts. You seem to be thinking: don't hold anything but bonds in tax-advantaged accounts.

sycamore
Posts: 680
Joined: Tue May 08, 2018 12:06 pm

Re: My entire portfolio, per your review, be gentle!

Post by sycamore » Wed Jun 24, 2020 3:30 pm

barliss,

Currently your AA is 45.55% US stocks, 27.47% Intl stocks (about 38% of stocks), and 26.87% bonds/cash. Your desired asset allocation is 90% stocks / 10% bonds, with international allocation of 40% of stocks.

That's a big jump - do you definitely want to do that?

Also, what other bond funds do you have in your 401k? You have the Mortgage Backed Securities Fund, but is there a Total Bond Market Fund or maybe Intermediate-Term Bond Index Fund? Your 401k is a good place to put ongoing contributions toward bonds but most Bogleheads wouldn't use the MBS fund as a "core" bond fund.

Topic Author
barliss2
Posts: 55
Joined: Tue Jan 21, 2020 5:10 pm

Re: My entire portfolio, per your review, be gentle!

Post by barliss2 » Wed Jun 24, 2020 4:35 pm

sycamore wrote:
Wed Jun 24, 2020 3:30 pm
barliss,

Currently your AA is 45.55% US stocks, 27.47% Intl stocks (about 38% of stocks), and 26.87% bonds/cash. Your desired asset allocation is 90% stocks / 10% bonds, with international allocation of 40% of stocks.

That's a big jump - do you definitely want to do that?

Also, what other bond funds do you have in your 401k? You have the Mortgage Backed Securities Fund, but is there a Total Bond Market Fund or maybe Intermediate-Term Bond Index Fund? Your 401k is a good place to put ongoing contributions toward bonds but most Bogleheads wouldn't use the MBS fund as a "core" bond fund.
Yes, I want to be 90/10. I'm not really understanding your math. 45.55+27.47 doesn't equal 38.

And I put every fund in every account I have up top. So no, I don't have any other bond funds in my 401k.

I thought I was very clear and answered everything correctly. LMK if I was not.

Topic Author
barliss2
Posts: 55
Joined: Tue Jan 21, 2020 5:10 pm

Re: My entire portfolio, per your review, be gentle!

Post by barliss2 » Wed Jun 24, 2020 4:36 pm

pkcrafter wrote:
Wed Jun 24, 2020 12:01 pm
Barless, sycamore has done a nice job of putting your portfolio into perspective. You have to consider all the accounts as parts of one portfolio, and when you, you will see you have lots of unnecessary repetition. Clean up and simplify your holdings.


My Taxable
10.22% total portfolio
42% in US Stocks:
Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
Vanguard Total Stock Market Index Fund ETF (VTI)(.03)
27% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
19% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)
11% in Vanguard REIT Index Fund Admiral (VGSLX) (.12)

Why are you holding both ETF and Fund in total stock market?

His Taxable
5.51% total portfolio
59% in stocks:
Facebook (FB)
Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
20% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
21% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)
Don't hold bonds in taxable.

Joint Taxable
21.81% total portfolio
35% in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
33% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
32% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)
Stop duplication in every account. Simplify and the portfolio will be much easier to manage.

My 401k
.74% total portfolio (I just started this job, my previous 401k contributions are in my Rollover IRA)
10% in Vanguard Mortgage Backed Securities Index Adml (VMBSX) (.07% expense ratio)
90% in Schwab S&P 500 (SWPPX) (.02%)
-Matched annually dependent on profit. Last year was 28% profit, so every $1k got an extra $280.
Are you maxing this account?

His Roth IRA at Vanguard
15.94% total portfolio
79% in US stocks:
-Resideo Tech Inc (REZI)
-Expedia (EXPE)
-Nike (NKE)
-Norforlk Southern Corp (NSC)
-Apple (AAPL)
-Amazon (AMZN)
-FedEx (FDX)
-Visa (V)
-Facebook (FB)
-AT&T (T)
-SPDR Dow Jones ETF Trust (DIA)
-iShares Core S&P 500 ETF (IVV)
-Technology Select Sector SPDR (XLK)
-Walt Disney (DIS)
-Berkshire Hathaway (BRK.B)
-Home Depot (HD)
-iShares Nasdaq Biotech ETF (IBB)
-Costco (COST)
-Starbucks (SBUX)
-iShares Core US Aggregate Bond ETF (AGG)
-Garrett Motion (GTX)
(^^ all of these funds were bought when we still had a manager)
-Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
12% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
9% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)
:annoyed Clean up. Drop the individual stocks.

My Roth IRA at Vanguard
12.36% total portfolio
35% in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
32% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
33% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

My Rollover IRA at Vanguard
29.42% total portfolio
34% in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
32% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
34% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

My SEP IRA at Vanguard (about to move to eTrade solo T-401k)
1.88% total portfolio
36% in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
33% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
31% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

His SEP IRA at Vanguard (about to move to eTrade solo T-401k)
.42% total portfolio
96% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX)
4% in cash

My HSA with HealthEquity
1.7% total portfolio
11% in Vanguard Total Bond Market IDX (VBMPX) (.03)
58% in Vanguard Inst Index Instl Plus (VIIIX) (.02)
30% in Vanguard Total Intl Stock Idx Instlpls (VTPSX) (.07)
1% in Cash


Paul
THANK YOU. Crossing things out and bolding items is EXACTLY what I was hoping for. This rocks.

Topic Author
barliss2
Posts: 55
Joined: Tue Jan 21, 2020 5:10 pm

Re: My entire portfolio, per your review, be gentle!

