Portfolio Sanity Check

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Topic Author
snackattack
Posts: 6
Joined: Wed Oct 21, 2020 1:48 pm

Portfolio Sanity Check

Post by snackattack »

Hi all! Long-time lurker and lover of this forum. I think it's time for a sanity check on my portfolio. It's been "set and forget" for quite a few years now. Not long after I started investing, I learned about the three-fund portfolio method, which I love and would like to aspire to, but a couple of roadblocks have gotten in my way: existing funds in taxable accounts that I did not wish to realize gains on, and limited/changing fund options in our 401ks. I’ve tried to line up my allocations so the exposures would still be similar to the three-fund portfolio, but as you'll see, it's way more complex. Also, I’ve realized I have a relatively healthy appetite for risk since I still have a long horizon until retirement, so I have pretty low interest in bonds. I did not increase them as I got older. In fact, sometimes I wonder whether I’d be happy being in 100% stocks. As it is, it’s a small enough piece of the pie that I’ve been happy up until now to just leave it where it is. Other than that, I hope I followed the instructions properly and very much look forward to your insights or any questions you may have!


Emergency funds: 6 months of expenses split between checking, savings, and I-Bonds.

Debt:
Never carry balance on credit cards
Mortgage @ 3.25% Loan equals ~65% of home value; pay down extra ~$5k on principal per yr
Student loan @ 2.35%, a little over 50% paid off

Tax Filing Status: Married Filing Jointly

Tax Rate: 35% Federal, 0% State. Also subject to additional Medicare tax and net investment income tax.

State of Residence: TX

Age: 39 (ditto for partner)

Desired Asset allocation: ~90% stocks / ~10% bonds
Desired International allocation: ~25% of stocks
Also ~3% REITs

Portfolio size is low-ish six-figures.


Current retirement assets

Taxable
1% cash (for investing – do not include emergency funds)
17% Vanguard Total Stock Market Index Fund Admiral (VTSAX) (0.04%)
0.5% Vanguard 500 Index Fund Admiral Shares (VFIAX) (0.04%)
2% Vanguard Equity Income Admiral (VEIRX)(0.18%)
17% Vanguard Developed Markets Index Fund Admiral (VTMGX) (0.07%)
0.5% Vanguard FTSE All-World ex-US Index Fund Admiral (VFWAX) (0.11%)
2% Vanguard Total Bond Market Index Fund Admiral (VBTLX) (0.05%)

His Current 401k at Bok
2% Vanguard Inflation Protected Securities Fund (VAIPX) (0.10%)
1% Vanguard Equity Income Fund Admiral (VEIRX)(0.18%)
5% Vanguard Small Cap Index Fund ( VSMAX) (0.05%)
Company match of 6k

His Old 401k at Fidelity
1% Fidelity US Bond Index (FXNAX) (0.025%)
4% Fidelity 500 Index (FXAIX) (0.015%)
*We do not roll this because the fees under his current 401k are terrible while this one is almost nothing; and we don’t roll into a tIRA because we utilize backdoor and mega backdoor Roth vehicles so don't want pre-tax dollars sitting in a tIRA.

His Roth IRA at Fidelity
2% Fidelity Real Estate Index Fund (FSRNX) (0.07%)

His Roth IRA at Vanguard
1% Vanguard 500 Index Fund Admiral (VFIAX) (0.04%)
0.5% Vanguard Total Bond Market Index Fund Admiral (VBTLX) (0.05%)

His HSA
1% Vanguard Real Estate Index Fund Admiral (VGSLX) (0.12%)

Her 401k at T Rowe
32% Vanguard Institutional Index (VINIX) (0.03%)
4% Vanguard Mid-Cap Index Inst (VMCIX) (0.04%)
Company Match of 28k
Mega Backdoor Roth available out of this account

Her Roth IRA at Vanguard
3% Vanguard Total Bond Market Index Fund Admiral (VBTLX) 0.05%
2% Vanguard Total International Bond Index Fund Admiral (VTABX) 0.11%

Her Roth IRA at Fidelity
1% Fidelity US Bond Index Fund (FXNAX) 0.02%
0.5% Fidelity Inflation-Protected Bond Index Fund (FIPDX) 0.05%

_______________________________________________________________

Note: Total percentage of all the above accounts together equal 100%.


