Portfolio Analysis please

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Topic Author
EricLThomp
Posts: 51
Joined: Tue Sep 18, 2018 10:10 pm

Portfolio Analysis please

Post by EricLThomp »

[Title was "Advisor moved me from all S&P to these...thoughts?", see update below. --admin LadyGeek]

UPDATE: posting the request for review here at the top, because it feels like the merge buried it. Thanks.

Emergency funds:
$26,000 with CapOne 360 (currently earning .8% ugh) <-- any advice on where to hold this for liquidity but better returns?
monthly expenses roughly $3,000

Income:
his W2 - $60k
her W2 - $36k
both 1099 side hustle income reported in 2019 - $23k
Net income for 2019 (after 401k contributions, etc.) - $72k (was on unemployment for 6 weeks)

Debt:
mortgage 2.5%, $74,000 (Just now completing refi from a 5.88%, but already half way through a 30 year loan).....auto 2.9% $15,000

Tax Filing Status:
MFJ

Tax Rate:
I believe 12% Federal (does that seem correct?), 0% State

State of Residence:
Texas

Age:
him 45, her 41

Desired Asset allocation:
Not sure. One reason I’m here. I don't mind being aggressive. The money will stay in the market, earning even after I retire in 10 years.

Desired International allocation:
Not sure. One reason I’m here.

Please provide a hint as to the size of your current total portfolio:
$167,043.19

Current retirement assets

His 401k at Fidelity
24.33% FID 500 INDEX (FXIAX) (0.015%)

Her 401k with TCDRS/pension
15.37% Contributing $205/mo. bi-weekly. Employer matches 250%, earns 7% interest and is NOT changeable.

Her 457 at Nationwide
27.27% Nationwide S&P 500 Index Fund (GRISX) (0.45%)

His Roth IRA at M1
5.42% Vanguard Total Stock Market Index Fund (VTI) (0.03%)
1.28% SPDR Portfolio Long Term Treasury ETF (SPTL) (0.06)
.85% Vanguard Total International Stock Index Fund (VXUS) (0.08)
.44% Vanguard REIT Index Fund (VNQ) (0.12)
.43% Vanguard High Dividend Yield Index ETF (VYM) (0.06)

His Traditional IRA at M1
1.16% SPDR S&P 500 ETF Trust (SPY) (0.09)
.17% Vanguard REIT Index Fund (VNQ) (0.12)
.18% Vanguard Small-Cap ETF (VB) (0.05)
.17% Vanguard Small Cap Value Index Fund (VBR) (0.07)
.18% Schwab US Large-Cap Value ETF (SCHV) (0.04)

His HSA with OptumBank
(can't invest until $2k reached. Just opened in February, maxing out)
1.12% contributed, but not yet invested. Will update soon when investment options become available.

Her Roth IRA at M1
5.42% Vanguard Total Stock Market Index Fund (VTI) (0.03%)
1.28% SPDR Portfolio Long Term Treasury ETF (SPTL) (0.06)
.85% Vanguard Total International Stock Index Fund (VXUS) (0.08)
.43% Vanguard REIT Index Fund (VNQ) (0.12)
.42% Vanguard High Dividend Yield Index ETF (VYM) (0.06)

Her Traditional IRA at M1
1.17% SPDR S&P 500 ETF Trust (SPY) (0.09).17% Vanguard REIT Index Fund (VNQ) (0.12)
.18% Vanguard Small-Cap ETF (VB) (0.05)
.16% Vanguard Small Cap Value Index Fund (VBR) (0.07)
.17% Schwab US Large-Cap Value ETF (SCHV) (0.04)

Her HSA with Lively/invested at TD Ameritrade
3.63% Vanguard Total Stock Market ETF (VTI) (0.03)

Taxable at M1 Finance
xx% cash (for investing – do not include emergency funds) Cash Flowing about $1,000 into the market monthly.
Additional $10,000 possibly to dump in at the right buying opportunity, since EF is a bit over-funded.
1.17% Vanguard Total Stock Market Index Fund (VTI) (0.03)
5.30% Various stocks at M1 Finance (MSFT, TSLA, GOOG, and probably 50 others. "Vegas money" so to speak).
.64% iShares Core S&P 500 ETF (IVV) (0.04)
.64% ProShares S&P 500 Dividend Aristocrats ETF (NOBL) (0.35)

Contributions

New annual Contributions
$19,500 (plus yearly IRS limit increases) his 401k (3% match)
$2,460 her 401k (250% match) - can't add more, because it's set by employer.
$19,500 (plus yearly IRS limit increases) her 457 (0% match)
$6,000 (or IRA match as increased yearly) his IRA/Roth IRA
$6,000 (or IRA match as increased yearly) her IRA/Roth IRA
$3,550 (plus yearly IRS limit increases) his HSA
$3,550 (plus yearly IRS limit increases) his HSA
$12,000 taxable (for retirement, not short term goals)ALL annual catch-up contributions when we hit 50, etc.

Available funds

Funds available in his 401(k)
AF FUNDMNTL INV R6 (RFNGX) (.28)
BARON GROWTH INST (BGRIX) (1.04)
DLWR EMRG MKTS INST (DEMIX) (1.37)
FID 500 INDEX (FXAIX) (.015) ***************************current 100% investment
FID CONTRAFUND K (FCNKX) (.77)
FID DIVERSIFD INTL K (FDIKX) (.63)
FID EXTD MKT IDX (FSMAX) (.036)
FID GROWTH CO K (FGCKX) (.75)
FID MID CAP STOCK K (FKMCX) (.82)
HTFD INTL OPPS Y (HAOYX) (.77)
I O INTL DVSFD Y (OIDYX) (.99)
J H TRITON T (JATTX) (.91)
JPM SM CAP CORE R5 (VSSCX) (.80)
TRP VALUE (TRVLX) (.78)
WF SPL SM CAP VAL R6 (ESPRX) (.87)
FID FREEDOM 2005 K (FSNJX) (.42)
FID FREEDOM 2010 K (FSNKX) (.45)
FID FREEDOM 2015 K (FSNLX) (.49)
FID FREEDOM 2020 K (FSNOX) (.52)
FID FREEDOM 2025 K (FSNPX) (.56)
FID FREEDOM 2030 K (FSNQX) (.59)
FID FREEDOM 2035 K (FSNUX) (.63)
FID FREEDOM 2040 K (FSNVX) (.65)
FID FREEDOM 2045 K (FSNZX) (.65)
FID FREEDOM 2050 K (FNSBX) (.65)
FID FREEDOM 2055 K (FNSDX) (.65)
FID FREEDOM 2060 K (FNSFX) (.65)
FID FREEDOM 2065 K (FFSDX) (.65)
FID FREEDOM INC K (FNSHX) (.42)
FID PURITAN K (FPUKX) (.45)
FID INFL PR BD IDX (FIPDX) (.05)
FIDELITY GOVT INCOME (FGOVX) (.45)
LD ABT SH DTN INC R5 (LDLTX) (.40)
PIM TOTAL RT INST (PTTRX) (.71)
FID GOVT MMKT (SPAXX) (.42)