Post by barliss2 » Wed Jun 24, 2020 4:37 pm

sycamore wrote:
Wed Jun 24, 2020 10:12 am
barliss2, sorry I wasn't precise - rather than list each holding as a percent of the account, you want to list each holding as a percent of the *total* portfolio. The way the "Asking Portfolio Questions post suggests that way so it's easier to see how adjustments can be made.

But no worries I went ahead and made the calculations. I think the following has the correct percentages. Please review them and then we'll go from there!

Side notes: One thing missing from your original post that may matter is how much you have in Facebook in the taxable account. Right now we only know that 59% of the account is in "stocks" but you want to list the exact amount for each holding. Most bogleheads will suggest replacing those individual stocks in "His Roth" with VTSAX, so I don't think you need to bother specifying the % held in each one.

My Taxable 10.22% total portfolio
4.29% in US Stocks: Vanguard Total Stock Market Index Fund in both Admiral and ETF shares (VTSAX 0.04, VTI 0.03)
2.76% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
1.94% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)
1.12% in Vanguard REIT Index Fund Admiral (VGSLX) (.12)

His Taxable 5.51% total portfolio
3.25% in stocks: Facebook (FB), Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
1.10% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
1.16% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

Joint Taxable 21.81% total portfolio
7.63% in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
7.20% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
6.98% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

My 401k .74% total portfolio (I just started this job, my previous 401k contributions are in my Rollover IRA)
.07% in Vanguard Mortgage Backed Securities Index Adml (VMBSX) (.07% expense ratio)
.67% in Schwab S&P 500 (SWPPX) (.02%)
Matched annually dependent on profit. Last year was 28% profit, so every $1k got an extra $280.

His Roth IRA at Vanguard 15.94% total portfolio
12.59% in US stocks:various tickers,Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
1.91% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
1.43% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

My Roth IRA at Vanguard 12.36% total portfolio
4.33% in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
3.96% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
4.08% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

My Rollover IRA at Vanguard 29.42% total portfolio
10.00% in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
9.41% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
10.00% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

My SEP IRA at Vanguard (about to move to eTrade solo T-401k) 1.88% total portfolio
0.68% in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
0.62% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
0.58% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

His SEP IRA at Vanguard (about to move to eTrade solo T-401k) .42% total portfolio
0.40% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX)
0.02% in cash

My HSA with HealthEquity 1.7% total portfolio
0.19% in Vanguard Total Bond Market IDX (VBMPX) (.03)
0.99% in Vanguard Inst Index Instl Plus (VIIIX) (.02)
0.51% in Vanguard Total Intl Stock Idx Instlpls (VTPSX) (.07)
0.02% in Cash
This is amazing. Thank you for doing all that math on my behalf! This does indeed look correct.

Sahara
Posts: 125
Joined: Tue Dec 04, 2018 6:21 pm

Re: My entire portfolio, per your review, be gentle!

Post by Sahara » Wed Jun 24, 2020 5:10 pm

Would something like this work to simplify in the long run? I think there would be room for the contributions to maintain the desired AA of 90/10. It only gets you to about 23% International. You could leave the current International in the Roths and contribute stock only there moving forward if you can get your 40% in taxable.

Roths, HSA, SOLO 401ks - US Stock

Taxable - Us Stock and International

401K - US Stock (start adding Bonds with new contributions)

Rollover IRA - Your 10% Bonds for now and the remainder US Stock (no new contributions)

Topic Author
barliss2
Posts: 55
Joined: Tue Jan 21, 2020 5:10 pm

Re: My entire portfolio, per your review, be gentle!

Post by barliss2 » Wed Jun 24, 2020 6:00 pm

barliss2 wrote:
Wed Jun 24, 2020 4:36 pm
pkcrafter wrote:
Wed Jun 24, 2020 12:01 pm
Barless, sycamore has done a nice job of putting your portfolio into perspective. You have to consider all the accounts as parts of one portfolio, and when you, you will see you have lots of unnecessary repetition. Clean up and simplify your holdings.


My Taxable
10.22% total portfolio
42% in US Stocks:
Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
Vanguard Total Stock Market Index Fund ETF (VTI)(.03)
27% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
19% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)
11% in Vanguard REIT Index Fund Admiral (VGSLX) (.12)

Why are you holding both ETF and Fund in total stock market?

His Taxable
5.51% total portfolio
59% in stocks:
Facebook (FB)
Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
20% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
21% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)
Don't hold bonds in taxable.

Joint Taxable
21.81% total portfolio
35% in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
33% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
32% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)
Stop duplication in every account. Simplify and the portfolio will be much easier to manage.

My 401k
.74% total portfolio (I just started this job, my previous 401k contributions are in my Rollover IRA)
10% in Vanguard Mortgage Backed Securities Index Adml (VMBSX) (.07% expense ratio)
90% in Schwab S&P 500 (SWPPX) (.02%)
-Matched annually dependent on profit. Last year was 28% profit, so every $1k got an extra $280.
Are you maxing this account?

His Roth IRA at Vanguard
15.94% total portfolio
79% in US stocks:
-Resideo Tech Inc (REZI)
-Expedia (EXPE)
-Nike (NKE)
-Norforlk Southern Corp (NSC)
-Apple (AAPL)
-Amazon (AMZN)
-FedEx (FDX)
-Visa (V)
-Facebook (FB)
-AT&T (T)
-SPDR Dow Jones ETF Trust (DIA)
-iShares Core S&P 500 ETF (IVV)
-Technology Select Sector SPDR (XLK)
-Walt Disney (DIS)
-Berkshire Hathaway (BRK.B)
-Home Depot (HD)
-iShares Nasdaq Biotech ETF (IBB)
-Costco (COST)
-Starbucks (SBUX)
-iShares Core US Aggregate Bond ETF (AGG)
-Garrett Motion (GTX)
(^^ all of these funds were bought when we still had a manager)
-Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
12% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
9% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)
:annoyed Clean up. Drop the individual stocks.