Contributions

New annual Contributions
$19,500 + 6k match his 401k
$19,500 + 28k match her 401k
$6k his Backdoor Roth IRA
$6k her Backdoor Roth IRA
$9k her Mega Backdoor Roth IRA
$3k his HSA
$50k taxable

Other possibly relevant info
$36k/yr in 529s for several children


Available funds

Funds available in his Bok 401(k)
Alger Capital Appreciation, ACAYX 0.75%
Oakmark, OANMX 0.70%
Schwab 1000 Index, SNXFX 0.05%
Vanguard Mid Cap Index, VIMAX 0.05%
AMG Managers Fairpointe Mid Cap, ABMIX 0.9%
T. Rowe Price New Horizons, PRJIX 0.65%
Virtus Ceredex Small-Cap Value Equity, SCETX 1.2%
Oakmark International, OANIX 0.81%
Vanguard International Value, VTRIX 0.37%
Invesco Oppenheimer Developing Markets, ODVIX 0.83%
Schwab Fundamental Emerging Markets, SFENX 0.39%
First Eagle Global, SGIIX 0.85%
Vanguard Real Estate Index, VGSLX 0.12%
Metropolitan West Total Return Bond, MTWIX 0.46%
Dodge & Cox Income, DODIX 0.42%
Vanguard Short Term Bond Index, VBIRX 0.07%
Vanguard LifeStrategy Growth, VASGX 0.14%
Oakmark Equity and Income, OANBX 0.63%
Vanguard LifeStrategy Conservative Gth, VSCGX 0.12%
Wells Fargo Stable Value J, WFSTZ 0.85%
Vanguard Inflation Protected Securities Fund (VAIPX) (0.10%)
Vanguard Equity Income Fund Admiral (VEIRX)(0.18%)
Vanguard Small Cap Index Fund ( VSMAX) (0.05%)
Personal Choice - ??? (not sure what this is or how it works)

Funds available in his old Fidelity 401(k)
Fidelity US Bond Index (FXNAX) (0.025%)
Fidelity 500 Index (FXAIX) (0.015%)
FID CONTRAFUND K6 (FLCNX) 0.45%
JPM EQUITY INCOME R6 (OIEJX) 0.5%
BLKRK MIDCAP GRTH IS (CMGIX) 0.87%
FID MID CAP IDX (FSMDX) 0.025%
VRTS C MDCP VL EQ R6 (SMVZX) 0.87%
FID SM CAP IDX (FSSNX) 0.026%
FKLN SM CAP VALUE R6 (FRCSX) 0.67%
J H TRITON N (JGMNX) 0.66%
AF EUROPAC GROWTH R6 (RERGX) 0.46%
FID TOTAL INTL IDX (FTIHX) 0.06%
INVS DEVELOP MKT R6 (ODVIX) 0.83%
INVS INTL SMMD CO R6 (OSCIX) 0.94%
FID PURITAN K (FPUKX) 0.45%
TRP RETIRE I 2005 I (TRPFX) 0.37%
TRP RETIRE I 2010 I (TRPAX) 0.37%
TRP RETIRE I 2015 I (TRFGX) 0.4%
TRP RETIRE I 2020 I (TRBRX) 0.42%
TRP RETIRE I 2025 I (TRPHX) 0.46%
TRP RETIRE I 2030 I (TRPCX) 0.49%
TRP RETIRE I 2035 I (TRPJX) 0.5%
TRP RETIRE I 2040 I (TRPDX) 0.51%
TRP RETIRE I 2045 I (TRPKX) 0.51%
TRP RETIRE I 2050 I (TRPMX) 0.52%
TRP RETIRE I 2055 I (TRPNX) 0.52%
Wells Fargo Stable Value Fund C 0.4%
FID US BOND IDX (FXNAX) 0.025%
PGIM TOTAL RTN BD R6 (PTRQX) 0.41%
PIM INTL BD US$H I (PFORX) 0.6%
PIM REAL RETURN INST (PRRIX) 0.53%
PIMCO INCOME INST (PIMIX) 1.09%
FID GOVT MMKT (SPAXX) 0.01%
BROKERAGELINK - ??? (Not sure how this works)