Funds available in her 457
Nationwide Destination 2025 Fund - Institutional Service Class (NWSHX) (.66)
Nationwide Destination 2030 Fund - Institutional Service Class (NWISX) (.67)
Nationwide Destination 2035 Fund - Institutional Service Class (NWLSX) (.66)
Nationwide Destination 2040 Fund - Institutional Service Class (NWMSX) (.66)
Nationwide Destination 2045 Fund - Institutional Service Class (NWNSX) (.66)
Nationwide Destination 2050 Fund - Institutional Service Class (NWOSX) (.65)
Nationwide Destination 2055 Fund - Institutional Service Class (NTDSX) (.65)
Nationwide Destination 2060 Fund - Institutional Service Class (NWWVX) (.65)
Nationwide Destination Retirement Fund - Institutional Service Class (NWESX) (.66)
Nationwide Investor Destinations Aggressive Fund: Service Class (NDASX) (.93)
Nationwide Investor Destinations Conservative Fund: Service Class (NDCSX) (.90)
Nationwide Investor Destinations Moderate Fund: Service Class (NSDMX) (.91)
Nationwide Investor Destinations Moderately Aggressive Fund: Service Class (NDMSX) (.93)
Nationwide Investor Destinations Moderately Conservative Fund: Service Class (NSDCX) (.91)
Cohen & Steers Real Estate Securities Fund, Inc. - Class A (CSEIX) (1.12)
Invesco Oppenheimer Global Fund - Class A (OPPAX) (1.06)
MFS International Intrinsic Value Fund - Class R3 (MINGX) (.98)
Nationwide AllianzGI International Growth Fund - Institutional Service Class (NWAKX) (.97)
Nationwide International Index Fund (GIIAX) (.75)New World Fund(SM) - Class R4 (RNWEX) (.95)
Nationwide Small Cap Index Fund (GMRAX) (.70)
Nationwide Small Company Growth Fund Institutional Service Class (NWSIX) (1.19)
Nationwide US Small Cap Value Fund - Institutional Service Class (NWUSX) (1.26)
Nationwide Variable Insurance Trust: Nationwide Multi-Manager NVIT Small Company Fund (NVIT) (1.09)
Neuberger Berman Equity Trust(R) - Genesis Fund (NBGEX) (1.10)
JPMorgan Mid Cap Value Fund (JAMCX) (1.24)
Nationwide Mid Cap Market Index Fund (GMXAX) (.68)
Wells Fargo Discovery Fund - Administrative Class (WFDDX) (1.13)
American Century Value Fund (TWVLX) (.98)
Edgar Lomax Value Fund (LOMAX) (.71)
Invesco Growth and Income Fund - Class A (ACGIX) (.82)
Nationwide Fund - Institutional Service Class (MUIFX) (.68)
Nationwide Large Cap Growth Portfolio (Can't find ticker) (.95)
Nationwide Loomis All Cap Growth Fund – Eagle Class Shares (NWADX) (.95)
Nationwide S & P 500 Index Fund (GRISX) (.45) ***************************current 100% investment
Neuberger Berman Sustainable Equity Fund - Investor Class (NBSRX) (.86)
T.Rowe Price Growth Stock Fund (TRSAX) (.92)
Invesco Quality Income Fund - Class Y (VUSIX) (.51)
Lord Abbett High Yield Fund - Class R5 (LHYTX) (.71)
Nationwide Bond Index Fund (GBIAX) (.66)
Nationwide Loomis Core Bond Fund - Institutional Service Class (NWJJX) (.75)
PIMCO International Bond Fund (U.S. Dollar-Hedged) - Class A (PFOAX) (.95)
Morley Stable Value Retirement Fund - NACO/DCVA (N/A)
Nationwide Fixed Account 2Za (current quarter - 3.16 yield)
Nationwide Government Money Market Fund - Investor Shares (MIFXX) (.57)

Questions etc:
1. Would like to grow as much as possible so retirement can happen in Dec 2030 (this is her retirement eligibility for pension and we want to get an Airstream and travel full time). Going to try and do it on $36k/yr. basically spending that now, even with mortgage.
2. Should he allocate a certain percentage of 401k to Roth, or keep it traditional (for tax planning)?
3. Should we both contribute anything more to Traditional IRA, or just Roth from here on out? As far as tax strategy, what percentage should be in the IRAs (traditional IRA vs Roth IRA)
4. Draw-down strategy? When to pull how much from each account when retirement hits.
5. Can we figure out what the balances could project to be at time of retirement (2030)?
6. How should I diversify more? Definitely need my contributions earning as much as poss, with my 10 yr time horizon.
7. Any other suggestions, tips, guidance and education? - VERY greatly appreciated.

Eric

_____________________________________________________________________
OLD POST...no longer relevant. Point taken, thanks everyone............

So just got a financial advisor. My wife and I are retiring 10 years from now. Will be 55 and 51. We only have about $180K in retirement accounts (but maxing everything now for the next 10 years). The advisor wanted us to move both our 401K accounts from S&P 500 to this. Want to make sure I’m not going to get wiped in fees from the 401k providers because of these funds. The advisor is on retainer through my work, so her services are all FREE to me. Just wanted to see thoughts from the pros here. Thanks.

Mine:
20% RFNGX
15% FGCKX
15% FSMAX
15% FDIKX
10% PTTRX
10% FGOVX
105 FIPDX

Hers:
CURRENT/FUTURE FUND
0%/20% Nationwide Large Cap Growth
0%/25% Nationwide S&P 500 Index
20%/12% MFS International Intrinsic Value
20%/13% Nationwide AllianzGI International Growth
15%/08% Nationwide Small Co Growth
15%/07% Neuberger Berman Equity Trust – Genesis
15%/05% Wells Fargo Discovery Fund
15%/10% Nationwide Mid Cap Index
Last edited by EricLThomp on Wed Jul 29, 2020 2:46 pm, edited 6 times in total.
User avatar
Sandtrap
Posts: 11763
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii No Ka Oi , N. Arizona

Re: Advisor moved me from all S&P to these...thoughts?

Post by Sandtrap »

1. Tread carefully
2. Edward Jones?
3. **Read the wiki and “getting started” before committing and shifting funds. Follow the wiki “getting started” and when you finish all the links you will know 90% or more of the most vital investment finance concepts.
Here are links to the wiki's "Getting Started" and "Investing Startup Kit" pages:
https://www.bogleheads.org/wiki/Getting_started
https://www.bogleheads.org/wiki/Bogleh ... rt-up_kit
Define General Investment Goals and Objectives (what is your plan?)
https://www.bogleheads.org/wiki/Invest ... statement

4. Why do you need a financial advisor?
5. **Search the forum archives for “financial advisor” and read and keep reading the threads. And then read more.
6. **You have nothing to lose and everything to gain by posting for a “Portfolio Review” in the forum format.
Portfolio Review Request
https://www.bogleheads.org/forum/viewt ... =1&t=6212

Be sure to list the funds available to you in the “portfolio review”.
Also present and desired allocation.

* (You can edit your original post using the "pencil icon" so that it is in or includes the "portfolio review format" rather than insert more information through the thread so that there will be all the comprehensive information at the beginning. That way, you'll be getting the best help possible.)

If anything, going through the process will leave you better armed/prepared for the financial advisor sales Processes and products and strategies and commissions and kickbacks and front and back end fees and overpriced funds and complex portfolio structures.

**The funds you have and the funds suggested can be greatly improved upon, streamlined, simplified, and at lower expense ratios, ... and without FA fees etc etc.

Education:
Suggested Reading List
https://www.bogleheads.org/RecommendedReading.php
Forum Library of Investing Advice with links
https://www.bogleheads.org/wiki/Main_Page

J🌺
Last edited by Sandtrap on Tue Jul 28, 2020 9:51 pm, edited 7 times in total.
Wiki Bogleheads Wiki: Everything You Need to Know
Topic Author
EricLThomp
Posts: 51
Joined: Tue Sep 18, 2018 10:10 pm

Re: Advisor moved me from all S&P to these...thoughts?

Post by EricLThomp »

Sandtrap wrote: Tue Jul 28, 2020 7:57 pm 1. Tread carefully
2. Edward Jones?
3. Read the wiki and “getting started” before committing and shifting funds.
4. Why do you need a financial advisor?
5. Search the forum archives for “financial advisor” and read and keep reading the threads. And then read more.
6. You have nothing to lose and everything to gain by posting for a “Portfolio Review” in the forum format.
If anything, going through the process will leave you better armed/prepared for the financial advisor sales Processes and products and strategies and commissions and kickbacks and front and back end fees and overpriced funds and complex portfolio structures.

J🌺
It’s RBC Wealth Management. It’s free through work, so not worried about fees. It’s free, so why not?
000
Posts: 2818
Joined: Thu Jul 23, 2020 12:04 am

Re: Advisor moved me from all S&P to these...thoughts?

