33 yr old checkup

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Topic Author
c47v3770
Posts: 2
Joined: Fri Jan 14, 2022 10:23 am

33 yr old checkup

Post by c47v3770 »

Hi all,

I would like to get your feedback regarding my asset allocations, if you don't mind.

Employer retirement account (profit sharing) - Vanguard
Lump sum equivalent to 20% of yearly income contributed annually.
Current value: $213,000
Allocations
  • VTSAX: 80%
  • VTIAX: 20%
Roth IRA - Fidelity
2022 contribution done. I picked some individual stocks in 2021 and one of them backfired. Waiting to see if it bounces back so I can sell.
Current value: $34,425
Allocations
  • VTSAX: 56%
  • AMZN: 17%
  • FSKAX: 15%
  • SPAXX: 6.57% - $2,258 not invested
  • FUBO: 5.43% - $2,674 loss
I feel like I need to fix my Roth IRA allocations but overall, am I in the right path? Would you do something differently?

My brokerage account includes stocks like AAPL, AMD, FM, MSFT, PYPL, TSLA. Value is $21,651 and my total gain is, after losses, $2,723. So not so great.

As for savings, I save about 2.5-3K/month.

Any feedback you can provide is much appreciated. Thank you.
mustang11
Posts: 19
Joined: Thu Nov 11, 2021 8:58 pm

Re: 33 yr old checkup

Post by mustang11 »

c47v3770 wrote: Fri Jan 14, 2022 10:53 am Hi all,

I would like to get your feedback regarding my asset allocations, if you don't mind.

Employer retirement account (profit sharing) - Vanguard
Lump sum equivalent to 20% of yearly income contributed annually.
Current value: $213,000
Allocations
  • VTSAX: 80%
  • VTIAX: 20%
Roth IRA - Fidelity
2022 contribution done. I picked some individual stocks in 2021 and one of them backfired. Waiting to see if it bounces back so I can sell.
Current value: $34,425
Allocations
  • VTSAX: 56%
  • AMZN: 17%
  • FSKAX: 15%
  • SPAXX: 6.57% - $2,258 not invested
  • FUBO: 5.43% - $2,674 loss
I feel like I need to fix my Roth IRA allocations but overall, am I in the right path? Would you do something differently?

My brokerage account includes stocks like AAPL, AMD, FM, MSFT, PYPL, TSLA. Value is $21,651 and my total gain is, after losses, $2,723. So not so great.

As for savings, I save about 2.5-3K/month.

Any feedback you can provide is much appreciated. Thank you.
You're Roth and taxable accounts could use some clean up. Bogleheads advise against holding individual stocks because this is a form of active portfolio management, which loses out to passive index portfolios 85-90% of the time. So with that in mind, I'd recommend selling AMZN and FUBO in your Roth. Cut your losses on FUBO and reallocate those funds. You're holding VTSAX and FSKAX, which are essentially the same thing. But since your account is with Fidelity, you'll likely incur transaction costs on VTSAX (can someone confirm?). So I'd reallocate your Roth to be: 80% VTSAX/FSKAX and 20% FTHIX. If no transaction costs for selling VTSAX then you could go 80/20 FSKAX/FTHIX or VTSAX/VTIAX.

Personally, the brokerage account I'd sell everything and reallocate to similar index funds/ETFs. To me paying the ~$400 in taxes is worth it to stop gambling and begin investing for the long-term in that account. That may not be what the "math" says to do. But that's what I'd do.
"An investment in knowledge always pays the best interest." - John C. Bogle
Topic Author
c47v3770
Posts: 2
Joined: Fri Jan 14, 2022 10:23 am

Re: 33 yr old checkup

Post by c47v3770 »

mustang11 wrote: Fri Jan 14, 2022 4:32 pm
c47v3770 wrote: Fri Jan 14, 2022 10:53 am Hi all,

I would like to get your feedback regarding my asset allocations, if you don't mind.