Funds available in her T Rowe 401(k)
Vanguard Institutional Index (VINIX) (0.03%)
Vanguard Mid-Cap Index Inst (VMCIX) (0.04%)
AMERICAN BEACON LRG CP VL R5 (AADEX) 0.63%
FIDELITY ADVISOR INT DIS I (FIADX) 0.80%
FIDELITY CONTRAFUND K (FCNKX) 0.77%
INVESCO DEVELOPING MKTS R6 (ODVIX) 0.83%
NORTHERN SMALL CAP VALUE FUND (NOSGX) 1.00%
T ROWE PRICE QM US SC GR EQ I (TQAIX) 0.65%
TRP GROWTH STOCK FUND (PRGFX) 0.65%
VANGUARD INST INDEX (VINIX) 0.03%
VANGUARD MID CAP VALUE IDX ADM (VMVAX) 0.07%
VANGUARD MID-CAP GROWTH FUND (VMGRX) 0.36%
VANGUARD MID-CAP INDEX INST (VMCIX) 0.04%
PIMCO TOTAL RETURN INSTL (PTTRX) 0.70%
TEMPLETON GLOBAL TOT RET ADV (TTRZX) 0.76%
TRP STABLE VALUE FUND – N (SVF-N) 0.20%
RETIREMENT 2005 FUND (TRRFX) 0.52%
RETIREMENT 2010 FUND (TRRAX) 0.52%
RETIREMENT 2015 FUND (TRRGX) 0.55%
RETIREMENT 2020 FUND (TRRBX) 0.57%
RETIREMENT 2025 FUND (TRRHX) 0.61%
RETIREMENT 2030 FUND (TRRCX) 0.64%
RETIREMENT 2035 FUND (TRRJX) 0.67%
RETIREMENT 2040 FUND (TRRDX) 0.69%
RETIREMENT 2045 FUND (TRRKX) 0.71%
RETIREMENT 2050 FUND (TRRMX) 0.71%
RETIREMENT 2055 FUND (TRRNX) 0.71%
RETIREMENT 2060 FUND (TRRLX) 0.71%
T ROWE PRICE RETIRE BAL INV (TRRIX) 0.50%


Questions:

1. I ended up with VTMGX in taxable due to tax-loss harvesting VFWAX and VTIAX. Do I need to add VEMAX to make this equivalent to VFWAX, which was my preferred fund?

2. Is there a way to simplify this without (1) incurring any gains/taxes, (2) increasing expense ratios, (3) putting funds in accounts not suited for their tax (in)efficiency?

3. Any big holes/mistakes/opportunities missed?
User avatar
Duckie
Posts: 7674
Joined: Thu Mar 08, 2007 2:55 pm

Re: Portfolio Sanity Check

Post by Duckie »

snackattack, welcome to the forum.
snackattack wrote:Age: 39 (ditto for partner)