Post by 000 »

Sandtrap wrote: Tue Jul 28, 2020 7:57 pm 1. Tread carefully
2. Edward Jones?
3. Read the wiki and “getting started” before committing and shifting funds. Follow the wiki “getting started” and when you finish all the links you will know 90% or more of the most vital investment finance concepts.
4. Why do you need a financial advisor?
5. Search the forum archives for “financial advisor” and read and keep reading the threads. And then read more.
6. You have nothing to lose and everything to gain by posting for a “Portfolio Review” in the forum format.
If anything, going through the process will leave you better armed/prepared for the financial advisor sales Processes and products and strategies and commissions and kickbacks and front and back end fees and overpriced funds and complex portfolio structures.

J🌺
+1

Consider posting more info like this.
Mako
Posts: 337
Joined: Wed Feb 28, 2007 9:34 am
Location: MD

Re: Advisor moved me from all S&P to these...thoughts?

Post by Mako »

EricLThomp wrote: Tue Jul 28, 2020 8:00 pm
Sandtrap wrote: Tue Jul 28, 2020 7:57 pm 1. Tread carefully
2. Edward Jones?
3. Read the wiki and “getting started” before committing and shifting funds.
4. Why do you need a financial advisor?
5. Search the forum archives for “financial advisor” and read and keep reading the threads. And then read more.
6. You have nothing to lose and everything to gain by posting for a “Portfolio Review” in the forum format.
If anything, going through the process will leave you better armed/prepared for the financial advisor sales Processes and products and strategies and commissions and kickbacks and front and back end fees and overpriced funds and complex portfolio structures.

J🌺
It’s RBC Wealth Management. It’s free through work, so not worried about fees. It’s free, so why not?
It’s not free, the funds have costs. I only looked up the nationwide S&P 500 and it appears to have a 0.64 expense ratio. The Vanguard 500 index fund is the same thing and is 0.04. No idea about loads either.
User avatar
Sandtrap
Posts: 11763
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii No Ka Oi , N. Arizona

Re: Advisor moved me from all S&P to these...thoughts?

Post by Sandtrap »

EricLThomp wrote: Tue Jul 28, 2020 8:00 pm
Sandtrap wrote: Tue Jul 28, 2020 7:57 pm 1. Tread carefully
2. Edward Jones?
3. Read the wiki and “getting started” before committing and shifting funds.
4. Why do you need a financial advisor?
5. Search the forum archives for “financial advisor” and read and keep reading the threads. And then read more.
6. You have nothing to lose and everything to gain by posting for a “Portfolio Review” in the forum format.
If anything, going through the process will leave you better armed/prepared for the financial advisor sales Processes and products and strategies and commissions and kickbacks and front and back end fees and overpriced funds and complex portfolio structures.

J🌺
It’s RBC Wealth Management. It’s free through work, so not worried about fees. It’s free, so why not?
Free
But may end up either costing you in the long run or not optimizing what you could have.
Will not know unless you post a portfolio review. The portfolio reviewers here have a cumulative base far larger than ......
Free is not always optimal.

Welcome.😊
You’ve come to a good place at a good time.
Good luck.
j🌺
Wiki Bogleheads Wiki: Everything You Need to Know
absolute zero
Posts: 506
Joined: Thu Dec 29, 2016 4:59 pm

Re: Advisor moved me from all S&P to these...thoughts?

Post by absolute zero »

Mako wrote: Tue Jul 28, 2020 8:07 pm
EricLThomp wrote: Tue Jul 28, 2020 8:00 pm
Sandtrap wrote: Tue Jul 28, 2020 7:57 pm 1. Tread carefully
2. Edward Jones?
3. Read the wiki and “getting started” before committing and shifting funds.
4. Why do you need a financial advisor?
5. Search the forum archives for “financial advisor” and read and keep reading the threads. And then read more.
6. You have nothing to lose and everything to gain by posting for a “Portfolio Review” in the forum format.
If anything, going through the process will leave you better armed/prepared for the financial advisor sales Processes and products and strategies and commissions and kickbacks and front and back end fees and overpriced funds and complex portfolio structures.

J🌺
It’s RBC Wealth Management. It’s free through work, so not worried about fees. It’s free, so why not?
It’s not free, the funds have costs. I only looked up the nationwide S&P 500 and it appears to have a 0.64 expense ratio. The Vanguard 500 index fund is the same thing and is 0.04. No idea about loads either.
+1

I only looked up one fund as well - the Wells Fargo Discovery fund. 5.75% front load and 1.2% expense ratio.

OP, to answer your question - yes, you are getting “wiped” in fees. I would fire this advisor ASAP.
livesoft
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Joined: Thu Mar 01, 2007 8:00 pm

Re: Advisor moved me from all S&P to these...thoughts?

Post by livesoft »

absolute zero wrote: Tue Jul 28, 2020 8:12 pm I only looked up one fund as well - the Wells Fargo Discovery fund. 5.75% front load and 1.2% expense ratio.

OP, to answer your question - yes, you are getting “wiped” in fees. I would fire this advisor ASAP.
It is not clear if the OP is paying the front-end loads or not as many 457 and 401(k) and 403(b) plans waive the front-end loads. But many employer plans do not waive them. We don't know about the OP's plan(s).

This is just a hot mess and the OP is being taken advantage of under the guise of "free." What an absolute shame. About the only answer to all this is self-education.
Wiki This signature message sponsored by sscritic: Learn to fish.
Katietsu
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Re: Advisor moved me from all S&P to these...thoughts?

Post by Katietsu »

absolute zero wrote: Tue Jul 28, 2020 8:12 pm +1

I only looked up one fund as well - the Wells Fargo Discovery fund. 5.75% front load and 1.2% expense ratio.

OP, to answer your question - yes, you are getting “wiped” in fees. I would fire this advisor ASAP.
The advisor was provided through his company. The high fee mutual funds are in her 401k. Not sure her 401k has any great choices but we need more details. It does look like the advisor suggestion is a lot more reasonable than the current investment selections.

OP, please follow Sandtrap’s advice and list in the recommended format. Also, depending on your tax bracket, whether you qualify to make a Roth contribution or can use a back door Roth, and whether or not you expect pensions, a Roth IRA might be a priority over your wife’s not great 401k.
Tdubs
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Joined: Tue Apr 24, 2018 7:50 pm

Re: Advisor moved me from all S&P to these...thoughts?

Post by Tdubs »

Are these ERs correct for you? If so, why do you want them?

RFNGX: 0.28
FGCKX: 0.75
FSMAX: 0.046
FDIKX: 0.63
PTTRX: 0.71
FGOVX: 0.45
FIPDX: 0.05
Mako
Posts: 337
Joined: Wed Feb 28, 2007 9:34 am
Location: MD

Re: Advisor moved me from all S&P to these...thoughts?

Post by Mako »

Katietsu wrote: Tue Jul 28, 2020 8:22 pm The advisor was provided through his company. The high fee mutual funds are in her 401k. Not sure her 401k has any great choices but we need more details. It does look like the advisor suggestion is a lot more reasonable than the current investment selections.

OP, please follow Sandtrap’s advice and list in the recommended format. Also, depending on your tax bracket, whether you qualify to make a Roth contribution or can use a back door Roth, and whether or not you expect pensions, a Roth IRA might be a priority over your wife’s not great 401k.
Unfortunately this is true. In that case it may be best to pick just the least bad option (often 500 index, even at an almost criminal 0.64) and invest elsewhere for other asset classes.

If OP meets the COVID requirements he may be able to move this stuff elsewhere under the CARES Act.
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ruralavalon
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Re: Advisor moved me from all S&P to these...thoughts?

Post by ruralavalon »

EricLThomp wrote: Tue Jul 28, 2020 8:00 pm
Sandtrap wrote: Tue Jul 28, 2020 7:57 pm 1. Tread carefully
2. Edward Jones?
3. Read the wiki and “getting started” before committing and shifting funds.
4. Why do you need a financial advisor?
5. Search the forum archives for “financial advisor” and read and keep reading the threads. And then read more.
6. You have nothing to lose and everything to gain by posting for a “Portfolio Review” in the forum format.
If anything, going through the process will leave you better armed/prepared for the financial advisor sales Processes and products and strategies and commissions and kickbacks and front and back end fees and overpriced funds and complex portfolio structures.