My Roth IRA at Vanguard
12.36% total portfolio
35% in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
32% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
33% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

My Rollover IRA at Vanguard
29.42% total portfolio
34% in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
32% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
34% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

My SEP IRA at Vanguard (about to move to eTrade solo T-401k)
1.88% total portfolio
36% in Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
33% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
31% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)

His SEP IRA at Vanguard (about to move to eTrade solo T-401k)
.42% total portfolio
96% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX)
4% in cash

My HSA with HealthEquity
1.7% total portfolio
11% in Vanguard Total Bond Market IDX (VBMPX) (.03)
58% in Vanguard Inst Index Instl Plus (VIIIX) (.02)
30% in Vanguard Total Intl Stock Idx Instlpls (VTPSX) (.07)
1% in Cash


Paul
THANK YOU. Crossing things out and bolding items is EXACTLY what I was hoping for. This rocks.
And yes, I'm maxing my 401k--all my contributions are on the OP. Thanks!

Sahara
Posts: 125
Joined: Tue Dec 04, 2018 6:21 pm

Re: My entire portfolio, per your review, be gentle!

Post by Sahara » Wed Jun 24, 2020 7:12 pm

You want to contribue a total of 66,900 broken down as follows:
10% Bond = 6,690
90% Stock = 60,210 As follows: 40% INT = 26,760 50% US = 33,450

I wonder if something like this would work?
$19500 401k 6,000 US Stock 6,810 International 6,690 Bond
$6000 his Roth IRA 6,000 US Stock
$6000 my Roth IRA 6,000 US Stock
$2000 his Solo 401k 2,000 US Stock
$7100 my HSA 7,100 US Stock
$26300 Taxable 6,350 US Stock 19,950 International

Sahara
Posts: 125
Joined: Tue Dec 04, 2018 6:21 pm

Re: My entire portfolio, per your review, be gentle!

Post by Sahara » Thu Jun 25, 2020 7:12 am

A few corrections here - I noticed you want international to be 40% of stock - not your overall portfolio.

Some ideas for simplification:
Roths, HSA, SOLO 401ks - US Stock
Taxable - Us Stock and International
401K - US Stock (start adding Bonds with new contributions) and International
Rollover IRA - Your 10% Bonds for now and the remainder US Stock (no new contributions)

Ideas for new contributions:
TOTAL CONTRIBUTIONS 66,900
10% Bond 6,690
90% Stock 60,210
40% (of 90% = 36%of portfolio) INT 26,760 24,084
50% (of 90% = 54% of portfolio) US 33,450 36,126

19,500 401k 6,000 US Stock 6,810 International 6,690 Bond
6,000 his Roth IRA 6,000 US Stock
6,000 my Roth IRA 6,000 US Stock
2,000 his Solo 401k 2,000 US Stock
7,100 my HSA 7,100 US Stock
26,300 Taxable 6,350 9026 US Stock 19,950 17,274 International
US Stock = 36,126 International = 24,084


Sycamore's question about the bond fund in your 401K relates to options besides the fund you are using. Are other bond funds available?

I've put some numbers in this spreadsheet, using 800,000 total portfolio and your percentages, combining the taxable accounts into one. Sheet one is the overall portfolio sheet 2 is new contributions and sheet 3 is just an organizer.

https://docs.google.com/spreadsheets/d/ ... sp=sharing

sycamore
Posts: 680
Joined: Tue May 08, 2018 12:06 pm

Re: My entire portfolio, per your review, be gentle!

Post by sycamore » Thu Jun 25, 2020 9:26 am

barliss2 wrote:
Wed Jun 24, 2020 4:35 pm
sycamore wrote:
Wed Jun 24, 2020 3:30 pm
barliss,

Currently your AA is 45.55% US stocks, 27.47% Intl stocks (about 38% of stocks), and 26.87% bonds/cash. Your desired asset allocation is 90% stocks / 10% bonds, with international allocation of 40% of stocks.

That's a big jump - do you definitely want to do that?

Also, what other bond funds do you have in your 401k? You have the Mortgage Backed Securities Fund, but is there a Total Bond Market Fund or maybe Intermediate-Term Bond Index Fund? Your 401k is a good place to put ongoing contributions toward bonds but most Bogleheads wouldn't use the MBS fund as a "core" bond fund.
Yes, I want to be 90/10. I'm not really understanding your math. 45.55+27.47 doesn't equal 38.

And I put every fund in every account I have up top. So no, I don't have any other bond funds in my 401k.

I thought I was very clear and answered everything correctly. LMK if I was not.
Regarding the 38, that's how much stocks you have in international: 27.47 / (27.47+ 45.55) = 37.6% rounds to 38.

For the question about 401k bond funds, as Sahara noted in another post we're trying to find out not what you currently own but what choices the 401k plan offers.

ClaycordJCA
Posts: 348
Joined: Sun Aug 09, 2015 11:19 pm
Location: SF Bay Area

Re: My entire portfolio, per your review, be gentle!

Post by ClaycordJCA » Thu Jun 25, 2020 9:37 am

barliss2 wrote:
Wed Jun 24, 2020 4:35 pm
sycamore wrote:
Wed Jun 24, 2020 3:30 pm
barliss,

Currently your AA is 45.55% US stocks, 27.47% Intl stocks (about 38% of stocks), and 26.87% bonds/cash. Your desired asset allocation is 90% stocks / 10% bonds, with international allocation of 40% of stocks.

That's a big jump - do you definitely want to do that?

