My Portfolio (Completed 2/13/24) Review?

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Redbard
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My Portfolio (Completed 2/13/24) Review?

Post by Redbard »

Portfolio updated 2/13/24, link..
https://www.dropbox.com/scl/fi/063mwgwx ... dcflr&dl=0

Hello, I would appreciate expert guidance with proper setup of my portfolio please.
I recently learned the basics of BogleHeads 3-Fund Portfolio and began investing assets sitting in my Vanguard sweep MM's.
I don't know enough to determine which accounts are most advantageous to hold each investment type so haven't invested everything yet but will soon.

Emergency funds:
Yes, 6+ months
Debt: $23,000 Auto Loan
Tax Filing Status: Single
Tax Rate: ~22% Federal, 0% State
State of Residence: FL
Age: 70

My accounts:
Checking/Savings USAA
Brokerage Rollover tIRA Vanguard
Brokerage Roth IRA Vanguard
Cash Plus Vanguard
(Do I need 4th account? Taxable?

My preliminary AA:
60% stocks (65% US / 35% INT)
30% bonds
10% Cash

Total portfolio: $225,000

Cash USAA: $45,000

Cash Plus: $50,000
$25,000 Sweep
$25,000 VUSXX

Rollover tIRA: $80,000
$40,000 VMFXX
$10,000 BND
$25,000 VTI
$5,000 VXUS

Roth IRA: $50,000
$27,000 VMFXX
$5,000 BND
$6,500 VTI
$2,000 VXUS
$4,200 VTIAX
$4,200 VTSAX

Income
$45,600 (only Social Security for now)

Budget/Expenses:
$45,000 (still sorting it out)(will keep ~$20k liquid to cover budget shortfalls next 3 years)(should this be in Cash Plus?)

Withdrawal:
Guesstimates? 15 to 25 years remaining?
Portfolio return 4% ?
Withdrawal rate 4% ?
Probably do not require portfolio withdrawals until age 73 RMD's kick in. Don't know what withdrawal amounts may be possible?

Thanks much!
Last edited by Redbard on Tue Feb 13, 2024 2:03 pm, edited 2 times in total.
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mhadden1
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by mhadden1 »

A few thoughts...
My accounts:
...
(Do I need 4th account? Taxable?
You could probably use a regular taxable Vanguard brokerage account. For example when you start taking RMDs you might want to reinvest in taxable if you don't spend it all. Also you get easy access to the Vanguard money market funds - right now paying around 5% - a good place to park cash.
Income
$45,600 (only Social Security for now)

Budget/Expenses:
$45,000
If you can keep your income to just Social Security and RMDs, you likely won't owe federal income tax, which is nice. Also, if you can keep taxable income below the top of the 12% bracket, you will have some room to pay the 0% rate on any qualified dividends and capital gains that you receive.
which accounts are most advantageous to hold each investment type
I would keep all of the desired bond portion (30% would be around $70,000) in the tIRA. Ideally the $50,000 Roth would hold funds with the highest expected return, probably Total Stock Market. Then you can allocate the rest into your tIRA and taxable account.

There are studies that suggest that at age 70, you should be able to withdraw around 4% of your portfolio each year and have a good chance of not running out.

Good luck to you!
Retired 12/31/2015
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Redbard
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by Redbard »

mhadden1 wrote: Sun Feb 04, 2024 8:03 pm A few thoughts...
My accounts:
...
(Do I need 4th account? Taxable?
You could probably use a regular taxable Vanguard brokerage account. For example when you start taking RMDs you might want to reinvest in taxable if you don't spend it all. Also you get easy access to the Vanguard money market funds - right now paying around 5% - a good place to park cash.
Income
$45,600 (only Social Security for now)

Budget/Expenses:
$45,000
If you can keep your income to just Social Security and RMDs, you likely won't owe federal income tax, which is nice. Also, if you can keep taxable income below the top of the 12% bracket, you will have some room to pay the 0% rate on any qualified dividends and capital gains that you receive.
which accounts are most advantageous to hold each investment type
I would keep all of the desired bond portion (30% would be around $70,000) in the tIRA. Ideally the $50,000 Roth would hold funds with the highest expected return, probably Total Stock Market. Then you can allocate the rest into your tIRA and taxable account.

