Portfolio Review - Simplify my life

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Topic Author
sp226
Posts: 71
Joined: Sat May 16, 2015 8:33 am

Portfolio Review - Simplify my life

Post by sp226 »

Looking to simplify the unwieldy portfolio of 34 different funds, and improve asset allocation.

Age - 47/50
Debt: in year 7 of 15 yr mortgage, balance $450K @3%
Tax Filing Status: MFJ , 2 children (20 &18)
Tax rate: 37% Federal 6.95% State
State of Residence: NY
No emergency fund, none desired.

Currently probably on top of my earning power - don't want to work any more than I currently do, and maybe less. Spending 25% of pre-tax income, saving rate 40-50%.

Total portfolio is about 66% taxable/34% pre-tax.
All tax-advantaged opportunities being maxed out - 401k, profit sharing, cash balance plan, HSA, backdoor Roths, etc. Additional 529s for children that will fully fund the remaining 2 years of school for child#1 and 4 years of anticipated school for child#2 - not included in the total. Also Minor Roths of roughly $80k/kid not included in the total. Also precious metal account of about $400K not included in the total. Also business worth around $2M not included in the total.

Current allocation:
Large Cap - 30%
Small Cap - 30%
International - 16%
Cash - 5%
Bonds - 19%.

Desired allocation - essentially same, but much less cash. I held some automatic investments during the uncertain times when it seemed I needed to build up cash reserves. Not really required, and I don't want any more than 2%.

Total portfolio value - $5M.

Top 10 holdings


Vanguard Small Cap Index Fund a... $936,213.70 18.66%
Vanguard Total Stock Market Inde... $528,002.78 10.53%
Dodge & Cox Income Fund $479,269.28 9.55%
FIDELITY 500 INDEX FUND - INSTL ... $435,353.69 8.68%
Vanguard Growth Index Fund Adm... $281,066.42 5.60%
Cash $242,383.20 4.83%
VANGUARD NY LONG-TERM TAX-... $216,264.34 4.31%
DFA Five-Year Global Fixed Income... $160,147.33 3.19%
DFA GLOBAL REAL ESTATE $159,385.48 3.18%
DFA US LG-CAP VALUE PORTFOLI... $159,269.24 3.18%
Other $1,418,627.73 28.28%


The total portfolio is a hodge-podge of different funds that at some point seemed like a good idea. The total list is included at the end as most people will just skip over that. I need to weed out the losers, especially those that make up an insignificant portion of the total, and especially those with neutral or positive tax circumstances (in tax-adv accounts or with LT cap losses).

$5M is what we consider to be the floor for FIRE given our expenses. Business would have to be liquidated at retirement.

Questions:

1) Ideas to simplify the portfolio and bring it 5-10 funds?

2) Given the business has to be sold at retirement, the portfolio would get a large infusion of cash. Does it make sense to keep it aggressively positioned at 80/20, or bring up the fixed portion and deploy the cash when it happens?

3) I am increasingly leaning towards not retiring as soon as I am able (as I am able to do so now and have no desire to retire), and just work less to allow more time for my passion of traveling. We usually visit 8-10 countries per year and would do a lot more if we had the time. With kids grown, school breaks are no longer a constraint. The type of work that I do cannot be done remotely, so taking more time off would curtail the income (and value of the business). That may be worth it though. The income would still be more than enough to provide for our expenses. If that is the case, should my portfolio be positioned even more aggressively?

4) and finally, since there are a lot of questions, and lots of investment decisions to be made, would I benefit from a consultation with a CFP/portfolio manager, even though I have no desire to establish an ongoing AUM relationship?

Thanks so much!

Rest of the portfolio:

Security
TOTAL Investments
Vanguard Small Cap Index Fund admiral 19%
Vanguard Total Stock Market Index Fund Admiral Shares 11%
Dodge & Cox Income Fund 10%
FIDELITY 500 INDEX FUND - INSTL PREMIUM 9%
Vanguard Growth Index Fund Admiral Shares 6%
-Cash- 5%
VANGUARD NY LONG-TERM TAX-EXEMPT ADMIRAL 5%
DFA Five-Year Global Fixed Income Portfolio Institutional Class 3%
DFA GLOBAL REAL ESTATE 3%
DFA US LG-CAP VALUE PORTFOLIO (THE) 3%
T. Rowe Price Equity Index Fund 3%
DFA INTERNATIONAL SMALL CO 3%
T ROWE PRICE GROWTH STOCK FUND 3%
Vanguard Developed Markets Index Fund Admiral Shares 3%
DFA INTERNATIONAL VALUE 2%
Emerging Market Small Co 2%
EMERGING MARKET VALUE 2%
VANGUARD INDEX FDS SMALL CP ETF 1%
DFA USA SMALL VALUE 1%
Vanguard Small Capitalization Index Fund Investor Shares 1%
DFA USA MICRO CAP 1%
Fidelity Emerging Markets Index Fund - I 1%
VANGUARD LTD-TERM TAX-EXEMPT FUND ADMIRA 1%
OAKMARK INTL FUND CL I 1%
LSV VALUE EQUITY FUND 1%
Vanguard 500 Index Fund Admiral Shares 1%
DFA INTERNATIONAL SMALL CAP VALUE 1%
ProShares UltraPro S&P 500 1%
Direxion Daily 20-Yr Treasury Bull 3x Sh 1%
VANGUARD INTERMEDIATE-TERM TAX-EXEMPT FU 0%
VANGUARD SHORT-TERM BOND INDEX 0%
THIRD AVENUE REAL ESTATE VALUE FUND INST 0%
pkcrafter
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Re: Portfolio Review - Simplify my life

Post by pkcrafter »

sp226, please post account types and funds in those accounts - taxable, IRAs, Roths, SEP, SIMPLE, etc.


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.
desiderium
Posts: 960
Joined: Sat Jan 04, 2014 11:08 am

Re: Portfolio Review - Simplify my life

Post by desiderium »

You will feel so much better when you do this
For Tax deferred, just do it
For taxable account, look at cap gains. If high gain and small acct, consider funding DAF to offload gains and do some good with your wealth. Sell anything that is at a loss and offset by selling smaller gainers.
Consider just selling things with high fees.
Low fees and high gains, you may want to continue holding to avoid paying taxes.
Topic Author
sp226
Posts: 71
Joined: Sat May 16, 2015 8:33 am

Re: Portfolio Review - Simplify my life

Post by sp226 »

Boy, this forum doesn't make it easy to post stuff cleanly.
Below is the breakdown by tax-advantaged and taxable.
Security, percent of total tax-adv/ taxable, and gain/loss. Gain/loss can be wildly inaccurate due to inconsistencies in transaction ledgers. Totals are accurate though.

Tax-advantaged are 401k, Rollover IRA, rIRA, Cash Balance, HSA.

Code: Select all

Symbol	 Balance 	% of total	 Gain/Loss 		Security
					
					
DODIX	 479,269 	27%	 30,269 		Dodge & Cox Income Fund
vsmax	 246,210 	14%	 67,412 		Vanguard Small Cap Index Fund admiral
DFGBX	 160,147 	9%	 147 		 DFA Five-Year Global Fixed Income Portfolio Institutional Class
PREIX	 155,637 	9%	 26,846 		T. Rowe Price Equity Index Fund
DFISX	 154,711 	9%	 (3,732)		DFA INTERNATIONAL SMALL CO
DFGEX	 159,385 	9%	 (1,590)		DFA GLOBAL REAL ESTATE
VB	  70,065 	4%	 147 		   VANGUARD INDEX FDS SMALL CP ETF
FXAIX	 47,179 	3%	 6,919 		 FIDELITY 500 INDEX FUND - INSTL PREMIUM
DFSCX	 41,646 	2%	 4,388 		 DFA USA MICRO CAP
DEMSX	 41,258 	2%	 4,359 		 Emerging Market Small Co
DFEVX	 35,569 	2%	 (350)		 EMERGING MARKET VALUE
DFSVX	 36,629 	2%	 (3,011)		DFA USA SMALL VALUE
VFIAX	 28,204 	2%	 4,366 		Vanguard 500 Index Fund Admiral Shares
DISVX	 26,929 	2%	 (1,953)		DFA INTERNATIONAL SMALL CAP VALUE
DFIVX	 24,565 	1%	 (3,517)		DFA INTERNATIONAL VALUE
DFSVX	 22,988 	1%	 (6,306)		DFA USA SMALL VALUE
VBSSX	 21,986 	1%	  (inacc)   		VANGUARD SHORT-TERM BOND INDEX
	 1,752,377 	100%			

					
Taxable are spread out across multiple brokerages.