Also, what other bond funds do you have in your 401k? You have the Mortgage Backed Securities Fund, but is there a Total Bond Market Fund or maybe Intermediate-Term Bond Index Fund? Your 401k is a good place to put ongoing contributions toward bonds but most Bogleheads wouldn't use the MBS fund as a "core" bond fund.
Yes, I want to be 90/10. I'm not really understanding your math. 45.55+27.47 doesn't equal 38.

And I put every fund in every account I have up top. So no, I don't have any other bond funds in my 401k.

I thought I was very clear and answered everything correctly. LMK if I was not.
I will jump in and try to clarify. The 38 percent is the percentage of stocks allocated to international, not the percentage of your entire portfolio: international stocks/(domestic stocks + international stocks). Bogleheads generally express their desired international stock allocation as a percentage of their stocks.

The question about bond funds in the 401k is asking whether there are other bond fund options available in your plan that you could invest in, such as a total bond market fund. If so, why are you invested in the MBS fund rather than the broader total bond market?

sycamore
Posts: 680
Joined: Tue May 08, 2018 12:06 pm

Re: My entire portfolio, per your review, be gentle!

Post by sycamore » Thu Jun 25, 2020 9:47 am

Sahara wrote:
Thu Jun 25, 2020 7:12 am
A few corrections here - I noticed you want international to be 40% of stock - not your overall portfolio.

Some ideas for simplification:
Roths, HSA, SOLO 401ks - US Stock
Taxable - Us Stock and International
401K - US Stock (start adding Bonds with new contributions) and International
Rollover IRA - Your 10% Bonds for now and the remainder US Stock (no new contributions)

Ideas for new contributions:
TOTAL CONTRIBUTIONS 66,900
10% Bond 6,690
90% Stock 60,210
40% (of 90% = 36%of portfolio) INT 26,760 24,084
50% (of 90% = 54% of portfolio) US 33,450 36,126

19,500 401k 6,000 US Stock 6,810 International 6,690 Bond
6,000 his Roth IRA 6,000 US Stock
6,000 my Roth IRA 6,000 US Stock
2,000 his Solo 401k 2,000 US Stock
7,100 my HSA 7,100 US Stock
26,300 Taxable 6,350 9026 US Stock 19,950 17,274 International
US Stock = 36,126 International = 24,084


Sycamore's question about the bond fund in your 401K relates to options besides the fund you are using. Are other bond funds available?

I've put some numbers in this spreadsheet, using 800,000 total portfolio and your percentages, combining the taxable accounts into one. Sheet one is the overall portfolio sheet 2 is new contributions and sheet 3 is just an organizer.

https://docs.google.com/spreadsheets/d/ ... sp=sharing
The above from Sahara looks like a very good proposal to me. It has the positive features of keeping stocks in taxable, simplicity (by aiming for just one asset class in most accounts), and rebalancing ability (by having a mix of stocks & bonds in 401k and Rollover IRA).

Likewise, the breakdown of how to direct yearly contributions make sense to meet the desired AA.

barliss2, at some point, your portfolio may become unbalanced, for example if US stocks continue to outpace International, or there's another big stock market drop and you'll need to rebalance from bonds into stocks. When that happens, you can use the 401k and Rollover IRA to do any one-off rebalancing. Or re-balance using your contributions, either way will keep you at your desired AA.

If the Mortgage Backed Securities Fund is the only bond fund in 401k, might have to rework the proposal if you're uncomfortable having sizable amounts of your bond AA in that fund.

Topic Author
barliss2
Posts: 55
Joined: Tue Jan 21, 2020 5:10 pm

Re: My entire portfolio, per your review, be gentle!

Post by barliss2 » Fri Jun 26, 2020 11:14 am

Sahara wrote:
Thu Jun 25, 2020 7:12 am
A few corrections here - I noticed you want international to be 40% of stock - not your overall portfolio.

Some ideas for simplification:
Roths, HSA, SOLO 401ks - US Stock
Taxable - Us Stock and International
401K - US Stock (start adding Bonds with new contributions) and International
Rollover IRA - Your 10% Bonds for now and the remainder US Stock (no new contributions)

Ideas for new contributions:
TOTAL CONTRIBUTIONS 66,900
10% Bond 6,690
90% Stock 60,210
40% (of 90% = 36%of portfolio) INT 26,760 24,084
50% (of 90% = 54% of portfolio) US 33,450 36,126

19,500 401k 6,000 US Stock 6,810 International 6,690 Bond
6,000 his Roth IRA 6,000 US Stock
6,000 my Roth IRA 6,000 US Stock
2,000 his Solo 401k 2,000 US Stock
7,100 my HSA 7,100 US Stock
26,300 Taxable 6,350 9026 US Stock 19,950 17,274 International
US Stock = 36,126 International = 24,084


Sycamore's question about the bond fund in your 401K relates to options besides the fund you are using. Are other bond funds available?

I've put some numbers in this spreadsheet, using 800,000 total portfolio and your percentages, combining the taxable accounts into one. Sheet one is the overall portfolio sheet 2 is new contributions and sheet 3 is just an organizer.

https://docs.google.com/spreadsheets/d/ ... sp=sharing
HOLY MOLY, this is just mindblowing and amazing and I'm speechless. Thank you for doing this on a stranger's behalf. You are unbelievable. THANK YOU!

Sahara
Posts: 125
Joined: Tue Dec 04, 2018 6:21 pm

Re: My entire portfolio, per your review, be gentle!

Post by Sahara » Fri Jun 26, 2020 2:08 pm

You are very welcome. I feel like it's a fraction of what I've gained from this forum!

Topic Author
barliss2
Posts: 55
Joined: Tue Jan 21, 2020 5:10 pm

Re: My entire portfolio, per your review, be gentle!