There are studies that suggest that at age 70, you should be able to withdraw around 4% of your portfolio each year and have a good chance of not running out.

Good luck to you!

OK, thank you for your input.
I'll unload the bond fund in Roth and add more Stock funds.
tIRA can hold other than bond funds, right?
If my fund selections are the way to go I'll balance out my AA across accounts as close as I can.
lakpr
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by lakpr »

Redbard,

May I ask you WHY are you investing in a bond fund or ETF? What exactly is the purpose of BND in your portfolio?
[I am half expecting the answer along the lines of "I have been told so", but hopefully not, and you have a good rationale]

I also see both VTSAX and VTI in your Roth IRA. Why do you want to own both ETF share class and mutual fund share class of the same thing? It is like buying both plastic jug gallon of milk as well as paper carton quart of milk simultaneously. It is the same milk in the end.

Same with VTIAX and VXUS.

If it is the ETFs you prefer, you can simply call Vanguard and have them convert mutual funds to ETFs. If it is mutual funds you prefer, you can sell the ETFs and buy mutual funds, there are no tax costs for selling and buying in your Roth IRA.
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mhadden1
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by mhadden1 »

At Vanguard, for long term investments, I use VTI for US stocks, VXUS for international, and BND for fixed income. I also keep some cash in a MM fund for shorter term needs.

If you put 70k of BND in your tIRA , that leaves 10k for say, VTI - then with 50k of VTI in your Roth, the rest of your VTI, VXUS, and maybe some MM cash can go in your Vanguard taxable account.
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Redbard
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by Redbard »

lakpr wrote: Sun Feb 04, 2024 9:30 pm Redbard,

May I ask you WHY are you investing in a bond fund or ETF? What exactly is the purpose of BND in your portfolio?
[I am half expecting the answer along the lines of "I have been told so", but hopefully not, and you have a good rationale]

I also see both VTSAX and VTI in your Roth IRA. Why do you want to own both ETF share class and mutual fund share class of the same thing? It is like buying both plastic jug gallon of milk as well as paper carton quart of milk simultaneously. It is the same milk in the end.

Same with VTIAX and VXUS.

If it is the ETFs you prefer, you can simply call Vanguard and have them convert mutual funds to ETFs. If it is mutual funds you prefer, you can sell the ETFs and buy mutual funds, there are no tax costs for selling and buying in your Roth IRA.
Appreciate you posts Lakpr!
Well, to be truthful my choices are my initial stab at conforming to 3-fund portfolio and investing all I can now.
I'm not to keen on bond funds like BND so maybe a TIPS Fund could fill that space and/or something else? Is there a MM or ETF that ladders TIPS so you don't need to manage that yourself?
As far as the ETF vs MM I haven't sorted out the pros/cons of either yet and simply bought both for now.
lakpr
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by lakpr »

Redbard wrote: Mon Feb 05, 2024 7:42 am
lakpr wrote: Sun Feb 04, 2024 9:30 pm Redbard,

May I ask you WHY are you investing in a bond fund or ETF? What exactly is the purpose of BND in your portfolio?
[I am half expecting the answer along the lines of "I have been told so", but hopefully not, and you have a good rationale]

I also see both VTSAX and VTI in your Roth IRA. Why do you want to own both ETF share class and mutual fund share class of the same thing? It is like buying both plastic jug gallon of milk as well as paper carton quart of milk simultaneously. It is the same milk in the end.

Same with VTIAX and VXUS.

