Portfolio Questions

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
Jniels
Posts: 6
Joined: Wed Jul 29, 2015 4:11 pm

Portfolio Questions

Post by Jniels »

Emergency fund: Yes
Debt: $150,000 Home Mortgage 2.5 %
Filing Status: Married Filing Jointly
Tax Rates: 8% Federal 1% State
Residing in Michigan
60 yrs of age, Wife 58
I have a defined benefit pension of $90,000 Per year
My Wife will get small pensions of about $15,000 Per year when she turns 60
We both will take Social Security at 62. Him around 300 per month as what they call windfall pension knocks me down. Her about 1000 per month.
I think at this point I am most comfortable with about a 60/40 Split of stocks to bonds, perhaps a little more towards stocks up to 70/30.
Current Portfolio 1.1 Million
Traditional IRA
Vangaurd Total Bond Market(VBTLX) $363,894
Vangaurd Small Cap Growth(VSGAX) $$47, 524
Vangaurd Total Internation Stock(VTIAX) $176,954
Vangaurd Total Stock Market(VTSAX) $453,865
Vangaurd Cash Reserve MM $2, 500
Brokerage Account
Southern Company (SO) $45,000
Roth Ira
IQIYI (IQ) $2, 053 This I am considering dumping as it is at a $15, 000 loss
We live quite nicely on my 90 grand pension as it is, our only debt is our home, we own cars, a boat, tractors, atvs.
Here are my questions.
Obviously bonds have been terrible, should I be thinking of another place to put money. Does this portofolio look decent? I have been thinking lately about using a Vangaurd advisor, I just don't know if it would be worth the extra money . I guess I am looking for suggestions or even perhaps reassurance if it is deemed my portfolio is solid.
Thank you to all in advance, all comments, thoughts, advice is greatly appreciated. Thanks to all Jim
vtsnowdin
Posts: 116
Joined: Thu Dec 30, 2021 3:54 pm

Re: Portfolio Questions

Post by vtsnowdin »

Free advice and worth every penny.
You are in a very solid position so can relax a little. I'd consider your pension and SS cash flows as equivalent to bond income so you seem very over allocated on bonds at present but looking at the latest Fed minutes it might be good to just let them ride.
Whatever lets you sleep well at night. :)
Topic Author
Jniels
Posts: 6
Joined: Wed Jul 29, 2015 4:11 pm

Re: Portfolio Questions

Post by Jniels »

vtsnowdin wrote: Mon Jan 10, 2022 11:06 am Free advice and worth every penny.
You are in a very solid position so can relax a little. I'd consider your pension and SS cash flows as equivalent to bond income so you seem very over allocated on bonds at present but looking at the latest Fed minutes it might be good to just let them ride.
Whatever lets you sleep well at night. :)

Your comments are much appreciated. That makes sense about the SS and pension, I had never thought of it that way. Maybe when we have a dip it would be a good time to lighten the load on bonds a bit. I just wasn't sure about the International stock as I know they probably overlap quite a bit with my U.S stocks. The advisor through Vanguard I believe is .30 percent. I am not sure if that is a good route to go or not. Thank you much
User avatar
retired@50
Posts: 6964
Joined: Tue Oct 01, 2019 2:36 pm
Location: Living in the U.S.A.

Re: Portfolio Questions

Post by retired@50 »

Jniels wrote: Mon Jan 10, 2022 6:25 pm Vangaurd Total International Stock(VTIAX) $176,954
Vangaurd Total Stock Market(VTSAX) $453,865
...
I just wasn't sure about the International stock as I know they probably overlap quite a bit with my U.S stocks.
These two funds (shown above) have no overlap whatsoever. One fund is entirely US stocks, and the other is entirely Non-US stocks.

Regards,
This is one person's opinion. Nothing more.
vtsnowdin
Posts: 116
Joined: Thu Dec 30, 2021 3:54 pm

Re: Portfolio Questions

Post by vtsnowdin »

Jniels wrote: Mon Jan 10, 2022 6:25 pm
vtsnowdin wrote: Mon Jan 10, 2022 11:06 am Free advice and worth every penny.
You are in a very solid position so can relax a little. I'd consider your pension and SS cash flows as equivalent to bond income so you seem very over allocated on bonds at present but looking at the latest Fed minutes it might be good to just let them ride.
Whatever lets you sleep well at night. :)