Post by barliss2 » Mon Jun 29, 2020 11:23 pm

Sahara wrote:
Fri Jun 26, 2020 2:08 pm
You are very welcome. I feel like it's a fraction of what I've gained from this forum!
Ok! I'm on a good pace exchanging funds, but left my taxable accts for last. What is the best way to sell the bonds? The taxable accts have an $8800 unrealized gain for the bonds in those accts. I'm a bit nervous about what I'd have to pay come tax time due to that exchange. I'm at the 22% tax bracket (I believe). The whole point of me getting things right was a) to get things right ;-) and b) to dive into TLH (where currently my intl stocks are taking a hit and I wouldn't be surprised it they continued to tank throughout the year).

What do you think? Bite the bullet...wait it out...sell $3000 worth of bonds, but only if I can sell at a loss $3000+ worth of intl stock...or something else?

sycamore
Posts: 680
Joined: Tue May 08, 2018 12:06 pm

Re: My entire portfolio, per your review, be gentle!

Post by sycamore » Tue Jun 30, 2020 8:15 pm

barliss2 wrote:
Mon Jun 29, 2020 11:23 pm
Sahara wrote:
Fri Jun 26, 2020 2:08 pm
You are very welcome. I feel like it's a fraction of what I've gained from this forum!
Ok! I'm on a good pace exchanging funds, but left my taxable accts for last. What is the best way to sell the bonds? The taxable accts have an $8800 unrealized gain for the bonds in those accts. I'm a bit nervous about what I'd have to pay come tax time due to that exchange. I'm at the 22% tax bracket (I believe). The whole point of me getting things right was a) to get things right ;-) and b) to dive into TLH (where currently my intl stocks are taking a hit and I wouldn't be surprised it they continued to tank throughout the year).

What do you think? Bite the bullet...wait it out...sell $3000 worth of bonds, but only if I can sell at a loss $3000+ worth of intl stock...or something else?
If you have losses in a holding, you'd want to take them now. Have you done a tax loss harvest before? There are key things to know regarding wash sales, especially given that you have the same security (VTIAX = VG Total Intl Stock) in both taxable and tax-advantaged accounts. It's usually best also to declare your basis as Specific Share ID instead of the default Average Cost Basis.

Regarding the amount to sell, you suggested selling 3000 of VTIAX but it's not the total sale that matters, it's the loss from selling them = current value - purchase value. Once you know the loss on all the various purchases of VTIAX you have in your taxable account, then you can sell whatever bonds will result in the same (or nearly so) amount of gain. That way your gains will cancel out the losses and there will be no increase to your income for this year and thus no extra taxes from making these sales.

Topic Author
barliss2
Posts: 55
Joined: Tue Jan 21, 2020 5:10 pm

Re: My entire portfolio, per your review, be gentle!

Post by barliss2 » Tue Jun 30, 2020 8:38 pm

sycamore wrote:
Tue Jun 30, 2020 8:15 pm
If you have losses in a holding, you'd want to take them now. Have you done a tax loss harvest before? There are key things to know regarding wash sales, especially given that you have the same security (VTIAX = VG Total Intl Stock) in both taxable and tax-advantaged accounts. It's usually best also to declare your basis as Specific Share ID instead of the default Average Cost Basis.

Regarding the amount to sell, you suggested selling 3000 of VTIAX but it's not the total sale that matters, it's the loss from selling them = current value - purchase value. Once you know the loss on all the various purchases of VTIAX you have in your taxable account, then you can sell whatever bonds will result in the same (or nearly so) amount of gain. That way your gains will cancel out the losses and there will be no increase to your income for this year and thus no extra taxes from making these sales.

Yeah, I read up a little on TLH, but haven't done them yet. I needed to get these accts in order first!

I no longer hold bonds or international stocks in any other accounts except my taxable accts, but I'm trying to sell the bonds in the 3 taxable accts and then get more intl stock to go with my current game plan.

https://docs.google.com/spreadsheets/d/ ... sp=sharing

The only funds that has taken a hit so far is the international stock (total in my acct = -$916, total in joint acct = −$1,649.54, total in husband's acct = −$789.06) and the REIT (in my acct = -$574), while the bonds have gains (total in joint = +$5,950.66, total in husband's = +$796.21, and total in my acct = +$1,929.23) so I feel like I'm in a bit of a pickle selling a bunch of gains instead of selling those intl stock to get the TLH...I'm not quite sure how to fix this, but I feel like I'm so close!

Sahara
Posts: 125
Joined: Tue Dec 04, 2018 6:21 pm

Re: My entire portfolio, per your review, be gentle!

Post by Sahara » Wed Jul 01, 2020 6:27 am

I confess to having no knowledge of TLH. I do wonder if the idea is to sell both bonds and international now in order to offset the loss with the gain for tax purposes. When you sell, will the money go to your settlement account? Maybe after 30 days you take the money in the settlement account and buy international to attain your desired AA?

I think you've labeled the 401K instead of the taxable with the red comment about rebalancing on your spreadsheet.

Topic Author
barliss2
Posts: 55
Joined: Tue Jan 21, 2020 5:10 pm

Re: My entire portfolio, per your review, be gentle!

Post by barliss2 » Wed Jul 01, 2020 10:20 am

I think you've labeled the 401K instead of the taxable with the red comment about rebalancing on your spreadsheet.
Hmmm, while the numbers are a little off (I have more in my 401k than is said in the spreadsheet), the labeling wasn't changed and I commented on the areas I've gone in and traded--which is everything except for taxable accts. Am I missing something?

Sahara
Posts: 125
Joined: Tue Dec 04, 2018 6:21 pm

Re: My entire portfolio, per your review, be gentle!