Desired Asset allocation: ~90% stocks / ~10% bonds
10% bonds is low for your ages. I'd be at least 20% if not 25% bonds.
Desired International allocation: ~25% of stocks
That is reasonable.
Taxable
1% cash (for investing – do not include emergency funds)
17% Vanguard Total Stock Market Index Fund Admiral (VTSAX) (0.04%)
0.5% Vanguard 500 Index Fund Admiral Shares (VFIAX) (0.04%)
2% Vanguard Equity Income Admiral (VEIRX)(0.18%)
17% Vanguard Developed Markets Index Fund Admiral (VTMGX) (0.07%)
0.5% Vanguard FTSE All-World ex-US Index Fund Admiral (VFWAX) (0.11%)
2% Vanguard Total Bond Market Index Fund Admiral (VBTLX) (0.05%)
Why do you have those funds with tiny amounts? I would sell 500 Index, Equity Income, FTSE, and Total Bond, maybe over a couple of years to reduce taxes.
His Current 401k at Bok
2% Vanguard Inflation Protected Securities Fund (VAIPX) (0.10%)
1% Vanguard Equity Income Fund Admiral (VEIRX)(0.18%)
5% Vanguard Small Cap Index Fund ( VSMAX) (0.05%)
You could have Schwab 1000 Index for 0.05% vs. Equity Income for 0.18%. But actually I would probably use this for all VAIPX. You need the bond space.
His Old 401k at Fidelity
1% Fidelity US Bond Index (FXNAX) (0.025%)
4% Fidelity 500 Index (FXAIX) (0.015%)
Make this all FXNAX.
His Roth IRA at Fidelity
2% Fidelity Real Estate Index Fund (FSRNX) (0.07%)

His Roth IRA at Vanguard
1% Vanguard 500 Index Fund Admiral (VFIAX) (0.04%)
0.5% Vanguard Total Bond Market Index Fund Admiral (VBTLX) (0.05%)
You would be better off combining these into once account. Pick either Fidelity or Vanguard. And try to get the bonds out of the Roth accounts.
Her 401k at T Rowe
32% Vanguard Institutional Index (VINIX) (0.03%)
4% Vanguard Mid-Cap Index Inst (VMCIX) (0.04%)
I wouldn't bother with Mid-Cap here. What is the Stable Value Fund currently paying?
Her Roth IRA at Vanguard
3% Vanguard Total Bond Market Index Fund Admiral (VBTLX) 0.05%
2% Vanguard Total International Bond Index Fund Admiral (VTABX) 0.11%

Her Roth IRA at Fidelity
1% Fidelity US Bond Index Fund (FXNAX) 0.02%
0.5% Fidelity Inflation-Protected Bond Index Fund (FIPDX) 0.05%
Again, combine into one account. And I wouldn't bother with Total International Bond.
I ended up with VTMGX in taxable due to tax-loss harvesting VFWAX and VTIAX. Do I need to add VEMAX to make this equivalent to VFWAX, which was my preferred fund?
You don't need to. VTMGX is roughly 80% of internationals stocks and is fine on its own.
Is there a way to simplify this without (1) incurring any gains/taxes, (2) increasing expense ratios, (3) putting funds in accounts not suited for their tax (in)efficiency?
Combine the Roth IRAs.
chassis
Posts: 111
Joined: Tue Mar 24, 2020 4:28 pm

Re: Portfolio Sanity Check

Post by chassis »

At your age and net worth I would exit all "bond" and "income" funds and rebalance into SP500 index and large cap growth funds/etfs/stocks, whichever you like to buy.

Max 20 positions or holdings in the portfolio. More than this and you experience redundancy and concentration, and you can't keep track of it all.
User avatar
BolderBoy
Posts: 5074
Joined: Wed Apr 07, 2010 12:16 pm
Location: Colorado

Re: Portfolio Sanity Check

Post by BolderBoy »

Duckie's suggestions are good.

Are you willing to tend to your portfolio yourself? If so, I'd go with a 70/30 AA so that you can do opportunistic rebalancing more easily and at your income level I'm not sure you need to "swing for the fence" too aggressively.