If it is the ETFs you prefer, you can simply call Vanguard and have them convert mutual funds to ETFs. If it is mutual funds you prefer, you can sell the ETFs and buy mutual funds, there are no tax costs for selling and buying in your Roth IRA.
Appreciate you posts Lakpr!
Well, to be truthful my choices are my initial stab at conforming to 3-fund portfolio and investing all I can now.
I'm not to keen on bond funds like BND so maybe a TIPS Fund could fill that space and/or something else? Is there a MM or ETF that ladders TIPS so you don't need to manage that yourself?
As far as the ETF vs MM I haven't sorted out the pros/cons of either yet and simply bought both for now.
Thanks for indulging my questions, Redbard!

Since you asked for simplication of your portfolio, I thought one immediate step you can make is to make a decision on either the ETFs or mutual funds, and sell the other within the Roth IRA and consolidate.

Regarding BND, I have my biases and will layout. I have made multiple posts about this in the recent past, and as another poster put it, "been quite vocal" about my distaste for BND / VBTLX / Total bond funds.

Background history: In Jan-2021, I made a bit of massive rebalancing, where, following the dogma of Bogleheads, wanted to consolidate all my fixed income within the tax-deferred accounts. I wanted a 70:30 portfolio. I was also drinking the KoolAid about how VBTIX (the Institutional version of the total bond fund) available in my 401(k) is a "safe" fund. So I plowed in $430k+ into this account, and rest of my accounts are all in stocks (including mr and mrs lakpr's tax-deferred and Roth); all bonds in this one particular 401(k).

Well, 2022 happened. My "safe" assets shrank to $340k+ by October 2023. Although to be fair, some of those losses were pared, as of Jan-31-2024 I am at around 378k+. That's still about $45k or so less than what I started with.

Then I got an education about the "duration risk" and "interest rate risk" of the bond funds on these forums ... I was told that, if only I would wait again for 6 to 7 more years, the "average duration" of the bond fund, I *MIGHT* be made whole, but no guarantee. If there were another rate hike in the intervening 7 years, I will be stuck with waiting 7 *MORE* years. yada yada

The larger point I want to make here is -- is your time horizon sufficient enough to wait 7 years more, and if something happens within those first 7 years, can you wait another 7 years more, etc. etc.? I am *NOT*! I invested in the gosh darned fund because it was touted to be "safe", "acts as a ballast", etc. Then find out that "bond funds behaved exactly as they are supposed to!", "you should not have invested in something you did not understand about", "bond funds are still safe, relative to stocks", etc. etc.

If you are like me, take charge of the fixed income portion of your portfolio, and maintain CDs, Treasuries, I-bonds etc. that you KNOW will return your principal back at the end of a defined period, plus coupon payments along the way.

If your time horizon for the withdrawal is at least 14 years more, perhaps BND / VBTLX might be a good choice. If not, seek your fixed income elsewhere. Note that my criticism here is of BOND FUNDS, not individual BONDS themselves.

Since that painful lesson, I am loading up on CDs and T-bills and I-bonds in my taxable portfolio. Not a penny more into Total Bond Fund, or for that matter, any bond fund. This runs counter to another Boglehead dogma -- of "tax efficient placement" that advocates placing bonds in tax-deferred and not in taxable. My take on it is: efficiency/schmefficiency, I would rather pay $3 in taxes on a $10 interest payment I received on a $100 investment I made; than lose $10 on my $100 investment and having no taxes to pay. My 401(k) also does not have a brokerage link; so it is bond funds (VBTIX and VTAPX) or place fixed income in taxable accounts.

Pick your alternative.

You will also get quite a few other Bogleheads, who will advise "buy the dip" in bond funds, "you should be fine 7 years later", etc. Evaluate that feedback (and of course, my post here too!) with respect to your specific risk tolerance and your specific goals. Which is the reason why I asked about "WHAT IS YOUR PURPOSE" of investing in BND.