Post by Sahara » Wed Jul 01, 2020 10:34 am

The box under her 401K says "rebalanced to stock, didn't sell bonds yet." I was relating that to your description of what you want to do in the taxable account. But I think it refers to the fact that bonds don't show there, but they are there yet to be moved. The numbers reflect what it will look like after that.

Topic Author
barliss2
Posts: 55
Joined: Tue Jan 21, 2020 5:10 pm

Re: My entire portfolio, per your review, be gentle!

Post by barliss2 » Wed Jul 01, 2020 10:40 am

The box under her 401K says "rebalanced to stock, didn't sell bonds yet." I was relating that to your description of what you want to do in the taxable account. But I think it refers to the fact that bonds don't show there, but they are there yet to be moved. The numbers reflect what it will look like after that.
Yes, that's exactly what happened! I wanted the AFTER to stay put as a reminder of what it's supposed to look like. Such an easy spreadsheet to follow--I cannot thank you enough!

Sahara
Posts: 125
Joined: Tue Dec 04, 2018 6:21 pm

Re: My entire portfolio, per your review, be gentle!

Post by Sahara » Wed Jul 01, 2020 10:52 am

It won't work for everyone but I'm glad it works for you!

sycamore
Posts: 680
Joined: Tue May 08, 2018 12:06 pm

Re: My entire portfolio, per your review, be gentle!

Post by sycamore » Wed Jul 01, 2020 1:02 pm

barliss2 wrote:
Tue Jun 30, 2020 8:38 pm
Yeah, I read up a little on TLH, but haven't done them yet. I needed to get these accts in order first!

I no longer hold bonds or international stocks in any other accounts except my taxable accts, but I'm trying to sell the bonds in the 3 taxable accts and then get more intl stock to go with my current game plan.

https://docs.google.com/spreadsheets/d/ ... sp=sharing

The only funds that has taken a hit so far is the international stock (total in my acct = -$916, total in joint acct = −$1,649.54, total in husband's acct = −$789.06) and the REIT (in my acct = -$574), while the bonds have gains (total in joint = +$5,950.66, total in husband's = +$796.21, and total in my acct = +$1,929.23) so I feel like I'm in a bit of a pickle selling a bunch of gains instead of selling those intl stock to get the TLH...I'm not quite sure how to fix this, but I feel like I'm so close!
One step is to sell Intl stock in all three accounts. That'll give you roughly -916 - 1649 - 789 = 3354 in losses.
Now sell the bonds in your husband's and your account to get 796 + 1929 = 2725 in gains.
That leaves you with a remaining 629 in losses.

You could use up that loss by selling more bonds in joint. Or you could use those losses to offset any income (each year you can use up to $3000 in capital losses to offset regular income).

Consider selling all of your bond fund in joint. That'd be a gain of 5950 - 629 = 5321. Are all of those gains long-term gains? Assuming you're in the 15% bracket, you'd pay 15% * 5321 = $800. Would you be okay paying $800 in taxes to clean up your portfolio? It's not actually that bad because the clean up means paying a bit less in taxes by moving bonds out of taxable.

Sahara
Posts: 125
Joined: Tue Dec 04, 2018 6:21 pm

Re: My entire portfolio, per your review, be gentle!

Post by Sahara » Wed Jul 01, 2020 6:15 pm

I've taken a moment to split the taxable into 3 accounts for your convenience. You can move the amounts around and it should recalculate the totals and percentages for you.

Notice that you have 26,600 in contributions in taxable instead of 26,300, so you'll want to address that.

https://docs.google.com/spreadsheets/d/ ... sp=sharing

Best,
Sahara

Silverado
Posts: 304
Joined: Fri Oct 18, 2013 6:07 pm

Re: My entire portfolio, per your review, be gentle!

Post by Silverado » Wed Jul 01, 2020 6:59 pm

For the amount of gain you have in the bonds, I’d likely just tear off the band aid at this point to keep up your great progress. Still lots of time left in the year to figure out TLH...or not. The benefits of getting things simplified and arrayed better outweigh (to me) the tax bill. If you have no chance to TLH come December, well, you should be happy because you have gains.

Full disclosure: I still have upper five figures in TRP Science and Tech that is basically all gains, and I can’t stomach that tax bill yet. Last remaining money TRP. Horrible problem to have...

Topic Author
barliss2
Posts: 55
Joined: Tue Jan 21, 2020 5:10 pm

Re: My entire portfolio, per your review, be gentle!

Post by barliss2 » Fri Jul 03, 2020 11:24 am

sycamore wrote:
Wed Jun 24, 2020 3:30 pm
barliss,

Currently your AA is 45.55% US stocks, 27.47% Intl stocks (about 38% of stocks), and 26.87% bonds/cash. Your desired asset allocation is 90% stocks / 10% bonds, with international allocation of 40% of stocks.

That's a big jump - do you definitely want to do that?

Also, what other bond funds do you have in your 401k? You have the Mortgage Backed Securities Fund, but is there a Total Bond Market Fund or maybe Intermediate-Term Bond Index Fund? Your 401k is a good place to put ongoing contributions toward bonds but most Bogleheads wouldn't use the MBS fund as a "core" bond fund.
I just took a second look at all the bonds that are offered in my 401k. Here they are:
SWRSX
VSGDX
MWTIX
PHYZX

To me, out of these, SWRSX seems like the winner, but lmk what you think. Thanks for your endless help on this!

sycamore
Posts: 680
Joined: Tue May 08, 2018 12:06 pm

Re: My entire portfolio, per your review, be gentle!

Post by sycamore » Fri Jul 03, 2020 12:43 pm

barliss2 wrote:
Fri Jul 03, 2020 11:24 am
sycamore wrote:
Wed Jun 24, 2020 3:30 pm
barliss,

Currently your AA is 45.55% US stocks, 27.47% Intl stocks (about 38% of stocks), and 26.87% bonds/cash. Your desired asset allocation is 90% stocks / 10% bonds, with international allocation of 40% of stocks.