Your comments are much appreciated. That makes sense about the SS and pension, I had never thought of it that way. Maybe when we have a dip it would be a good time to lighten the load on bonds a bit. I just wasn't sure about the International stock as I know they probably overlap quite a bit with my U.S stocks. The advisor through Vanguard I believe is .30 percent. I am not sure if that is a good route to go or not. Thank you much
I am personally biased against any international stock funds. Not based on the profit potential or risk but on the fact that some of the companies included are in fact the USA's enemies. I will not grab a dollar today with the potential of conflict and war down the road made more difficult to win because we have shared our technology with our adversaries.
I do own a bit of TSM, Taiwan semi conductor, as they are an ally and have plants here in the USA.
This is just my conservative opinion and point of view and will not be agreed to by many here.
Topic Author
Jniels
Posts: 6
Joined: Wed Jul 29, 2015 4:11 pm

Re: Portfolio Questions

Post by Jniels »

retired@50 wrote: Mon Jan 10, 2022 7:57 pm
Jniels wrote: Mon Jan 10, 2022 6:25 pm Vangaurd Total International Stock(VTIAX) $176,954
Vangaurd Total Stock Market(VTSAX) $453,865
...
I just wasn't sure about the International stock as I know they probably overlap quite a bit with my U.S stocks.
These two funds (shown above) have no overlap whatsoever. One fund is entirely US stocks, and the other is entirely Non-US stocks.

Regards,
ahh, that I did not realize either. I have never looked at the actual companies in the fund. I just took it for granted that many U.S companies (Apple, Microsoft, etc) would be in both the U.S Market along with International. Thanks for the info
User avatar
retiredjg
Posts: 46595
Joined: Thu Jan 10, 2008 12:56 pm

Re: Portfolio Questions

Post by retiredjg »

Jniels wrote: Mon Jan 10, 2022 8:28 am Obviously bonds have been terrible, should I be thinking of another place to put money.
Bonds may not be paying a lot, but they can still do their primary job - which is to preserve what you have.

A more aggressive portfolio may bring in more money, but it will also take a deeper dive when the market goes south. Those deep dives get more and more uncomfortable as you get older. There is no reason for your money to make you uncomfortable.

You don't need more money. You do need to keep the money you have. Be satisfied that your bond allocation will do the heavy lifting when it comes to preserving what you have. Stocks sure won't.

Does this portofolio look decent?
Yes, your portfolio is fine.

I have been thinking lately about using a Vangaurd advisor, I just don't know if it would be worth the extra money . I guess I am looking for suggestions or even perhaps reassurance if it is deemed my portfolio is solid.
Whether you should use a Vanguard advisor depends on why you would consider it. Your portfolio is fine as it is. It appears you understand how to rebalance it if the ratios go out of whack. So you don't need an advisor for that.

An advisor can be a good thing for people who are prone to making behavioral mistakes such as tinkering, selling out of fear, buying the latest shiny object, etc. There is nothing in your post to indicate anything like that. An unbiased advisor can also be a good thing if the portfolio manager in a family develops dementia or dies first but you can always leave instructions for what to do in that scenario.

Welcome to the forum. :happy
HomeStretch
Posts: 7326
Joined: Thu Dec 27, 2018 3:06 pm

Re: Portfolio Questions

Post by HomeStretch »

Do your and spouse’s pensions receive annual cost-of-living adjustments?
Outer Marker
Posts: 2183
Joined: Sun Mar 08, 2009 8:01 am

Re: Portfolio Questions

Post by Outer Marker »

vtsnowdin wrote: Mon Jan 10, 2022 8:45 pm I am personally biased against any international stock funds. Not based on the profit potential or risk but on the fact that some of the companies included are in fact the USA's enemies. I will not grab a dollar today with the potential of conflict and war down the road made more difficult to win because we have shared our technology with our adversaries.
Huh? Most of International is in Developed Markets, and the largest and strongest companies are in companies that are staunch U.S. allies - UK, France, Germany, Canada, Japan, S. Korea. If you want to avoid Emerging Markets (China, Russia, India, Brazil), that's one thing, but I wouldn't eschew international on that basis.
vtsnowdin
Posts: 116
Joined: Thu Dec 30, 2021 3:54 pm

Re: Portfolio Questions

Post by vtsnowdin »

Outer Marker wrote: Tue Jan 11, 2022 9:23 am
vtsnowdin wrote: Mon Jan 10, 2022 8:45 pm I am personally biased against any international stock funds. Not based on the profit potential or risk but on the fact that some of the companies included are in fact the USA's enemies. I will not grab a dollar today with the potential of conflict and war down the road made more difficult to win because we have shared our technology with our adversaries.
Huh? Most of International is in Developed Markets, and the largest and strongest companies are in companies that are staunch U.S. allies - UK, France, Germany, Canada, Japan, S. Korea. If you want to avoid Emerging Markets (China, Russia, India, Brazil), that's one thing, but I wouldn't eschew international on that basis.
As I said it is my own personnel bias and sticking with USA stock indexes I don't have to sort out the ones I consider belonging to enemies. Of course a lot of USA corporations have a lot of international interest. My own John Deer tractor was assembled in India with axle castings cast in China and hydrolic systems manufactured in Italy. That is internationally diversified enough for me. Reminds me I should pick up some DE stock. :beer
Topic Author
Jniels
Posts: 6
Joined: Wed Jul 29, 2015 4:11 pm