Employer retirement account (profit sharing) - Vanguard
Lump sum equivalent to 20% of yearly income contributed annually.
Current value: $213,000
Allocations
  • VTSAX: 80%
  • VTIAX: 20%
Roth IRA - Fidelity
2022 contribution done. I picked some individual stocks in 2021 and one of them backfired. Waiting to see if it bounces back so I can sell.
Current value: $34,425
Allocations
  • VTSAX: 56%
  • AMZN: 17%
  • FSKAX: 15%
  • SPAXX: 6.57% - $2,258 not invested
  • FUBO: 5.43% - $2,674 loss
I feel like I need to fix my Roth IRA allocations but overall, am I in the right path? Would you do something differently?

My brokerage account includes stocks like AAPL, AMD, FM, MSFT, PYPL, TSLA. Value is $21,651 and my total gain is, after losses, $2,723. So not so great.

As for savings, I save about 2.5-3K/month.

Any feedback you can provide is much appreciated. Thank you.
You're Roth and taxable accounts could use some clean up. Bogleheads advise against holding individual stocks because this is a form of active portfolio management, which loses out to passive index portfolios 85-90% of the time. So with that in mind, I'd recommend selling AMZN and FUBO in your Roth. Cut your losses on FUBO and reallocate those funds. You're holding VTSAX and FSKAX, which are essentially the same thing. But since your account is with Fidelity, you'll likely incur transaction costs on VTSAX (can someone confirm?). So I'd reallocate your Roth to be: 80% VTSAX/FSKAX and 20% FTHIX. If no transaction costs for selling VTSAX then you could go 80/20 FSKAX/FTHIX or VTSAX/VTIAX.

Personally, the brokerage account I'd sell everything and reallocate to similar index funds/ETFs. To me paying the ~$400 in taxes is worth it to stop gambling and begin investing for the long-term in that account. That may not be what the "math" says to do. But that's what I'd do.
Thanks! I like the idea of moving to just index funds in my Roth IRA. I chatted with a fidelity rep and was told there are no fees if I sell my shares but in VTSAX's fees and distributions page, I see "Transaction Fee (Online): $75" so I will have to double check that. I realize $75 isn't much in the long run but still. 80% VTSAX/FSKAX and 20% FTHIX sounds pretty good too.

Regarding my brokerage account.. my idea was to use it to buy individual stocks but then I keep looking at the market every day and stressing out so index funds is probably the way to go.

Do you believe VTSAX/VTIAX or FSKAX/FTHIX is a good "set it and forget it" allocation? I know real estate did well last year, so I've been eyeing real estate index funds as well but not sure how I feel about them yet.
orange12
Posts: 13
Joined: Tue Nov 06, 2018 6:38 am

Re: 33 yr old checkup

Post by orange12 »

Similar age to you. I used to do the individual stock thing but for 3+ years now have switched to only index. It frees up SO MUCH mental space, in addition to giving the best risk adjusted returns. Yes, I have FOMO when a friend rides TSLA from $100 to $1000, but you also never hear about the biotech stock that tanked :)
Itogliano
Posts: 23
Joined: Thu Jan 06, 2022 3:48 pm

Re: 33 yr old checkup

Post by Itogliano »

mustang11 wrote: Fri Jan 14, 2022 4:32 pm
You're Roth and taxable accounts could use some clean up. Bogleheads advise against holding individual stocks because this is a form of active portfolio management, which loses out to passive index portfolios 85-90% of the time. So with that in mind, I'd recommend selling AMZN and FUBO in your Roth. Cut your losses on FUBO and reallocate those funds. You're holding VTSAX and FSKAX, which are essentially the same thing. But since your account is with Fidelity, you'll likely incur transaction costs on VTSAX (can someone confirm?). So I'd reallocate your Roth to be: 80% VTSAX/FSKAX and 20% FTHIX. If no transaction costs for selling VTSAX then you could go 80/20 FSKAX/FTHIX or VTSAX/VTIAX.