Also in your taxable account you have a fair amount of overlap. And at your marginal tax rate I wonder if a muni bond fund might not be better for you in your taxable account than holding Total Bond. Something like VG's Intermediate Term Tax-Exempt.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect
Topic Author
snackattack
Posts: 6
Joined: Wed Oct 21, 2020 1:48 pm

Re: Portfolio Sanity Check

Post by snackattack »

First - thank you so much for your detailed response! I really appreciate it.
Why do you have those funds with tiny amounts? I would sell 500 Index, Equity Income, FTSE, and Total Bond, maybe over a couple of years to reduce taxes.
Tax loss harvesting (blah). What remains has a really low cost basis and given my high tax rate, it doesn't make sense to me to clean it up.
His Current 401k at Bok
2% Vanguard Inflation Protected Securities Fund (VAIPX) (0.10%)
1% Vanguard Equity Income Fund Admiral (VEIRX)(0.18%)
5% Vanguard Small Cap Index Fund ( VSMAX) (0.05%)
You could have Schwab 1000 Index for 0.05% vs. Equity Income for 0.18%. But actually I would probably use this for all VAIPX. You need the bond space.
I actually think the Schwab is new because I definitely would have picked that over the Equity Income. Good catch! That's a decision I was headed towards as I put this post together. Goes to show that it's always good to dig deep and review!


His Roth IRA at Fidelity
2% Fidelity Real Estate Index Fund (FSRNX) (0.07%)

His Roth IRA at Vanguard
1% Vanguard 500 Index Fund Admiral (VFIAX) (0.04%)
0.5% Vanguard Total Bond Market Index Fund Admiral (VBTLX) (0.05%)
You would be better off combining these into once account. Pick either Fidelity or Vanguard. And try to get the bonds out of the Roth accounts.
You are totally right about this. We tried once, and it was a pain in the butt so we gave up, but probably too easily. I'm going to look into this again - I recall fees for funds not managed by the company rolling into, and also some difficult regarding names on the accounts not exactly matching or something. It was quite a while ago; definitely worth a refresh.
Her 401k at T Rowe
32% Vanguard Institutional Index (VINIX) (0.03%)
4% Vanguard Mid-Cap Index Inst (VMCIX) (0.04%)
I wouldn't bother with Mid-Cap here. What is the Stable Value Fund currently paying?
To make a little sense of why I have this - and perhaps some other funds that may seem random - I have the mid-cap to replicate Vanguard Total Stock (VTSAX) - so that is why I have a mix of 500 Index, Mid-cap, and small cap. The percentages line up to essentially get to the equivalent allocation of VTSAX. I've done similarly when trying to replicate Total Bond when it wasn't available. I look at the overall allocation of my account to keep everything in check and in line with what, in a perfect world, could be a good old 3-fund portfolio.
I think the Stable Value fund is about 2% pay with 0.2% expense ration. Honestly I'm not very familiar with what a stable value fund is even reading the fact sheet.

What do you think the best place to put bond funds is? My research had shown to put them in Roth accounts due to income generation, but I've been questioning that since the dividends of the stocks has been way higher tax impact - and you also commented on it, so that's obviously something I should be looking at.
Topic Author
snackattack
Posts: 6
Joined: Wed Oct 21, 2020 1:48 pm

Re: Portfolio Sanity Check

Post by snackattack »

chassis wrote: Fri Oct 23, 2020 8:28 pm At your age and net worth I would exit all "bond" and "income" funds and rebalance into SP500 index and large cap growth funds/etfs/stocks, whichever you like to buy.

Max 20 positions or holdings in the portfolio. More than this and you experience redundancy and concentration, and you can't keep track of it all.
Thanks for the input! There are such diverse opinions on the bond allocation - this is probably one of the toughest ones for me to change in either direction. Maybe it's because I'm comfortable with the particular level of risk that I have and also get great pleasure out of seeing the growth when it happens. Something to consider for sure.

