I just finished reading the Three Fund Portfolio book and I was inspired to come here and ask for some guidance.
Edit: Adding more Details
Emergency funds: Three months of expense
Debt: 18k left on car
Tax Filing Status: Single
Tax Rate: 35% Federal, 0% State
State of Residence: WA
Age: 34
Desired Asset allocation: Majority stock in taxable account. Less in retirement account.
This is my current investment portfolio.
Taxable - Fideltiy
23% Vanguard 500 Index Fund ETF (VOO) (0.03)
6% First Trust NASDAQ Clean Edge Green Energy Idx Fd ETF (QCLN) (0.60)
71% Microsoft (MSFT)
401k
91% BlackRock LifePath® Index 2050 Fund N (LIPIX) (0.06)
9% Vanguard Institutional S&P 500 Index Trust (VFFSX) (0.011)
Company match 50% up to annual limit.
Available funds in my 401k plan include:
- BlackRock LifePath® Index 2050 Fund N (LIPIX) (0.06)
- Fidelity ® Growth Company Commingled Pool Class 3 (0.35)
- Artisan Mid Cap Account (0.5)
- Vanguard Russell 1000 Growth Index Trust (VRGWX) (0.02)
- Vanguard Russell 2000 Growth Index Trust (VRTGX) (0.03)
- Vanguard Institutional S&P 500 Index Trust (VFFSX) (0.011)
- DFA Small/Mid Cap Value Account (0.27)
- PIMCO Inflation Response Multi-Asset Fund Institutional (PIRMX) (0.86)
- PIMCO Total Return Account (0.25)
- International Value Account (0.48)
- PIMCO All Asset All Authority Fund Institutional Class (PAUIX) (3.08)
- Vanguard Short-Term Bond Index Fund Institutional Plus Shares (VBIPX) (0.04)
New annual Contributions
$19,500 to 401k + $9750 company match
$22,000 after tax to 401k in plan Roth conversion (contribution in 2020)
Current Investment Status
For 401k I do 50% pre-tax and 50% Roth up to the allowable amount. This is because I was unable to find good advice on which to choose, so I chose to split the difference. My 401k plan allows for an additional $28k in after tax contributions that are converted to Roth.
I know I am heavily over invested in my company stock. I participate is ESPP and sell as soon as I receive it to fund short term goals. I also have received large stock bonuses, which I've been holding onto, but have recently started selling as soon as long term capital gains tax applies. I plan to make a large sale of company stock in June, which should bring my holding down to 30%.
Financial Goals
- I plan on buying a house later this year and I already have enough for a down payment in a high interest savings account.
- I would like to retire as early as possible.
My 401k distribution seems to be wrong. According to the Three Fund Portfolio, I might want to move about 20% from foreign stock into bonds. Since I am still young and probably have a few decades until retirement, I have a fair appetite for risk. Given this, would it make sense for me to redistribute my 401k?
I'm willing to take even more risk in my personal (non-retirement) account. Assuming I convert all my company stock to index funds. Are my holdings reasonable? Should I add more foreign stocks and bonds. Besides just maximizing returns I also have an interest in investing in sectors that I feel strongly about, e.g., green energy, ESG, etc. hence the QCLN.
Thanks and any feedback is greatly appreciated!