Personally, the brokerage account I'd sell everything and reallocate to similar index funds/ETFs. To me paying the ~$400 in taxes is worth it to stop gambling and begin investing for the long-term in that account. That may not be what the "math" says to do. But that's what I'd do.
Is there any downside to holding both FSKAX and VTSAX other than a bit of added complexity (if that's the best word)?
User avatar
retired@50
Posts: 6964
Joined: Tue Oct 01, 2019 2:36 pm
Location: Living in the U.S.A.

Re: 33 yr old checkup

Post by retired@50 »

c47v3770 wrote: Fri Jan 14, 2022 5:21 pm ...
Thanks! I like the idea of moving to just index funds in my Roth IRA. I chatted with a fidelity rep and was told there are no fees if I sell my shares but in VTSAX's fees and distributions page, I see "Transaction Fee (Online): $75" so I will have to double check that. I realize $75 isn't much in the long run but still. 80% VTSAX/FSKAX and 20% FTHIX sounds pretty good too.
...
Do you believe VTSAX/VTIAX or FSKAX/FTHIX is a good "set it and forget it" allocation? I know real estate did well last year, so I've been eyeing real estate index funds as well but not sure how I feel about them yet.
1. Look into whether or not you'd have to pay the $75 fee to sell VTSAX. If so, I'd just keep it, but since you're at Fidelity, just use Fidelity funds or anybody's ETFs to trade with no transaction fees. Don't waste the $75 just for some sort of OCD cleanliness fetish.

2. I (and many other Bogleheads) believe that using a total US stock market fund and a total international stock market fund is sufficient for stock exposure. Someday you might want to add a bond fund in a tax-deferred account.

Regards,
This is one person's opinion. Nothing more.
drk
Posts: 2784
Joined: Mon Jul 24, 2017 10:33 pm
Location: Overlooking Elliott Bay

Re: 33 yr old checkup

Post by drk »

Check the link in my signature for the standard portfolio review format. There are some additional details that would be helpful in recommending changes (e.g., desired allocation).
Itogliano wrote: Fri Jan 14, 2022 5:43 pm Is there any downside to holding both FSKAX and VTSAX other than a bit of added complexity (if that's the best word)?
Nope! As long as you leave it be, it doesn't even add complexity. That said, I believe the Fidelity chat rep is correct that there is no fee to sell VTSAX if OP preferred to consolidate funds.
c47v3770 wrote: Fri Jan 14, 2022 10:53 am I picked some individual stocks in 2021 and one of them backfired. Waiting to see if it bounces back so I can sell.
🚨 This is a behavioral error. If you wouldn't re-buy the stock at current prices, you should sell now. Don't hold it in the hopes that it makes you whole because, guess what? The market has also moved since you bought the stock, so your cost-basis isn't even the right bogey to track.
mustang11
Posts: 19
Joined: Thu Nov 11, 2021 8:58 pm

Re: 33 yr old checkup

Post by mustang11 »

c47v3770 wrote: Fri Jan 14, 2022 5:21 pm
Do you believe VTSAX/VTIAX or FSKAX/FTHIX is a good "set it and forget it" allocation? I know real estate did well last year, so I've been eyeing real estate index funds as well but not sure how I feel about them yet.
Yes, those two total market index funds are excellent set it and forget it options. VTSAX/FSKAX both have real estate exposure, so putting a REIT Index Fund/ETF in there would be overlap. Also, REIT’s aren’t particularly tax efficient because they’re required to distribute capital gains/dividends that you’d owe taxes on in a taxable brokerage account.
"An investment in knowledge always pays the best interest." - John C. Bogle
mustang11
Posts: 19
Joined: Thu Nov 11, 2021 8:58 pm

Re: 33 yr old checkup

Post by mustang11 »

Itogliano wrote: Fri Jan 14, 2022 5:43 pm
Is there any downside to holding both FSKAX and VTSAX other than a bit of added complexity (if that's the best word)?
No material downside. Just an extra fund. You’d have to treat them as the same investment when calculating US equity weight since they’re essentially the same thing.
"An investment in knowledge always pays the best interest." - John C. Bogle
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