J🌺
It’s RBC Wealth Management. It’s free through work, so not worried about fees. It’s free, so why not?
It is not free. Most of the funds suggested by the advisor have somewhat high expense ratios, and most are actively managed rather than index funds.

American Funds Fundamental Invs R6 (RFNGX) ER 0.26%
Fidelity® Growth Company K (FGCKX) ER 0.750%
Fidelity® Extended Market Index (FSMAX) ER 0.046
Fidelity® Diversified International K (FDIKX) ER 0.630%
PIMCO Total Return Instl (PTTRX) ER 0.460%
Fidelity® Government Income (FGOVX) ER 0.450%
Fidelity® Inflation-Prot Bd Index (FIPDX) ER 0.050%

What is the fund name, ticker symbol and expense ratio of the S&P 500 index fund which you were using? What are the fund names, tickers and expense ratios of the other funds offered in your employer's 401k plan?

Low expense ratios are critical to long-term investing performance. It's also important to have good diversifcation.

Do you have any other accounts?
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
123
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Re: Advisor moved me from all S&P to these...thoughts?

Post by 123 »

EricLThomp wrote: Tue Jul 28, 2020 7:50 pm ...The advisor is on retainer through my work, so her services are all FREE to me...
I would stay away from "free" offers, unless you know you can afford them. Kind of like "I'm from the government and I'm here to help you".
The closest helping hand is at the end of your own arm.
mcraepat9
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Re: Advisor moved me from all S&P to these...thoughts?

Post by mcraepat9 »

EricLThomp wrote: Tue Jul 28, 2020 8:00 pm It’s RBC Wealth Management. It’s free through work, so not worried about fees. It’s free, so why not?
What about the underlying fund expense ratios and, gasp, loads?
No such thing as a free lunch.
Amateur investors are not cool-headed logicians.
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mrspock
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Re: Advisor moved me from all S&P to these...thoughts?

Post by mrspock »

Tdubs wrote: Tue Jul 28, 2020 8:24 pm Are these ERs correct for you? If so, why do you want them?

RFNGX: 0.28
FGCKX: 0.75
FSMAX: 0.046
FDIKX: 0.63
PTTRX: 0.71
FGOVX: 0.45
FIPDX: 0.05
+1 , I’d bail. Why get off the train which for you this far?
Normchad
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Re: Advisor moved me from all S&P to these...thoughts?

Post by Normchad »

Run far far away.....

There are no "free advisors", there are only salesmen. They have to get paid somehow, and ultimately they get that money from you.

I hate to be a negative Nancy, but I've seen these types before, and they are really bad. They do not know what they are doing, and they genuinely believe they are being helpful. I don't think anybody on this forums would ever hold a portfolio such as they are suggesting..... Its terrible I so many ways....

Read up on the wiki. There is so much great information in there. This can and should be simple once you read up in there.
tibbitts
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Re: Advisor moved me from all S&P to these...thoughts?

Post by tibbitts »

EricLThomp wrote: Tue Jul 28, 2020 7:50 pm So just got a financial advisor. My wife and I are retiring 10 years from now. Will be 55 and 51. We only have about $180K in retirement accounts (but maxing everything now for the next 10 years). The advisor wanted us to move both our 401K accounts from S&P 500 to this. Want to make sure I’m not going to get wiped in fees from the 401k providers because of these funds. The advisor is on retainer through my work, so her services are all FREE to me. Just wanted to see thoughts from the pros here. Thanks.

Mine:
20% RFNGX
15% FGCKX
15% FSMAX
15% FDIKX
10% PTTRX
10% FGOVX
105 FIPDX

Hers:
CURRENT/FUTURE FUND
0%/20% Nationwide Large Cap Growth
0%/25% Nationwide S&P 500 Index
20%/12% MFS International Intrinsic Value
20%/13% Nationwide AllianzGI International Growth
15%/08% Nationwide Small Co Growth
15%/07% Neuberger Berman Equity Trust – Genesis
15%/05% Wells Fargo Discovery Fund
15%/10% Nationwide Mid Cap Index
I'm not one of the "pros" here but I'm certainly not going to waste time looking up these funds or trying to decipher what expenses for these funds actually apply to you. 401k plans can have funds with different fees and expenses than funds by the same name that are available to the retail investor.
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Re: Advisor moved me from all S&P to these...thoughts?

Post by fresh_boglehead »

DON'T DO IT.

Then read The Simple Path To Wealth.
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EricLThomp
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Re: Advisor moved me from all S&P to these...thoughts?

Post by EricLThomp »

OP here. By “free” I mean I am not paying the advisor. I know every 401k plan etc collects fees from the participant, but how would this advisor be getting any fees from me, if they have no access to my accounts and there is no actual funds under management by the advisor?
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Re: Advisor moved me from all S&P to these...thoughts?

Post by Jack FFR1846 »

Did this advisor have a round red nose and size 32 shoes? Because his choices certainly indicate he's a clown.
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EricLThomp
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Re: Advisor moved me from all S&P to these...thoughts?

Post by EricLThomp »

OP here. So the consensus is basically we’re better off leaving the accounts in the lower ER S&P500 funds and not really worry about diversification?
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Re: Advisor moved me from all S&P to these...thoughts?

Post by bog007 »

Those expense ratios will cost u big money 20 years down the road in your portfolio.
Last edited by bog007 on Tue Jul 28, 2020 9:50 pm, edited 1 time in total.
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02nz
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Re: Advisor moved me from all S&P to these...thoughts?

Post by 02nz »

EricLThomp wrote: Tue Jul 28, 2020 8:00 pm It’s RBC Wealth Management. It’s free through work, so not worried about fees. It’s free, so why not?
EricLThomp wrote: Tue Jul 28, 2020 7:50 pm The advisor is on retainer through my work, so her services are all FREE to me.
To be blunt, you fell for the oldest trick in the marketing manual. Do you do your job for free? No? Well, somebody is paying for this "advisor's" salary, health plan, office, computer, etc. It's almost certainly not your employer. It's you.
EricLThomp wrote: Tue Jul 28, 2020 9:38 pm I know every 401k plan etc collects fees from the participant, but how would this advisor be getting any fees from me, if they have no access to my accounts and there is no actual funds under management by the advisor?
401k plans have administrative fees that are paid by the employer or the employee, it varies. If it's the latter, you have no choice. But by going with the active funds recommended by the advisor, you are also paying higher expense ratios, and a portion of those quite likely get kicked back to the advisor (or her firm) in various ways.

Go with a low-cost, index-based portfolio. Lowering costs is one of the very few FREE lunches you'll find in investing. :happy
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Re: Advisor moved me from all S&P to these...thoughts?

Post by anon_investor »

EricLThomp wrote: Tue Jul 28, 2020 9:48 pm OP here. So the consensus is basically we’re better off leaving the accounts in the lower ER S&P500 funds and not really worry about diversification?
Those recommended funds are horrible. The S&P500 is pretty diverse already.
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Re: Advisor moved me from all S&P to these...thoughts?

Post by 02nz »

EricLThomp wrote: Tue Jul 28, 2020 9:48 pm OP here. So the consensus is basically we’re better off leaving the accounts in the lower ER S&P500 funds and not really worry about diversification?
The S&P500 is very well diversified. It covers the companies that make up about 85% of the U.S. stock market, by market capitalization.

You seem to be under the misconception that the more funds you have, the more diversified. This is not true. Many times, people have a bunch of funds but they overlap. I haven't looked at the breakdown of the advisors' recommended funds but have no need to. They are not more diversified than the S&P 500 index fund and quite possibly less diversified, at a much greater cost that will eat into your returns.
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Re: Advisor moved me from all S&P to these...thoughts?