Edited to add: I see that you are age 70. I think you can invest in MYGAs (there is a 10% penalty if MYGAs are redeemed when younger than 59.5). The BND SEC yield is 4.30% -- which means, if you invest in BND today and hold to the duration -- 6 to 7 years -- you will projected to, not guaranteed! get 4.30% return on your money. But I do find MYGAs, for a 70 year old male in FL, A rated or better insurance companies, offering 5.3% to 5.5%, guaranteed, for a period up to 10 years, and your principal will be safe! A full percentage point higher.

Downside, of course, is if the rates fall with BND you MAY reap the benefit, but not with MYGAs. And of course, the pain of seeing a rather large chunk of your portfolio be out of your control entirely.

https://advisors.vanguard.com/investmen ... f#overview
https://www.blueprintincome.com/fixed-a ... 1&rating=A
Last edited by lakpr on Mon Feb 05, 2024 8:44 am, edited 2 times in total.
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Redbard
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by Redbard »

Right, I did read of you bond experience, not good.
Interest rates low, bonds blow or something like that.
I think I'll sell BND today.
I wonder if VIPSX is something I should own? I don't have the bandwidth to buy/manage my own TIPS ladder on secondary market.
Before rates go down too much, I may look at shorter term CD's to put some cash to work.

Edit:
Thanks, I'll investigate MYGA's
Last edited by Redbard on Mon Feb 05, 2024 8:50 am, edited 1 time in total.
lakpr
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by lakpr »

Redbard wrote: Mon Feb 05, 2024 8:42 am Right, I did read of you bond experience, not good.
Interest rates low, bonds blow or something like that.
I think I'll sell BND today.
I wonder if VIPSX is something I should own? I don't have the bandwidth to buy/manage my own TIPS ladder on secondary market.
Before rates go down too much, I may look at shorter term CD's to put some cash to work .
VIPSX also has the same defect: interest rate risk, and it will sell the TIPS that are scheduled to mature in the next 1 to 5 years to maintain its "duration", and that may well be when it is completely disadvantageous to you.

I offered MYGAs above as an alternative.
If you want inflation protection, unfortunately I think you WILL have to prepare a TIPS ladder. But I was told, at least at Fidelity, it is a one-time setup and forget it. I don't have any account at Fidelity so I can't direct you; and neither can I direct you at Vanguard (I work in the financial industry, in IT, and unless I want to have my employer scrutinize every investment I make, I cannot have a brokerage account; which is why I am still on the Vanguard mutual fund platform and paying their bullying fees of $25 per mutual fund per year).
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by KPG »

lakpr,
I got you beat on the "safe" fund. 12-31-22 my "safe" intermediate bond fund VFIDX had a loss of $123865. 1-26-24 it still has a Loss of $95660. I think I will be dead before that fund recovers!!
KPG
lakpr
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by lakpr »

KPG wrote: Tue Feb 06, 2024 5:19 pm lakpr,
I got you beat on the "safe" fund. 12-31-22 my "safe" intermediate bond fund VFIDX had a loss of $123865. 1-26-24 it still has a Loss of $95660. I think I will be dead before that fund recovers!!
KPG
Oh Lordy! Truly sorry to hear that. Misery loves company and all that, I am glad you chimed in, but :O truly jaw dropping
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by rkhusky »

KPG wrote: Tue Feb 06, 2024 5:19 pm lakpr,
I got you beat on the "safe" fund. 12-31-22 my "safe" intermediate bond fund VFIDX had a loss of $123865. 1-26-24 it still has a Loss of $95660. I think I will be dead before that fund recovers!!
KPG
VFIDX is an intermediate corporate bond fund. Why did you think it was safe (whatever safe means)? It will likely recover in less than 5 years. Remember that the duration measures when you will start to benefit from the interest rate increase. It will be back to even a lot sooner than that.
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by Elysium »

Redbard,

You sound like you can do without managing individual portfolio components. I suggest you look at a one fund portfolio like a balanced fund weighted towards income, Vanguard Wellesley Income fund (VWIAX) should meet the needs of your main fund portfolio. This fund is about 65% fixed income and 35% stocks, with the way fund is managed you will not see all the variations with bonds and stocks, instead just get the annual returns, plus the income stream from the fund is really good. You can't go wrong and will likely do far better than anything you will come up with even a 3-fund you design and manage due to behavioral reasons. This fund has stood the test of time. I recommend you do that and forget it.