Also, I may be weird, but I do keep a spreadsheet to group and track these allocations to keep them relatively in balance with my overall allocation plan. Maybe that spreadsheet is even the reason it's become so ugly. Not enough space in tax-advantaged accounts for all I want to do. I think, if I had the option, I'd only have International in taxable.
Topic Author
snackattack
Posts: 6
Joined: Wed Oct 21, 2020 1:48 pm

Re: Portfolio Sanity Check

Post by snackattack »

BolderBoy wrote: Fri Oct 23, 2020 9:29 pm Duckie's suggestions are good.

Are you willing to tend to your portfolio yourself? If so, I'd go with a 70/30 AA so that you can do opportunistic rebalancing more easily and at your income level I'm not sure you need to "swing for the fence" too aggressively.

Also in your taxable account you have a fair amount of overlap. And at your marginal tax rate I wonder if a muni bond fund might not be better for you in your taxable account than holding Total Bond. Something like VG's Intermediate Term Tax-Exempt.
Yes, I'm more than happy to manage my account. I rebalance primarily through my additions rather than shifting money around - both through dividends which I funnel into the money market account so I can invest them where more needed, as well as my annual contributions.

The overlap in the taxable is completely due to tax loss harvesting. I don't love it, but also don't see a real benefit in realizing gains on low-cost basis purchases.

Good point on the VG Intermediate Term Tax-Exempt. I know I've looked into this a bit in the past, and I seem to recall that the tax-exempt status ends up getting factored into the price and that it doesn't necessarily do any better than Total Bond after-tax. But like most of my research, that was a while ago :happy Any further thoughts on this?
ivgrivchuck
Posts: 331
Joined: Sun Sep 27, 2020 6:20 pm

Re: Portfolio Sanity Check

Post by ivgrivchuck »

snackattack wrote: Thu Oct 22, 2020 10:18 pm 3. Any big holes/mistakes/opportunities missed?
Paying back mortgage faster is guaranteed 3.25% return for investment. That's way better than any bonds.

So in your shoes, I would divide your money in two piles:

Pile 1. "Invest" in your mortgage (pay it back quicker)
Pile 2. Invest 100% in stocks/reits other assets which expected return exceeds your mortgage rate.

(This of course excludes your emergency fund)
44% VTI | 36% VXUS | 10% I-bonds | 10% EE-bonds
User avatar
Duckie
Posts: 7674
Joined: Thu Mar 08, 2007 2:55 pm

Re: Portfolio Sanity Check

Post by Duckie »

snackattack wrote:
His Roth IRA at Fidelity
<snip>
His Roth IRA at Vanguard
You would be better off combining these into once account. Pick either Fidelity or Vanguard. And try to get the bonds out of the Roth accounts.
You are totally right about this. We tried once, and it was a pain in the butt so we gave up, but probably too easily. I'm going to look into this again - I recall fees for funds not managed by the company rolling into, and also some difficult regarding names on the accounts not exactly matching or something. It was quite a while ago; definitely worth a refresh.
Don't roll Vanguard funds to Fidelity or Fidelity funds to Vanguard. Liquidate and roll cash. That would solve the fee problem.
What is the Stable Value Fund currently paying?
I think the Stable Value fund is about 2% pay with 0.2% expense ration. Honestly I'm not very familiar with what a stable value fund is even reading the fact sheet.
Think of a stable value fund as a money market fund with a guaranteed rate. Depending on the SVF the guarantee might be monthly, quarterly, or even yearly. 2% is a decent deal right now.
What do you think the best place to put bond funds is?
The best place is to put taxable bonds in pre-tax accounts. The second best is to put tax-exempt bonds in taxable accounts. The least best is to put taxable bonds in Roth accounts. Sometimes you don't have a choice.
Topic Author
snackattack
Posts: 6
Joined: Wed Oct 21, 2020 1:48 pm

Re: Portfolio Sanity Check

Post by snackattack »

ivgrivchuck wrote: Fri Oct 23, 2020 10:28 pm
snackattack wrote: Thu Oct 22, 2020 10:18 pm 3. Any big holes/mistakes/opportunities missed?
Paying back mortgage faster is guaranteed 3.25% return for investment. That's way better than any bonds.