Post by Sandtrap »

EricLThomp wrote: Tue Jul 28, 2020 9:48 pm OP here. So the consensus is basically we’re better off leaving the accounts in the lower ER S&P500 funds and not really worry about diversification?
The consensus is:

1. Leave things in the SP 500 for now.
2. Disregard the FA for now.
3. Pause and read the links given so you'll have a more comprehensive picture of what's involved. It's a process.
4. Diversification is a must. 100% in the SP500 may or may not be for you as it suggests 100% equities? And, a 100/0 allocation?
5. Post that "portfolio review" and the wizards here will do some serious number crunching for you that you will be hard pressed to find elsewhere. There is a deep knowledge and experience base here.
6. The result is you will have a long term investment finance strategy to fit what you have going on now and what goals you have in mind for retirement. It's a road many here have long travelled.

Hope this helps.
j :happy
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epargnant
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Re: Advisor moved me from all S&P to these...thoughts?

Post by epargnant »

Perhaps she makes no extra money based on your fund choices and is purely paid by your work as a benefit to employees. The fact remains that her advice appears worthless, redundant, & full of high expense ratios.

For diversification, as others have said, an index fund like the S&P500 is very diverse. I think the main diversification question would be do you want to add bonds. The Boglehead Wiki does a great job explaining these things.

When I first started here I really enjoyed these simple videos:

https://www.bogleheads.org/wiki/Video:B ... philosophy
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Raymond
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Re: Advisor moved me from all S&P to these...thoughts?

Post by Raymond »

EricLThomp wrote: Tue Jul 28, 2020 9:38 pm OP here. By “free” I mean I am not paying the advisor. I know every 401k plan etc collects fees from the participant, but how would this advisor be getting any fees from me, if they have no access to my accounts and there is no actual funds under management by the advisor?
The most common way is for the mutual fund to take a portion of the front load (for example, the 5.75% load in the Wells Fargo Discovery fund mentioned above) and kick that portion back to the referring "advisor".

Another way is to charge 12b-1 marketing fees, a portion of which is also given to the advisor.

Read the prospectus for each fund to see which fees apply to your situation. Your 401(k) plan might have an agreement with the mutual funds to waive those fees, but I wouldn't necessarily count on that.

Note that none of these require the advisor to have access to your account, or have them under her management - the mutual fund takes care of paying her with your money :greedy
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Re: Advisor moved me from all S&P to these...thoughts?

Post by venkman »

EricLThomp wrote: Tue Jul 28, 2020 9:38 pm OP here. By “free” I mean I am not paying the advisor. I know every 401k plan etc collects fees from the participant, but how would this advisor be getting any fees from me, if they have no access to my accounts and there is no actual funds under management by the advisor?

From the prospectus for FGCKX

The fund, the Adviser, Fidelity Distributors Company LLC (FDC), and/or their affiliates may pay intermediaries, which may include banks, broker-dealers, retirement plan sponsors, administrators, or service-providers (who may be affiliated with the Adviser or FDC), for the sale of fund shares and related services. These payments may create a conflict of interest by influencing your intermediary and your investment professional to recommend the fund over another investment. Ask your investment professional or visit your intermediary's web site for more information.
I didn't check for the other actively managed funds, but they almost certainly have the same advisory.
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EricLThomp
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Re: Advisor moved me from all S&P to these...thoughts?

Post by EricLThomp »

Thanks for all the tips everyone. I am getting together everything to be able to fill out the template for a review. I’ll post the link here probably tomorrow.... man that’s a lot of info to get together with the available funds, ERs, etc. I’ll do my best!
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BL
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Re: Advisor moved me from all S&P to these...thoughts?

Post by BL »

The 12b-1 fees mentioned are a part of the Expense Rate (ER) that are kicked back to the advisor/brokerage. AFAIK, Vanguard funds and most ETFs do not have any 12b-1 kickbacks and have very low ERs. It is important to look up the ERs of the funds to know how much you lose every year to them.
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Re: Advisor moved me from all S&P to these...thoughts?

Post by 02nz »

EricLThomp wrote: Wed Jul 29, 2020 12:23 am Thanks for all the tips everyone. I am getting together everything to be able to fill out the template for a review. I’ll post the link here probably tomorrow.... man that’s a lot of info to get together with the available funds, ERs, etc. I’ll do my best!
Gathering the info is often itself a very valuable part of the learning process! :happy
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Re: Advisor moved me from all S&P to these...thoughts?

Post by Sandtrap »

EricLThomp wrote: Wed Jul 29, 2020 12:23 am Thanks for all the tips everyone. I am getting together everything to be able to fill out the template for a review. I’ll post the link here probably tomorrow.... man that’s a lot of info to get together with the available funds, ERs, etc. I’ll do my best!
As this thread is a bit full in one direction, consider posting a “request portfolio review” separate new thread in that format not a link to an external data sheet so it will be targeted properly and you will have good results.
Otherwise your new data will be buried in this thread and not headed properly.

Do not post a link.
Your request for a portfolio review should hit the main page for best results and greater views.

Great going thus far!
j🌺
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Valuethinker
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Re: Advisor moved me from all S&P to these...thoughts?

Post by Valuethinker »

EricLThomp wrote: Tue Jul 28, 2020 9:48 pm OP here. So the consensus is basically we’re better off leaving the accounts in the lower ER S&P500 funds and not really worry about diversification?
Yes.

I could make a good case for 20% in the diversified international fund. But that's more a nice to have than a must have.

You must stay the course, though. You have a need to accumulate assets fairly quickly (10 years). Markets can go down as well as up - I think at the worst in March-early April the S&P 500 was down about 35%? You cannot rely on a quick snap back - certainly those of us who first invested in the 1970s remember that it was well into the 1980s before we made our money back (adjusted for inflation, as inflation was 7-10% through much of that time it felt differently - you remember your stock portfolio going down, not your stock portfolio doing nothing while prices rise so what it would buy in actual goods and services falls).

So rather than complicate the picture with bonds & with international equities, I suggest you stick with the S&P 500 and concentrate on saving money. Accepting that some years there is going to be a pit in your stomach, where you started with say $200k, put $30k, and wound up with $140k at the end of the year. That, unfortunately, is the risky nature of investing in stock markets.
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Re: Advisor moved me from all S&P to these...thoughts?

Post by Angst »

EricLThomp wrote: Tue Jul 28, 2020 8:00 pm
Sandtrap wrote: Tue Jul 28, 2020 7:57 pm 1. Tread carefully
2. Edward Jones?
3. Read the wiki and “getting started” before committing and shifting funds.
4. Why do you need a financial advisor?
5. Search the forum archives for “financial advisor” and read and keep reading the threads. And then read more.
6. You have nothing to lose and everything to gain by posting for a “Portfolio Review” in the forum format.
If anything, going through the process will leave you better armed/prepared for the financial advisor sales Processes and products and strategies and commissions and kickbacks and front and back end fees and overpriced funds and complex portfolio structures.

J🌺
It’s RBC Wealth Management. It’s free through work, so not worried about fees. It’s free, so why not?
Well, if you've gotten this "free" financial advice out of curiosity and have presented its results to us for our communal amusement, then that's great! But from all appearances, you seem to be taking this "free" advice seriously, and there's nothing amusing about that. It's bad advice, case closed, walk away. You're much better off doing nothing.

I see that as of now, you've posted at our forum 42 times. I'm not going to go back and sleuth, but maybe you should ask yourself this: "What have I learned in those past 42 posts?"

Re-read Sandtrap's list above, perhaps focusing on #3 and #6. You might be someone who needs a fee only advisor to achieve what many people are actually able to achieve on their on by methodically focusing on #3 and #6 above.
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Re: Advisor moved me from all S&P to these...thoughts?

Post by ruralavalon »

EricLThomp wrote: Tue Jul 28, 2020 9:48 pm OP here. So the consensus is basically we’re better off leaving the accounts in the lower ER S&P500 funds and not really worry about diversification?
What are fund names, tickers and expense ratios of all of the funds offered in your employer's 401k plan?