The rest of your money in non-fund type accounts can stay with CD's, T-Bills, Savings accounts etc. You will do better than 90% of your peer group by doing this.

Good luck.
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Taylor Larimore
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by Taylor Larimore »

Redbard wrote: Sun Feb 04, 2024 6:30 pm Hello, I would appreciate expert guidance with proper setup of my portfolio please.
I recently learned the basics of BogleHeads 3-Fund Portfolio and began investing assets sitting in my Vanguard sweep MM's.
I don't know enough to determine which accounts are most advantageous to hold each investment type so haven't invested everything yet but will soon.
Redbard:

I think this article in our wiki will answer your question:

https://www.bogleheads.org/wiki/Tax-eff ... _placement

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "Asset allocation is critically important; but cost is critically important, too -- All other factors pale into insignificance."
"Simplicity is the master key to financial success." -- Jack Bogle
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by rossington »

lakpr wrote: Mon Feb 05, 2024 8:26 am Downside, of course, is if the rates fall with BND you MAY reap the benefit
If rates fall then the downside flips from bond funds to the individual interest bearing investments that were mentioned. It really does work both ways.
Just to be fair the OP needs to understand that.
"Success is going from failure to failure without loss of enthusiasm." Winston Churchill.
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by retiredjg »

Redbard wrote: Sun Feb 04, 2024 6:30 pm Hello, I would appreciate expert guidance with proper setup of my portfolio please.
There are lots of good and different ways to set up a portfolio with these building blocks. It just depends on what is important to you and what your preferences are.

For example, your savings account is 20% of your portfolio but you only want 10% of your portfolio in cash. Are you willing to move half of the savings account into a taxable account at Vanguard? Or would you rather keep the entire $45k in savings and change your thinking on your percentage of cash?

Would you be happy with your entire taxable account being in 1 fund (international) or do you want more than one fund in taxable?

How important is simplicity to you?


If your only income is your SS at this point, you are not anywhere near the 22% tax bracket. You are in the 12% tax bracket, with some room to spare. Is there other income?
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Redbard
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by Redbard »

retiredjg wrote: Wed Feb 07, 2024 11:19 am There are lots of good and different ways to set up a portfolio with these building blocks. It just depends on what is important to you and what your preferences are.

For example, your savings account is 20% of your portfolio but . ..

Would you be happy with your entire taxable account being in 1 fund (international) or do you want more than one fund in taxable?

How important is simplicity to you?

If your only income is your SS at this point, you are not anywhere near the 22% tax bracket. You are in the 12% tax bracket, with some room to spare. Is there other income?
Hello, I will probably follow your suggestions.

Reason so much cash is I waiting for advice on how to invest it . Cash is existing funds still in sweep MM, $77k in 401k rollovers and I moved 50k from outside savings to new Cash Plus acct in January.
I began investing some of the funds parked in my vanguard brokerage sweep accounts but paused until I know how to fill out asset allocation.
I'm asking for guidance on how to logically put all assets to work .

I don't yet have a taxable brokerage acct but I can open one and buy whatever should go there.

Simplicity is good, mainly to limit temptations to mess with things

I have been maxing out Roth contributions, 7k or so each year to IRA and 25k or so to Roth 401k now rolled over to IRA.
I need to consider if and when Roth conversions make sense going forward and staying under 22% tax bracket.

SS only income for now. Enjoying first year ever not working.
Since my total net worth is rather low due to losing my shirt several times over the years, dot com etc l may accept consulting contracts in future which would bump me up a bracket.