Code: Select all

vsmax	 661,003 	18%	 (inacc) 		Vanguard Small Cap Index Fund admiral
FXAIX	 388,175 	11%	 (inacc)	FIDELITY 500 INDEX FUND - INSTL PREMIUM
VTSAX	 528,002 	15%	 (inacc) 		Vanguard Total Stock Market Index Fund Admiral Shares
VIGAX	 281,066 	8%	 98,954 		Vanguard Growth Index Fund Admiral Shares
VNYUX	 249,623 	7%	 58,659 		VANGUARD NY LONG-TERM TAX-EXEMPT ADMIRAL
vsmax	 248,746 	7%	 42,999 		Vanguard Small Cap Index Fund admiral
CASH	 210,261 	6%	 -   		-      Cash-
DFLVX	 159,269 	4%	 (5,648)		DFA US LG-CAP VALUE PORTFOLIO (THE)
PRGFX	 153,226 	4%	 76,823 		T ROWE PRICE GROWTH STOCK FUND
VTMGX	 146,801 	4%	 (inacc) 		Vanguard Developed Markets Index Fund Admiral Shares
DFIVX	 92,024 	3%	 (25,958)		DFA INTERNATIONAL VALUE
DEMSX	 61,557 	2%	 (3,821)		Emerging Market Small Co
DFEVX	 55,425 	2%	 (5,437)		EMERGING MARKET VALUE
FPADX	 35,912 	1%	 (inacc) 		Fidelity Emerging Markets Index Fund - I
VMLUX	 33,795 	1%	 264 		VANGUARD LTD-TERM TAX-EXEMPT FUND ADMIRA
OAKIX	 32,560 	1%	 (365)		OAKMARK INTL FUND CL I
LSVEX	 30,349 	1%	 7,319 		LSV VALUE EQUITY FUND
UPRO	 26,150 	1%	 1,534 		ProShares UltraPro S&P 500
TMF	     25,229 	1%	 261 		       Direxion Daily 20-Yr Treasury Bull 3x Sh
VWIUX	   24,397 	1%	 689 		VANGUARD INTERMEDIATE-TERM TAX-EXEMPT FU
TAREX	  13,995 	0%	 (3,537)		THIRD AVENUE REAL ESTATE VALUE FUND INST
DFSVX	   10,101 	0%	 (2,806)		DFA USA SMALL VALUE
DFUSX	   4,072 	0%	 1,458 		DFA US LARGE CO PORTFOLIO
					
	 3,471,740 	100%			


	
lakpr
Posts: 6055
Joined: Fri Mar 18, 2011 9:59 am

Re: Portfolio Review - Simplify my life

Post by lakpr »

I really suggest that you create a free account at MorningStar, and run your portfolio through its X-Ray tool

https://www.morningstar.com/instant-x-ray

That will give you the percentage of allocation to stocks, bonds, etc. You can simplify your holdings based on that.
Topic Author
sp226
Posts: 71
Joined: Sat May 16, 2015 8:33 am

Re: Portfolio Review - Simplify my life

Post by sp226 »

lakpr wrote: Wed Sep 09, 2020 12:31 pm I really suggest that you create a free account at MorningStar, and run your portfolio through its X-Ray tool

https://www.morningstar.com/instant-x-ray

That will give you the percentage of allocation to stocks, bonds, etc. You can simplify your holdings based on that.
Good idea... Quicken used to have this feature in the previous version, but not in the new one. I never really used it which is a shame, it was very easy as a built in module.
pkcrafter
Posts: 14328
Joined: Sun Mar 04, 2007 12:19 pm
Location: CA
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Re: Portfolio Review - Simplify my life

Post by pkcrafter »

sp226 wrote: Tue Sep 08, 2020 9:50 pm Boy, this forum doesn't make it easy to post stuff cleanly.

Ha, what doesn't make it easy is the number of funds you hold. :happy

Yes, you do need to tighten up the portfolio and make it efficient, especially taxable. Allocation at 76% stock is OK because you have lots of ability to take risk, but you don't have much need, so allocation could be less than 76% stock.

1. First thing to do is remember that all retirement accounts are parts of one portfolio, so duplication isn't necessary. 2, You are extremely overweight in small caps and that will give you lots of tracking error and long periods of underperformance. Not desirable in retirement.


I'm not a fan of DFA funds, but if you want them OK, but don't add additional funds in the same asset class.

This is the basic 3-fund portfolio


viewtopic.php?f=10&t=88005

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.
Rudedog
Posts: 265
Joined: Wed Aug 01, 2018 3:15 pm

Re: Portfolio Review - Simplify my life

Post by Rudedog »

lakpr wrote: Wed Sep 09, 2020 12:31 pm I really suggest that you create a free account at MorningStar, and run your portfolio through its X-Ray tool

https://www.morningstar.com/instant-x-ray

That will give you the percentage of allocation to stocks, bonds, etc. You can simplify your holdings based on that.
I agree, I use Morningstar X-ray, it works well for me.
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