Re: Portfolio Questions

Post by Jniels »

retiredjg wrote: Tue Jan 11, 2022 8:36 am
Jniels wrote: Mon Jan 10, 2022 8:28 am Obviously bonds have been terrible, should I be thinking of another place to put money.
Bonds may not be paying a lot, but they can still do their primary job - which is to preserve what you have.

A more aggressive portfolio may bring in more money, but it will also take a deeper dive when the market goes south. Those deep dives get more and more uncomfortable as you get older. There is no reason for your money to make you uncomfortable.

You don't need more money. You do need to keep the money you have. Be satisfied that your bond allocation will do the heavy lifting when it comes to preserving what you have. Stocks sure won't.

Does this portofolio look decent?
Yes, your portfolio is fine.

I have been thinking lately about using a Vangaurd advisor, I just don't know if it would be worth the extra money . I guess I am looking for suggestions or even perhaps reassurance if it is deemed my portfolio is solid.
Whether you should use a Vanguard advisor depends on why you would consider it. Your portfolio is fine as it is. It appears you understand how to rebalance it if the ratios go out of whack. So you don't need an advisor for that.

An advisor can be a good thing for people who are prone to making behavioral mistakes such as tinkering, selling out of fear, buying the latest shiny object, etc. There is nothing in your post to indicate anything like that. An unbiased advisor can also be a good thing if the portfolio manager in a family develops dementia or dies first but you can always leave instructions for what to do in that scenario.

Welcome to the forum. :happy
Thank you so much for taking the time to respond. I do re-balance on a yearly basis. As for the advisor I don't need one for the portfolio I have, with my questions I was wondering if I should go that route to further diversify. Sounds like I am on the right track as I am. Thanks again!!!!
Topic Author
Jniels
Posts: 6
Joined: Wed Jul 29, 2015 4:11 pm

Re: Portfolio Questions

Post by Jniels »

HomeStretch wrote: Tue Jan 11, 2022 8:58 am Do your and spouse’s pensions receive annual cost-of-living adjustments?
No neither of us get COLA adjustments on our pensions...totally fixed
User avatar
retiredjg
Posts: 46595
Joined: Thu Jan 10, 2008 12:56 pm

Re: Portfolio Questions

Post by retiredjg »

Jniels wrote: Tue Jan 11, 2022 5:32 pm Thank you so much for taking the time to respond. I do re-balance on a yearly basis. As for the advisor I don't need one for the portfolio I have, with my questions I was wondering if I should go that route to further diversify. Sounds like I am on the right track as I am. Thanks again!!!!
Further diversify into what?

You already have everything you need. Just add money. :happy
User avatar
CyclingDuo
Posts: 4666
Joined: Fri Jan 06, 2017 9:07 am

Re: Portfolio Questions

Post by CyclingDuo »

Jniels wrote: Mon Jan 10, 2022 8:28 am Emergency fund: Yes
Debt: $150,000 Home Mortgage 2.5 %
Filing Status: Married Filing Jointly
Tax Rates: 8% Federal 1% State
Residing in Michigan
60 yrs of age, Wife 58
I have a defined benefit pension of $90,000 Per year
My Wife will get small pensions of about $15,000 Per year when she turns 60
We both will take Social Security at 62. Him around 300 per month as what they call windfall pension knocks me down. Her about 1000 per month.
I think at this point I am most comfortable with about a 60/40 Split of stocks to bonds, perhaps a little more towards stocks up to 70/30.
Current Portfolio 1.1 Million
Traditional IRA
Vangaurd Total Bond Market(VBTLX) $363,894
Vangaurd Small Cap Growth(VSGAX) $$47, 524
Vangaurd Total Internation Stock(VTIAX) $176,954
Vangaurd Total Stock Market(VTSAX) $453,865
Vangaurd Cash Reserve MM $2, 500
Brokerage Account
Southern Company (SO) $45,000
Roth Ira
IQIYI (IQ) $2, 053 This I am considering dumping as it is at a $15, 000 loss
We live quite nicely on my 90 grand pension as it is, our only debt is our home, we own cars, a boat, tractors, atvs.
Here are my questions.
Obviously bonds have been terrible, should I be thinking of another place to put money. Does this portofolio look decent? I have been thinking lately about using a Vangaurd advisor, I just don't know if it would be worth the extra money . I guess I am looking for suggestions or even perhaps reassurance if it is deemed my portfolio is solid.
Thank you to all in advance, all comments, thoughts, advice is greatly appreciated. Thanks to all Jim
IMO, that's a very smart looking portfolio which should act well as a DIY COLA for your non COLA pensions.