I'm assuming I will have no additional income for now and planning bare bones budget that matches total I expect to be available from SS and investment withdrawals ($TBD).
I have other outside cash to supplement SS for next three years but if logical I will move to Cash Plus or wherever. In three years when RMA kicks in I will need to calculate what I can withdrawal each year and not run out of money in 15, 20 or 25 years.
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Redbard
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by Redbard »

Elysium wrote: Tue Feb 06, 2024 5:58 pm Redbard,

You sound like you can do without managing individual portfolio components. I suggest you look at a one fund portfolio like a balanced fund weighted towards income, Vanguard Wellesley Income fund (VWIAX) should meet the needs of your main fund portfolio. This fund is about 65% fixed income and 35% stocks, with the way fund is managed you will not see all the variations with bonds and stocks, instead just get the annual returns, plus the income stream from the fund is really good. You can't go wrong and will likely do far better than anything you will come up with even a 3-fund you design and manage due to behavioral reasons. This fund has stood the test of time. I recommend you do that and forget it.

The rest of your money in non-fund type accounts can stay with CD's, T-Bills, Savings accounts etc. You will do better than 90% of your peer group by doing this.

Good luck.
Thank you, I will take your suggestions into consideration.
VWIAX could work.
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Redbard
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by Redbard »

Taylor Larimore wrote: Tue Feb 06, 2024 6:05 pm
Redbard wrote: Sun Feb 04, 2024 6:30 pm Hello, I would appreciate expert guidance with proper setup of my portfolio please.
I recently learned the basics of BogleHeads 3-Fund Portfolio and began investing assets sitting in my Vanguard sweep MM's.
I don't know enough to determine which accounts are most advantageous to hold each investment type so haven't invested everything yet but will soon.
Redbard:

I think this article in our wiki will answer your question:

https://www.bogleheads.org/wiki/Tax-eff ... _placement

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "Asset allocation is critically important; but cost is critically important, too -- All other factors pale into insignificance."
Thank you, I have read the wiki a few times but haven't yet sorted out how to apply the guidelines to my portfolio. Working on it ;>)
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Redbard
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by Redbard »

Today opened a Taxable Brokerage acct
Added $20k from outside savings and invested it in:
$13,000 VTI
$ 7,000 VXUS

Working on balancing per my AA
Last edited by Redbard on Fri Feb 09, 2024 1:39 pm, edited 1 time in total.
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mhadden1
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by mhadden1 »

Redbard wrote: Thu Feb 08, 2024 12:21 pm Today opened a Taxable Brokerage acct
Good work to get going with this. :moneybag
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retiredjg
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by retiredjg »

Redbard wrote: Thu Feb 08, 2024 12:21 pm Today opened a Taxable Brokerage acct
Added $20k from outside savings and invested it in:
$23,000 VTI
$ 7,000 VXUS

Working on balancing per my AA
Yesterday, this is what you had. Total = $225k

Savings $45k (20%)

Vanguard Cash plus $50k (22%)

Taxable $0

tIRA $80k (36%)

Roth IRA $50k (22%)

I guess these numbers have changed....what are the numbers now?
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Redbard
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by Redbard »

retiredjg wrote: Thu Feb 08, 2024 2:42 pm
Redbard wrote: Thu Feb 08, 2024 12:21 pm Today opened a Taxable Brokerage acct
Added $20k from outside savings and invested it in:
$23,000 VTI
$ 7,000 VXUS

Working on balancing per my AA
Yesterday, this is what you had. Total = $225k

Savings $45k (20%)

Vanguard Cash plus $50k (22%)

Taxable $0

tIRA $80k (36%)

Roth IRA $50k (22%)

I guess these numbers have changed....what are the numbers now?
Yes, some change..
As of cob today: $250,000

Checking/Savings $50k (20%)