It's not possible to answer without knowing what the available fund choices might be.

In fund selection strive for a good combination of both broad diversification (to reduce your risk) and low expense (to increase your net returns). A S&P 500 index fund by itself for offers good diversification of U.S. stocks. A good, well diversified, low expense bond fund is worth it for further diversification. Perhaps also a good low expense international stock fund.

Please see this for information needed and format: "Asking Portfolio Questions" .
Last edited by ruralavalon on Wed Jul 29, 2020 9:07 am, edited 1 time in total.
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Re: Advisor moved me from all S&P to these...thoughts?

Post by grabiner »

Valuethinker wrote: Wed Jul 29, 2020 8:33 am
EricLThomp wrote: Tue Jul 28, 2020 9:48 pm OP here. So the consensus is basically we’re better off leaving the accounts in the lower ER S&P500 funds and not really worry about diversification?
Yes.

I could make a good case for 20% in the diversified international fund. But that's more a nice to have than a must have.
You can also open IRAs, and hold funds there if your 401(k) doesn't have a good option. Fidelity, Schwab, and Vanguard all offer US stock, international stock, and bond funds at very low cost.

Within each 401(k), try to choose the lowest-cost options. If a 401(k) has an S&P 500 index at 0.60% expenses, and everything else is over 1%, then use the S&P 500 index for that whole 401(k). If it offers US stock and bond funds at comparable expenses, you can hold both, and hold international stock in the IRAs.
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Re: Advisor moved me from all S&P to these...thoughts?

Post by ddurrett896 »

EricLThomp wrote: Tue Jul 28, 2020 7:50 pm Just wanted to see thoughts from the pros here. Thanks.
Do the accounts offer a target date fund? If so, post them and the expense ratio.
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Re: Advisor moved me from all S&P to these...thoughts?

Post by ruralavalon »

In addition to the S&P 500 index fund for U.S. stocks, use a good, diversified, low expense bond fund as further diversification.

For a bond fund either PIMCO Total Return Instl (PTTRX) ER 0.460% or Fidelity® Government Income (FGOVX) ER 0.450% might be good. But its still important to know all the other funds offered in your employer's 401k plan, to see what might be best.
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Re: Advisor moved me from all S&P to these...thoughts?

Post by hnd »

just so you know, only 1 of the funds in your list has beat its own index (whats its measured against) over the past 10 years.

if you backtest the Mine portfolio against a 65/35 VFINX/VBTLX you'd of lost 700 bucks for every 10000 invested the past 7 years. (PTTRX/FGOVX/FIPDX are 100% bond)
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Re: Advisor moved me from all S&P to these...thoughts?

Post by helloeveryone »

EricLThomp wrote: Tue Jul 28, 2020 9:48 pm OP here. So the consensus is basically we’re better off leaving the accounts in the lower ER S&P500 funds and not really worry about diversification?
If you have any index funds in your 401K that is as diversified as it gets and should have some of the lowest expense ratios.

Diversification doesnt refer to having a bunch of different holdings.

If possible - maximize diversification and minimize cost (aka no loads, lowest expense ratio possible) by investing in a total bond index fund and a total stock (or s&p500) index fund.

Before you initiate any changes educate yourself as much as you can on this forum. Taking 1-2 months to study what you need to do will not negatively impact your retirement given your time frame. Making a quick but poor decision will set you back a lifetime.
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Portfolio Review Please (guidance greatly appreciated)

Post by EricLThomp »

[Update starts here --admin LadyGeek]

Emergency funds:
$26,000 with CapOne 360 (currently earning .8% ugh)
monthly expenses roughly $3,000

Income:
his W2 - $60k
her W2 - $36k
both 1099 side hustle income reported in 2019 - $23k
Net income for 2019 (after 401k contributions, etc.) - $72k (was on unemployment for 6 weeks)

Debt:
mortgage 2.5%, $74,000 (Just now completing refi from a 5.88%, but already half way through a 30 year loan).....auto 2.9% $15,000

Tax Filing Status:
MFJ

Tax Rate:
I believe 12% Federal (does that seem correct?), 0% State

State of Residence:
Texas

Age:
him 45, her 41

Desired Asset allocation:
Not sure.  One reason I’m here.  I don't mind being aggressive.  The money will stay in the market, earning even after I retire in 10 years.

Desired International allocation:
Not sure.  One reason I’m here.

Please provide a hint as to the size of your current total portfolio:
$167,043.19

Current retirement assets

His 401k at Fidelity
24.33% FID 500 INDEX (FXIAX) (0.015%)

Her 401k with TCDRS/pension
15.37% Contributing $205/mo. bi-weekly.  Employer matches 250%, earns 7% interest and is NOT changeable.

Her 457 at Nationwide
27.27% Nationwide S&P 500 Index Fund (GRISX) (0.45%)

His Roth IRA at M1
5.42% Vanguard Total Stock  Market Index Fund (VTI) (0.03%)
1.28% SPDR Portfolio Long Term Treasury ETF (SPTL) (0.06)
.85% Vanguard Total International Stock Index Fund (VXUS) (0.08)
.44% Vanguard REIT Index Fund (VNQ) (0.12)
.43% Vanguard High Dividend Yield Index ETF (VYM) (0.06)

His Traditional IRA at M1
1.16% SPDR S&P 500 ETF Trust (SPY) (0.09)
.17% Vanguard REIT Index Fund (VNQ) (0.12)
.18% Vanguard Small-Cap ETF (VB) (0.05)
.17% Vanguard Small Cap Value Index Fund (VBR) (0.07)
.18% Schwab US Large-Cap Value ETF (SCHV) (0.04)

His HSA with OptumBank
(can't invest until $2k reached.  Just opened in February, maxing out)
1.12% contributed, but not yet invested. Will update soon when investment options become available.

Her Roth IRA at M1
5.42% Vanguard Total Stock  Market Index Fund (VTI) (0.03%)
1.28% SPDR Portfolio Long Term Treasury ETF (SPTL) (0.06)
.85% Vanguard Total International Stock Index Fund (VXUS) (0.08)
.43% Vanguard REIT Index Fund (VNQ) (0.12)
.42% Vanguard High Dividend Yield Index ETF (VYM) (0.06)

Her Traditional IRA at M1
1.17% SPDR S&P 500 ETF Trust (SPY) (0.09).17% Vanguard REIT Index Fund (VNQ) (0.12)
.18% Vanguard Small-Cap ETF (VB) (0.05)
.16% Vanguard Small Cap Value Index Fund (VBR) (0.07)
.17% Schwab US Large-Cap Value ETF (SCHV) (0.04)

Her HSA with Lively/invested at TD Ameritrade
3.63% Vanguard Total Stock Market ETF (VTI) (0.03)

Taxable at M1 Finance
xx% cash (for investing – do not include emergency funds)  Cash Flowing about $1,000 into the market monthly.
Additional $10,000 possibly to dump in at the right buying opportunity, since EF is a bit over-funded.
1.17% Vanguard Total Stock  Market Index Fund (VTI) (0.03)
5.30% Various stocks at M1 Finance (MSFT, TSLA, GOOG, and probably 50 others.  "Vegas money" so to speak).
.64% iShares Core S&P 500 ETF (IVV) (0.04)
.64% ProShares S&P 500 Dividend Aristocrats ETF (NOBL) (0.35)

Contributions

New annual Contributions 
$19,500 (plus yearly IRS limit increases) his 401k (3% match)
$2,460 her 401k (250% match) - can't add more, because it's set by employer.   
$19,500 (plus yearly IRS limit increases) her 457 (0% match) 
$6,000 (or IRA match as increased yearly) his IRA/Roth IRA
$6,000 (or IRA match as increased yearly) her IRA/Roth IRA
$3,550 (plus yearly IRS limit increases) his HSA
$3,550 (plus yearly IRS limit increases) his HSA  
$12,000 taxable (for retirement, not short term goals)ALL annual catch-up contributions when we hit 50, etc.