Although the combined monthly income from SS looks to be only $1300 if you take it at 62, at least that portion has a built in cost of living adjustment. Any thoughts at delaying SS to take advantage of what that could do for protection of your income since you have non-COLA pensions? That would be our number one suggestion for you and your spouse with a cursory glance at your situation in your original post quoted above. That builds in an even better DIY cost of living adjustment to allow you to sleep well at night.

Once you hit the combined pensions in 2 years at $105K before taxes, it should give your portfolio time to grow. What does your SS account show the annual sum would be if you both delayed until FRA? How about if you both delay until age 70? We would advocate delaying until 70 since you mention you are currently living fine under the $90K pension. It's really a solid fundamental way to build in a better DIY COLA to handle the declining purchasing power of your fixed pensions over the coming years.

Do you have children (grandchildren)? Any thoughts of legacy/charity with your portfolio?

CyclingDuo
"Save like a pessimist, invest like an optimist." - Morgan Housel
Topic Author
Jniels
Posts: 6
Joined: Wed Jul 29, 2015 4:11 pm

Re: Portfolio Questions

Post by Jniels »

CyclingDuo wrote: Tue Jan 11, 2022 6:36 pm
Jniels wrote: Mon Jan 10, 2022 8:28 am Emergency fund: Yes
Debt: $150,000 Home Mortgage 2.5 %
Filing Status: Married Filing Jointly
Tax Rates: 8% Federal 1% State
Residing in Michigan
60 yrs of age, Wife 58
I have a defined benefit pension of $90,000 Per year
My Wife will get small pensions of about $15,000 Per year when she turns 60
We both will take Social Security at 62. Him around 300 per month as what they call windfall pension knocks me down. Her about 1000 per month.
I think at this point I am most comfortable with about a 60/40 Split of stocks to bonds, perhaps a little more towards stocks up to 70/30.
Current Portfolio 1.1 Million
Traditional IRA
Vangaurd Total Bond Market(VBTLX) $363,894
Vangaurd Small Cap Growth(VSGAX) $$47, 524
Vangaurd Total Internation Stock(VTIAX) $176,954
Vangaurd Total Stock Market(VTSAX) $453,865
Vangaurd Cash Reserve MM $2, 500
Brokerage Account
Southern Company (SO) $45,000
Roth Ira
IQIYI (IQ) $2, 053 This I am considering dumping as it is at a $15, 000 loss
We live quite nicely on my 90 grand pension as it is, our only debt is our home, we own cars, a boat, tractors, atvs.
Here are my questions.
Obviously bonds have been terrible, should I be thinking of another place to put money. Does this portofolio look decent? I have been thinking lately about using a Vangaurd advisor, I just don't know if it would be worth the extra money . I guess I am looking for suggestions or even perhaps reassurance if it is deemed my portfolio is solid.
Thank you to all in advance, all comments, thoughts, advice is greatly appreciated. Thanks to all Jim
IMO, that's a very smart looking portfolio which should act well as a DIY COLA for your non COLA pensions.

Although the combined monthly income from SS looks to be only $1300 if you take it at 62, at least that portion has a built in cost of living adjustment. Any thoughts at delaying SS to take advantage of what that could do for protection of your income since you have non-COLA pensions? That would be our number one suggestion for you and your spouse with a cursory glance at your situation in your original post quoted above. That builds in an even better DIY cost of living adjustment to allow you to sleep well at night.

Once you hit the combined pensions in 2 years at $105K before taxes, it should give your portfolio time to grow. What does your SS account show the annual sum would be if you both delayed until FRA? How about if you both delay until age 70? We would advocate delaying until 70 since you mention you are currently living fine under the $90K pension. It's really a solid fundamental way to build in a better DIY COLA to handle the declining purchasing power of your fixed pensions over the coming years.

Do you have children (grandchildren)? Any thoughts of legacy/charity with your portfolio?

CyclingDuo
Thank you CyclingDuo for your response. I suppose we could consider delaying the SS until 70, I haven't really looked at what or how much more it would be. Yes we have 2 children and a couple grandkids. As it stands we give gift each of our children some money each year. They are young with families, we figure they will need it more now than when we are dead :P Again, thank you so much for your thoughts in this matter!!!
Post Reply