Vanguard Cash plus $50k (20%)
$25,000 Sweep
$25,000 VUSXX Vanguard Treasury Money Market Fund

Taxable Brokerage $20,000 (8%)
$13,000 VTI Vanguard Total Stock Market Index Fund
$7,000 VXUS Vanguard Total Intl Stock Idx Fund

tIRA $80k (32%)
$50,000 VMFXX Vanguard Federal Money Market Investor
$10,000 BND Vanguard Total Bond Market Index Fund
$14,000 VTI Vanguard Total Stock Market Index Fund
$5,000 VXUS Vanguard Total Intl Stock Idx Fund


Roth IRA $50k (20%)
$33,000 VMFXX Vanguard Federal Money Market Investor
$0 BND Vanguard Total Bond Market Index Fund
$6,500 VTI Vanguard Total Stock Market Index Fund
$2,100 VXUS Vanguard Total Intl Stock Idx Fund
$4,200 VTIAX Vanguard Total Intl Stock Index Admiral
$4,200 VTSAX Vanguard Total Stock Mkt Idx Adm

Basically the $100k cash is looking for a home.
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by pkcrafter »

KPG said, "I got you beat on the "safe" fund. 12-31-22 my "safe" intermediate bond fund VFIDX had a loss of $123865."

I'm not sure what 123865 means, one thousand--? Here is the performance chart for VFIDX

https://www.morningstar.com/funds/xnas/vfidx/chart


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.
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by lakpr »

pkcrafter wrote: Thu Feb 08, 2024 7:23 pm KPG said, "I got you beat on the "safe" fund. 12-31-22 my "safe" intermediate bond fund VFIDX had a loss of $123865."

I'm not sure what 123865 means, one thousand--? Here is the performance chart for VFIDX

https://www.morningstar.com/funds/xnas/vfidx/chart


Paul
If you look at other posts from @KPG, he did mean he lost $123,865; over one-hundred twenty three thousand dollars.
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Redbard
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by Redbard »

Taylor Larimore wrote: Tue Feb 06, 2024 6:05 pm
Redbard wrote: Sun Feb 04, 2024 6:30 pm Hello, I would appreciate expert guidance with proper setup of my portfolio please.
I recently learned the basics of BogleHeads 3-Fund Portfolio and began investing assets sitting in my Vanguard sweep MM's.
I don't know enough to determine which accounts are most advantageous to hold each investment type so haven't invested everything yet but will soon.
Redbard:

I think this article in our wiki will answer your question:

https://www.bogleheads.org/wiki/Tax-eff ... _placement

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "Asset allocation is critically important; but cost is critically important, too -- All other factors pale into insignificance."
Taylor,
I'm reading up on the wiki advice, fund placement, which lead me to asset allocation in multiple accounts. I want to keep rebalancing simple, new investments will probably be minimal. Choosing how to spread assets across portfolio, mirroring or whole portfolio allocation will take me some time to sort out. The Cascading Retirement Allocation Spreadsheet downloaded from wiki looks helpful.
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by retiredjg »

Redbard wrote: Thu Feb 08, 2024 4:04 pm As of cob today: $250,000

Checking/Savings $50k (20%)

Vanguard Cash plus $50k (20%)
$25,000 Sweep
$25,000 VUSXX Vanguard Treasury Money Market Fund


Taxable Brokerage $20,000 (8%)
$13,000 VTI Vanguard Total Stock Market Index Fund
$7,000 VXUS Vanguard Total Intl Stock Idx Fund

tIRA $80k (32%)
$50,000 VMFXX Vanguard Federal Money Market Investor
$10,000 BND Vanguard Total Bond Market Index Fund
$14,000 VTI Vanguard Total Stock Market Index Fund
$5,000 VXUS Vanguard Total Intl Stock Idx Fund


Roth IRA $50k (20%)
$33,000 VMFXX Vanguard Federal Money Market Investor
$0 BND Vanguard Total Bond Market Index Fund
$6,500 VTI Vanguard Total Stock Market Index Fund
$2,100 VXUS Vanguard Total Intl Stock Idx Fund
$4,200 VTIAX Vanguard Total Intl Stock Index Admiral
$4,200 VTSAX Vanguard Total Stock Mkt Idx Adm

Basically the $100k cash is looking for a home.
Which $100k is looking for a home?