That's a big jump - do you definitely want to do that?

Also, what other bond funds do you have in your 401k? You have the Mortgage Backed Securities Fund, but is there a Total Bond Market Fund or maybe Intermediate-Term Bond Index Fund? Your 401k is a good place to put ongoing contributions toward bonds but most Bogleheads wouldn't use the MBS fund as a "core" bond fund.
I just took a second look at all the bonds that are offered in my 401k. Here they are:
SWRSX
VSGDX
MWTIX
PHYZX

To me, out of these, SWRSX seems like the winner, but lmk what you think. Thanks for your endless help on this!
Quick answer: I agree SWRSX is a good choice. MWTIX is also reasonable.

What I find helpful is to compare what's in the bond funds. Morningstar is a good place for this.
SWRSX - Schwab® Treasury Infl Protected Secs Idx - https://www.morningstar.com/funds/xnas/SWRSX/portfolio
VSGDX - Vanguard Short-Term Federal Adm - https://www.morningstar.com/funds/xnas/vsgdx/portfolio
MWTIX - Metropolitan West Total Return Bd - https://www.morningstar.com/funds/xnas/mwtix/portfolio
PHYZX - PGIM High Yield Z - https://www.morningstar.com/funds/xnas/phyzx/portfolio

Of those, PHYZX is no go - high yield bonds won't provide the stability and safety that I look for in bonds.

The VSGDX is a reasonable enough fund by itself (low ER, safe as it invests only in US Federal agency bonds) but as a part of retirement portfolio, I wouldn't use it because you want a bond fund with a duration that's more closely aligned with your investing horizon. In your case, that's presumably many decades and VSGDX is a short-term bond fund.

SWRSX also has a low ER. It invests in safe US Treasury Inflation Protected Securities - no credit risk there. And the duration is intermediate rather than short so that's a better fit for your portfolio. I personally wouldn't put too much of my fixed income into just TIPS - I prefer wider exposure to regular (non-inflation adjusted) Treasury bonds plus some corporate bonds. A frequency recommendation here on bogleheads is - if you want to use TIPS - then split your bonds 50/50 to Total Bond Market / TIPS.

MWTIX is an actively managed fund with an ER is quite a bit higher (0.44%) than SWRSX. But it does provide exposure to the wider bond market - it contains a mix of govt, corporate, and mortgate-backed securities. In that way it's closer to a Total Bond Market fund. Its duration is also intermediate which is better for you.

As many bogleheads say, if you like to "take risk only in equities", you'd want to go with SWRSX.
If you're open to a bit more risk with bonds, MWTIX is a good choice. Or split them 50/50.

I think either choice will work out fine -- your bond portion is only 10% of your portfolio after all.

Congrats on getting your portfolio cleaned up :)

lakpr
Posts: 5389
Joined: Fri Mar 18, 2011 9:59 am

Re: My entire portfolio, per your review, be gentle!

Post by lakpr » Fri Jul 03, 2020 6:32 pm

barliss2 wrote:
Fri Jul 03, 2020 11:24 am
I just took a second look at all the bonds that are offered in my 401k. Here they are:
SWRSX
VSGDX
MWTIX
PHYZX
Aren't there any Target Retirement Income funds in your 401k plan? Will you not be able to use them as a bond proxy?

@sycamore has given an excellent summary of the funds above and narrowed down the choices to SWRSX and MWTIX. But I am wondering if there is a Target Retirement Income fund that is about 20:80 or 30:70 in your plan, you can PRETEND that is your entire bond allocation even though TECHNICALLY it's a blended fund. Usually Target Retirement Income funds come with a 0.15% or so expense ratio.

I'd hate to pay three times the expense ratio of a target retirement fund to MWTIX. Especially in today's times. Vanguard Total Bond Market yield is about 1.4%; so if we assume MWTIX just about keeps pace with Vanguard's total bond index fund, one-third of those returns will be eaten up by MWTIX's fees. One-third of YOUR returns in fees.

Topic Author
barliss2
Posts: 55
Joined: Tue Jan 21, 2020 5:10 pm

Re: My entire portfolio, per your review, be gentle!

Post by barliss2 » Sat Jul 04, 2020 10:06 pm

sycamore wrote:
Wed Jul 01, 2020 1:02 pm
barliss2 wrote:
Tue Jun 30, 2020 8:38 pm
Yeah, I read up a little on TLH, but haven't done them yet. I needed to get these accts in order first!

I no longer hold bonds or international stocks in any other accounts except my taxable accts, but I'm trying to sell the bonds in the 3 taxable accts and then get more intl stock to go with my current game plan.

https://docs.google.com/spreadsheets/d/ ... sp=sharing

The only funds that has taken a hit so far is the international stock (total in my acct = -$916, total in joint acct = −$1,649.54, total in husband's acct = −$789.06) and the REIT (in my acct = -$574), while the bonds have gains (total in joint = +$5,950.66, total in husband's = +$796.21, and total in my acct = +$1,929.23) so I feel like I'm in a bit of a pickle selling a bunch of gains instead of selling those intl stock to get the TLH...I'm not quite sure how to fix this, but I feel like I'm so close!
One step is to sell Intl stock in all three accounts. That'll give you roughly -916 - 1649 - 789 = 3354 in losses.
Now sell the bonds in your husband's and your account to get 796 + 1929 = 2725 in gains.
That leaves you with a remaining 629 in losses.

You could use up that loss by selling more bonds in joint. Or you could use those losses to offset any income (each year you can use up to $3000 in capital losses to offset regular income).