So in your shoes, I would divide your money in two piles:

Pile 1. "Invest" in your mortgage (pay it back quicker)
Pile 2. Invest 100% in stocks/reits other assets which expected return exceeds your mortgage rate.

(This of course excludes your emergency fund)
Thanks! We are piling extra into our mortgage (partly because I just can’t stand the interest payment exceeding the principal, but also for the reason you state).
Topic Author
snackattack
Posts: 6
Joined: Wed Oct 21, 2020 1:48 pm

Re: Portfolio Sanity Check

Post by snackattack »

Duckie wrote: Sat Oct 24, 2020 4:32 pm
snackattack wrote:
His Roth IRA at Fidelity
<snip>
His Roth IRA at Vanguard
You would be better off combining these into once account. Pick either Fidelity or Vanguard. And try to get the bonds out of the Roth accounts.
You are totally right about this. We tried once, and it was a pain in the butt so we gave up, but probably too easily. I'm going to look into this again - I recall fees for funds not managed by the company rolling into, and also some difficult regarding names on the accounts not exactly matching or something. It was quite a while ago; definitely worth a refresh.
Don't roll Vanguard funds to Fidelity or Fidelity funds to Vanguard. Liquidate and roll cash. That would solve the fee problem.
How did this not occur to me?! :oops:

What is the Stable Value Fund currently paying?
I think the Stable Value fund is about 2% pay with 0.2% expense ration. Honestly I'm not very familiar with what a stable value fund is even reading the fact sheet.
Think of a stable value fund as a money market fund with a guaranteed rate. Depending on the SVF the guarantee might be monthly, quarterly, or even yearly. 2% is a decent deal right now.
Especially given your insights on bond location, I might dip my toes into this, since it would be pre-tax. Although I hate the expense ratio. But that is intriguing.
What do you think the best place to put bond funds is?
The best place is to put taxable bonds in pre-tax accounts. The second best is to put tax-exempt bonds in taxable accounts. The least best is to put taxable bonds in Roth accounts. Sometimes you don't have a choice.
The place where I have the least room is my Roths, so I think I’ll get bonds out of there (and probably replace with VTSAX?). My bond options aren’t ideal in my pretax accounts but obviously have lots of flexibility in taxable. Thanks so much for following up! I really appreciate it.
User avatar
Duckie
Posts: 7674
Joined: Thu Mar 08, 2007 2:55 pm

Re: Portfolio Sanity Check

Post by Duckie »

snackattack wrote:
Think of a stable value fund as a money market fund with a guaranteed rate. Depending on the SVF the guarantee might be monthly, quarterly, or even yearly. 2% is a decent deal right now.
Especially given your insights on bond location, I might dip my toes into this, since it would be pre-tax. Although I hate the expense ratio. But that is intriguing.
The 2% rate is after deducting the expense ratio, so you're paid 2%.
The place where I have the least room is my Roths, so I think I’ll get bonds out of there (and probably replace with VTSAX?).
VTSAX is great in a Roth IRA.
My bond options aren’t ideal in my pretax accounts but obviously have lots of flexibility in taxable.
In your employer accounts the least expensive fixed income options are:

His current 401k at BOK:
  • DODIX Dodge & Cox Income 0.42%
    VBIRX Vanguard Short Term Bond Index 0.07%
    VAIPX Vanguard TIPS 0.10%
His old 401k at Fidelity:
  • FXNAX Fidelity US Bond Index 0.025%
Her 401k at T Rowe Price:
  • TRP Stable Value Fund paying 2%
In taxable the best options would be:
  • VWITX Vanguard Intermediate-Term Tax-Exempt 0.17%
    VTEB Vanguard Tax-Exempt ETF 0.06%
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