Available funds 

Funds available in his 401(k)
AF FUNDMNTL INV R6 (RFNGX)  (.28)
BARON GROWTH INST (BGRIX)  (1.04)
DLWR EMRG MKTS INST (DEMIX)  (1.37)
FID 500 INDEX (FXAIX)  (.015) ***************************current 100% investment
FID CONTRAFUND K (FCNKX)  (.77)
FID DIVERSIFD INTL K (FDIKX)  (.63)
FID EXTD MKT IDX (FSMAX)  (.036)
FID GROWTH CO K (FGCKX)  (.75)
FID MID CAP STOCK K (FKMCX)  (.82)
HTFD INTL OPPS Y (HAOYX)  (.77)
I O INTL DVSFD Y (OIDYX) (.99)
J H TRITON T (JATTX)  (.91)
JPM SM CAP CORE R5 (VSSCX)  (.80)
TRP VALUE (TRVLX)  (.78)
WF SPL SM CAP VAL R6 (ESPRX)  (.87)
FID FREEDOM 2005 K (FSNJX)  (.42)
FID FREEDOM 2010 K (FSNKX)  (.45)
FID FREEDOM 2015 K (FSNLX)  (.49)
FID FREEDOM 2020 K (FSNOX)  (.52)
FID FREEDOM 2025 K (FSNPX)  (.56)
FID FREEDOM 2030 K (FSNQX)  (.59)
FID FREEDOM 2035 K (FSNUX)  (.63)
FID FREEDOM 2040 K (FSNVX)  (.65)
FID FREEDOM 2045 K (FSNZX)  (.65)
FID FREEDOM 2050 K (FNSBX)  (.65)
FID FREEDOM 2055 K (FNSDX)  (.65)
FID FREEDOM 2060 K (FNSFX)  (.65)
FID FREEDOM 2065 K (FFSDX)  (.65)
FID FREEDOM INC K (FNSHX)   (.42)
FID PURITAN K (FPUKX)       (.45)
FID INFL PR BD IDX (FIPDX)  (.05)
FIDELITY GOVT INCOME (FGOVX)  (.45)
LD ABT SH DTN INC R5 (LDLTX)  (.40)
PIM TOTAL RT INST (PTTRX)  (.71)
FID GOVT MMKT (SPAXX)  (.42)

Funds available in her 457
Nationwide Destination 2025 Fund - Institutional Service Class (NWSHX) (.66)
Nationwide Destination 2030 Fund - Institutional Service Class (NWISX) (.67)
Nationwide Destination 2035 Fund - Institutional Service Class (NWLSX) (.66)
Nationwide Destination 2040 Fund - Institutional Service Class (NWMSX) (.66)
Nationwide Destination 2045 Fund - Institutional Service Class (NWNSX) (.66)
Nationwide Destination 2050 Fund - Institutional Service Class (NWOSX) (.65)
Nationwide Destination 2055 Fund - Institutional Service Class (NTDSX) (.65)
Nationwide Destination 2060 Fund - Institutional Service Class (NWWVX) (.65)
Nationwide Destination Retirement Fund - Institutional Service Class (NWESX) (.66)
Nationwide Investor Destinations Aggressive Fund: Service Class (NDASX) (.93)
Nationwide Investor Destinations Conservative Fund: Service Class (NDCSX) (.90)
Nationwide Investor Destinations Moderate Fund: Service Class (NSDMX) (.91)
Nationwide Investor Destinations Moderately Aggressive Fund: Service Class (NDMSX) (.93)
Nationwide Investor Destinations Moderately Conservative Fund: Service Class (NSDCX) (.91)
Cohen & Steers Real Estate Securities Fund, Inc. - Class A (CSEIX) (1.12)
Invesco Oppenheimer Global Fund - Class A (OPPAX) (1.06)
MFS International Intrinsic Value Fund - Class R3 (MINGX) (.98)
Nationwide AllianzGI International Growth Fund - Institutional Service Class (NWAKX) (.97)
Nationwide International Index Fund (GIIAX) (.75)New World Fund(SM) - Class R4 (RNWEX) (.95)
Nationwide Small Cap Index Fund (GMRAX) (.70)
Nationwide Small Company Growth Fund Institutional Service Class (NWSIX) (1.19)
Nationwide US Small Cap Value Fund - Institutional Service Class (NWUSX) (1.26)
Nationwide Variable Insurance Trust: Nationwide Multi-Manager NVIT Small Company Fund (NVIT) (1.09)
Neuberger Berman Equity Trust(R) - Genesis Fund (NBGEX) (1.10)
JPMorgan Mid Cap Value Fund (JAMCX) (1.24)
Nationwide Mid Cap Market Index Fund (GMXAX) (.68)
Wells Fargo Discovery Fund - Administrative Class (WFDDX) (1.13)
American Century Value Fund (TWVLX) (.98)
Edgar Lomax Value Fund (LOMAX) (.71)
Invesco Growth and Income Fund - Class A (ACGIX) (.82)
Nationwide Fund - Institutional Service Class (MUIFX) (.68)
Nationwide Large Cap Growth Portfolio (Can't find ticker) (.95)
Nationwide Loomis All Cap Growth Fund – Eagle Class Shares (NWADX) (.95)
Nationwide S & P 500 Index Fund (GRISX) (.45) ***************************current 100% investment
Neuberger Berman Sustainable Equity Fund - Investor Class (NBSRX) (.86)
T.Rowe Price Growth Stock Fund (TRSAX) (.92)
Invesco Quality Income Fund - Class Y (VUSIX) (.51)
Lord Abbett High Yield Fund - Class R5 (LHYTX) (.71)
Nationwide Bond Index Fund (GBIAX) (.66)
Nationwide Loomis Core Bond Fund - Institutional Service Class (NWJJX) (.75)
PIMCO International Bond Fund (U.S. Dollar-Hedged) - Class A (PFOAX) (.95)
Morley Stable Value Retirement Fund - NACO/DCVA (N/A)
Nationwide Fixed Account 2Za (current quarter - 3.16 yield)
Nationwide Government Money Market Fund - Investor Shares (MIFXX) (.57)

Questions etc:
1.  Would like to grow as much as possible so retirement can happen in Dec 2030 (this is her retirement eligibility for pension and we want to get an Airstream and travel full time). Going to try and do it on $36k/yr. basically spending that now, even with mortgage.
2.  Should he allocate a certain percentage of 401k to Roth, or keep it traditional (for tax planning)?
3.  Should we both contribute anything more to Traditional IRA, or just Roth from here on out? As far as tax strategy, what percentage should be in the IRAs (traditional IRA vs Roth IRA)
4.  Draw-down strategy?  When to pull how much from each account when retirement hits.  
5.  Can we figure out what the balances could project to be at time of retirement (2030)? 
6. How should I diversify more? Definitely need my contributions earning as much as poss, with my 10 yr time horizon.
7.  Any other suggestions, tips, guidance and education? - VERY greatly appreciated. 

Eric
Last edited by EricLThomp on Wed Jul 29, 2020 11:49 am, edited 10 times in total.
Topic Author
EricLThomp
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Joined: Tue Sep 18, 2018 10:10 pm

Re: Advisor moved me from all S&P to these...thoughts?

Post by EricLThomp »

Thanks so much all for your comments and guidance. I took the advice and posted a request for portfolio review here: viewtopic.php?f=1&t=321453
HomeStretch
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Re: Portfolio Review Please (guidance greatly appreciated)

Post by HomeStretch »

Great job posting your info in the requested format per your other thread. Please update to add your marginal Federal income tax rate as it is more helpful than your effective rate.
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djpeteski
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Re: Advisor moved me from all S&P to these...thoughts?

Post by djpeteski »

What is the advisers net worth?
02nz
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Re: Portfolio Review Please (guidance greatly appreciated)

Post by 02nz »

HomeStretch wrote: Wed Jul 29, 2020 11:20 am Great job posting your info in the requested format per your other thread. Please update to add your marginal Federal income tax rate as it is more helpful than your effective rate.
Post your income as well. We see people calculate the marginal tax rate wrong A LOT, e.g., they get confused by MFJ vs single brackets or fail to account for the standard deduction. Can make a significant difference in the advice, especially for traditional vs Roth 401k contributions.
Zrwizard
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Joined: Wed Jul 29, 2020 11:37 am

Re: Advisor moved me from all S&P to these...thoughts?