Consider selling all of your bond fund in joint. That'd be a gain of 5950 - 629 = 5321. Are all of those gains long-term gains? Assuming you're in the 15% bracket, you'd pay 15% * 5321 = $800. Would you be okay paying $800 in taxes to clean up your portfolio? It's not actually that bad because the clean up means paying a bit less in taxes by moving bonds out of taxable.
Yeah, I feel like it's the time to rip the band-aid. I just cleaned up my taxable. Next up, my husband's and the joint. THEN, probably coming back to ask ya'll more about TLH ;-) Thank you again for putting things into perspective! And for sahara for making the best (updated) spreadsheet I could've ever asked for!

Topic Author
barliss2
Posts: 55
Joined: Tue Jan 21, 2020 5:10 pm

Re: My entire portfolio, per your review, be gentle!

Post by barliss2 » Mon Jul 06, 2020 9:50 pm

sycamore wrote:
Wed Jun 24, 2020 10:12 am
One thing missing from your original post that may matter is how much you have in Facebook in the taxable account. Right now we only know that 59% of the account is in "stocks" but you want to list the exact amount for each holding.

His Taxable 5.51% total portfolio
3.25% in stocks: Facebook (FB), Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
1.10% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
1.16% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)
Ok, this is the last account I need to clean up (well, I still haven't sold his stocks in his Roth...but this is the last taxable account to contend with) and I'm a bit gun shy. To your question about FB, he has the following:

Facebook (FB): $18,261 (fwiw, he originally put in $5k when they became an IPO so not too shabby considering all their ups and downs...but mainly ups)
Vanguard Total Bond (VBTLX): $9906
Vanguard Total Intl (VTIAX): $10234
Vanguard Total Stock (VTSAX): $11234

I know they say advertising has been pulling out of FB this week, but we've been through this before year after year--some huge scandal and yet here we are, a slight tick up today. My husband originally bought it at $38, sold at $200, bought again (that was our financial advisor's doing, soon after I discovered FIRE and ditched him) and now it's at $240. I know this is more of a personal decision, but I'm also on here looking for advice so if you have it I'm all ears. My husband says just do it, I am kinda thinking we'll sell it, but then again, there's something holding me back. Ugh. I hate these head over heart decisions. Thanks again!

sycamore
Posts: 680
Joined: Tue May 08, 2018 12:06 pm

Re: My entire portfolio, per your review, be gentle!

Post by sycamore » Tue Jul 07, 2020 10:44 am

barliss2 wrote:
Mon Jul 06, 2020 9:50 pm
sycamore wrote:
Wed Jun 24, 2020 10:12 am
One thing missing from your original post that may matter is how much you have in Facebook in the taxable account. Right now we only know that 59% of the account is in "stocks" but you want to list the exact amount for each holding.

His Taxable 5.51% total portfolio
3.25% in stocks: Facebook (FB), Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (.04)
1.10% in Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (.11)
1.16% in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) (.05)
Ok, this is the last account I need to clean up (well, I still haven't sold his stocks in his Roth...but this is the last taxable account to contend with) and I'm a bit gun shy. To your question about FB, he has the following:

Facebook (FB): $18,261 (fwiw, he originally put in $5k when they became an IPO so not too shabby considering all their ups and downs...but mainly ups)
Vanguard Total Bond (VBTLX): $9906
Vanguard Total Intl (VTIAX): $10234
Vanguard Total Stock (VTSAX): $11234

I know they say advertising has been pulling out of FB this week, but we've been through this before year after year--some huge scandal and yet here we are, a slight tick up today. My husband originally bought it at $38, sold at $200, bought again (that was our financial advisor's doing, soon after I discovered FIRE and ditched him) and now it's at $240. I know this is more of a personal decision, but I'm also on here looking for advice so if you have it I'm all ears. My husband says just do it, I am kinda thinking we'll sell it, but then again, there's something holding me back. Ugh. I hate these head over heart decisions. Thanks again!
Short answer: looks like FB is less than 2% of your whole portfolio, so while owning FB is risky in itself, your portfolio isn't at great risk.

Rambling answer: I used to buy individual stocks but my intent was to build a portfolio of them (about 15 stocks if I remember). It wasn't the largest part of my portfolio but it was a significant $ amount. After some years of "running" my own stock portfolio I realized (1) I wasn't doing as well as "the market" (some years I had some great gains, other years some great losses); (2) should I die, my spouse would not be interested in dealing with it; (3) I had better things to do with my time that try to pick stock winners and deal with tax reporting. I ended up selling the losers to cancel out gains in a number of the stocks. The remaining 3 stocks (with the biggest gains) I donated to charity over a period of time.

That's my experience with individual stocks. It's feels a bit different than you and your husband's single FaceBook holding. To me, it feels too risky owning a single stock nowadays. FB is a large established company with a good "moat" and good prospects, but they have their issues and will continue to have them.

Some thoughts...

Option 1: consider FB as part of a "play money" account - a strictly limited amount of your assets. You pick the $ limit. I don't do that myself but if I did I'd assume that the play money might be a 100% loss someday. I wouldn't count it as part of my retirement portfolio; treat it as a consumption item.

Option 2: ask yourself "why should I buy/hold FB?" and "what would it take to sell FB?" If you can't give good defensible answers, you shouldn't be owning individual stocks :)

Option 3: every years sell a few thousand dollars worth of FB. I'm not sure how much of it would be capital gain but presumably it wouldn't add so much to your gross income to push you into a higher tax bracket. I think currently you'd pay 15% capital gains tax on any gain.

Option 4: donate the whole thing to charity. Side note: the amount is large enough that coupled with your state taxes and property taxes, you would probably exceed the standard deduction and make itemizing deductions worthwhile (if you aren't already).

Good luck!

Post Reply