Post by Zrwizard »

Get another advisor. I’ve accumulated a lot of wealth from the S &P and growth stocks for decades. You don’t need all of those funds they will just prevent wealth building. He’s getting a lot of money for those accounts. . :oops:
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LadyGeek
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Re: Advisor moved me from all S&P to these...thoughts?

Post by LadyGeek »

EricLThomp - In order to give appropriate advice, it's best to keep all the information in one spot. I merged your portfolio update back into the original thread and revised the first post to indicate the update. (You can edit those posts at any time.)

If you have any questions, ask them here.
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Siaigi
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Location: Italy

Re: Advisor moved me from all S&P to these...thoughts?

Post by Siaigi »

EricLThomp wrote: Tue Jul 28, 2020 8:00 pmIt’s RBC Wealth Management. It’s free through work, so not worried about fees. It’s free, so why not?
He could be apparently free but maybe he could get commissions on the fund he sell. If this is the case he is not independent because he is interested to sell something, rather than something else.
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ruralavalon
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Re: Portfolio Analysis - Advisor moved me from all S&P to these...thoughts?

Post by ruralavalon »

Asset allocation.
EricLThomp wrote: Wed Jul 29, 2020 11:16 amAge:
him 45, her 41

Desired Asset allocation:
Not sure. One reason I’m here. I don't mind being aggressive. The money will stay in the market, earning even after I retire in 10 years.

Desired International allocation:
Not sure. One reason I’m here.
Will she be eligible for both a pension and Social Security? (This will impact the asset allocation decision, and also the traditional vs Roth choice.)

At ages 44 and 41, retiring in 10 years, I suggest about 30% in bonds or other fixed income investments (like CDs, savings accounts, money market fund). This is expected to substantially reduce portfolio volatility (risk), with only a relatively modest decrease in portfolio return. Graph, "An Efficient Frontier: the power of diversification". Please see:
1) Wiki article Bogleheads® investment philosophy, part 3 "Never bear too much or too little risk";
2) Wiki article, "Asset allocation";
3) Morningstar (8/20/2019), "The Best Diversifiers for Your Equity Portfolio"; and
4) White Coat Investor (9/23/2016), "In Defense of Bonds".

I suggest around 20 - 30% of stocks in international stocks. Vanguard paper (March 2012), "Considerations for investing in non-U.S. equities". Historically, allocating 20% of an equity portfolio to non-U.S. stocks would have captured about 84% of the maximum possible diversification benefit, and allocating 30% of an equity portfolio to non-U.S. stocks would have captured about 99% of the maximum possible diversification benefit (p. 6). (You can find lots of debate here on international allocation, opinions ranging all the way from 00% to 50% of stocks in international stocks. If you want more viewpoints on international stocks please try the Google search box, upper right, this page).

Morningstar (11/14/2019), "Revisiting the Case for International". "The case for diversifying internationally isn’t as strong as it used to be, especially if you’re looking for significant risk reduction or consistently better returns. From a portfolio perspective, we typically recommend a healthy international weighting--roughly 25% of total assets--for investors with longer time horizons."

That works out to about 30% bonds, 15% international stocks, and 55% domestic stocks. Asset allocation is a very personal decision. You must decide on an allocation that is comfortable for you based on your own ability, willingness and need to take risk.



Fund selection and placement.
In selecting funds strive for a combination of both broad diversification (to reduce risk) and low expense ratios (to increase your net return). To simply and easily achieve those two goals I suggest choosing funds to simulate the very well diversified, low expense ratio "three-fund portfolio". Please see:
1) Wiki article "Three-fund portfolio";
2) Forum discussion, "The Three-Fund Portfolio"; and
3) Taylor Larimore post, "Articles recommending the three-fund portfolio".

It is often better to coordinate investments among all accounts, in other words treat all accounts together as a single unified portfolio, rather than view each account separately. Select just one or two of the better funds (most diversified + lower expense ratio) in the work-based account (401k, 403b, 457, SIMPLE IRA, TSP etc.), where the choices offered are limited. Then complete the rest of the asset allocation using the nearly unlimited choices available in a taxable account or any IRAs. It is not necessary to put all elements of the desired asset allocation in each account.

This approach lets you avoid having to use sub-par, sub-optimal or high expense funds often found in work-based plans. Do not try to put all components of the asset allocation in every account.

This approach also allows for better tax-efficiency if you use taxable account too. Wiki article, "Tax-efficient Fund Placement".

For domestic stocks I suggest using a total stock market index fund where available. "In a 401(k) plan with limited choices one might very well opt for an S&P 500 index fund to serve as the domestic stock component of a three-fund portfolio." Wiki article, Three-fund portfolio, "Other considerations".

In my opinion in a plan that lacks a total stock market index fund, a S&P 500 index fund is good enough by itself for a domestic stock allocation. A S&P 500 index fund covers over 80% of the U.S. stock market investing in stocks of selected large-cap and mid-cap U.S. companies. In the 28 years since the creation of the first total stock market index fund the performance of the two types of funds has been almost identical. portfolio visualizer, 1993-2020. So it seems that adding a little in mid/small cap stocks trying to mimic the holdings of a total stock market fund has historically made little difference in performance.

See also:
1) Allan Roth, CBS Moneywatch (02/03/2010), "John C. Bogle on the S&P 500 vs. the Total Stock Market"; and
2) Wall Street Physician (01/17/2019), "Should You Invest in the S&P 500 or the Total Stock Market?".

If you want to add the extended market fund, then an 84/16 mix of the S&P 500 and extended market funds will mimic the content of a total stock market index fund. Wiki article, "Approximating total stock market". In my opinion this is not necessary, it is optional if you prefer to do this.


His 401k account.
In my opinion in his employer's 401k plan (24% of total) the better funds to consider using include:
FID 500 INDEX (FXIAX) (0.015%)
PIMCO Total Return Instl (PTTRX) ER 0.460%
Fidelity® Government Income (FGOVX) ER 0.450%.

I don't see an international stock fund that I would recommend. (You could buy an international stock index fund in an IRA or a taxable account.)


Her 457 account.
In my opinion in her 457 plan (27% of total) the better funds to consider using include:
Nationwide S&P 500 Index Fund (GRISX) (0.45%)
Nationwide Bond Index Fund (GBIAX) (.66)
Morley Stable Value Retirement Fund - NACO/DCVA (N/A)
Nationwide Fixed Account 2Za (current quarter - 3.16 yield).
Is the yield on "Morley Stable Value Retirement Fund" guaranteed or variable from year to year?

I don't see an international stock fund that I would recommend. (You could buy an international stock index fund in an IRA or a taxable account.)

Is her employer a government or government agency (such as a public school or state university)? Or is her employer a charity or non-profit. (It makes a difference in a 457 plan.)



Other accounts at M1 Finance?
Why did you pick M1 Finance for the IRAs and taxable account?

Normally I would suggest investing directly with a low cost fund provider like Vanguard, Fidelity or Schwab.


In a taxable account use very tax-efficient stock index funds. Wiki article "Tax-efficient fund placement". At Vanguard I suggest using Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) ER 0.04% or the ETFversion (VTI), and Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) ER 0.11% or the ETF version (VXUS). Stock index funds are also well suited to any type of account.

Bond funds are not very tax-efficient. Ordinarily a bond fund should be placed in a tax-advantaged account, preferably a tax-deferred account like a traditional 401k or traditional IRA. Wiki article "Tax-efficient fund placement".

To make portfolio management and rebalancing easy it is often better to have at least one large tax-advantaged account which contains all three basic asset types (bonds, international stocks, and domestic stocks). Don’t try to put all components of the asset allocation in every account.
Last edited by ruralavalon on Wed Jul 29, 2020 1:07 pm, edited 2 times in total.
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