If you only want 10% cash in your portfolio, then a lot more than $100k needs to be invested in something. That includes half of what you are calling checking/savings.

If you want to keep the $50k in cash checking and savings, that is 20% of the portfolio right there.
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by Redbard »

retiredjg wrote: Fri Feb 09, 2024 7:32 am
Redbard wrote: Thu Feb 08, 2024 4:04 pm As of cob today: $250,000

Checking/Savings $50k (20%)

Vanguard Cash plus $50k (20%)
$25,000 Sweep
$25,000 VUSXX Vanguard Treasury Money Market Fund


Taxable Brokerage $20,000 (8%)
$13,000 VTI Vanguard Total Stock Market Index Fund
$7,000 VXUS Vanguard Total Intl Stock Idx Fund

tIRA $80k (32%)
$50,000 VMFXX Vanguard Federal Money Market Investor
$10,000 BND Vanguard Total Bond Market Index Fund
$14,000 VTI Vanguard Total Stock Market Index Fund
$5,000 VXUS Vanguard Total Intl Stock Idx Fund


Roth IRA $50k (20%)
$33,000 VMFXX Vanguard Federal Money Market Investor
$0 BND Vanguard Total Bond Market Index Fund
$6,500 VTI Vanguard Total Stock Market Index Fund
$2,100 VXUS Vanguard Total Intl Stock Idx Fund
$4,200 VTIAX Vanguard Total Intl Stock Index Admiral
$4,200 VTSAX Vanguard Total Stock Mkt Idx Adm

Basically the $100k cash is looking for a home.
Which $100k is looking for a home?

If you only want 10% cash in your portfolio, then a lot more than $100k needs to be invested in something. That includes half of what you are calling checking/savings.

If you want to keep the $50k in cash checking and savings, that is 20% of the portfolio right there.
OK I think the checking savings should be considered emergency fund excluded from assets. I'll soon move all of savings (SS deposit acct} to Cash Plus leaving 5-7k in checking. I'll redirect SA deposit to Cash Plus.
Also, cash AA of 10% is not definite. My SS in/out will cover expenses for now.
I think I would be OK portfolio nearly fully invested with some % principal and inflation protected.
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by retiredjg »

Redbard wrote: Fri Feb 09, 2024 8:13 am
retiredjg wrote: Fri Feb 09, 2024 7:32 am
Redbard wrote: Thu Feb 08, 2024 4:04 pm As of cob today: $250,000

Checking/Savings $50k (20%)

Vanguard Cash plus $50k (20%)
$25,000 Sweep
$25,000 VUSXX Vanguard Treasury Money Market Fund


Taxable Brokerage $20,000 (8%)
$13,000 VTI Vanguard Total Stock Market Index Fund
$7,000 VXUS Vanguard Total Intl Stock Idx Fund

tIRA $80k (32%)
$50,000 VMFXX Vanguard Federal Money Market Investor
$10,000 BND Vanguard Total Bond Market Index Fund
$14,000 VTI Vanguard Total Stock Market Index Fund
$5,000 VXUS Vanguard Total Intl Stock Idx Fund


Roth IRA $50k (20%)
$33,000 VMFXX Vanguard Federal Money Market Investor
$0 BND Vanguard Total Bond Market Index Fund
$6,500 VTI Vanguard Total Stock Market Index Fund
$2,100 VXUS Vanguard Total Intl Stock Idx Fund
$4,200 VTIAX Vanguard Total Intl Stock Index Admiral
$4,200 VTSAX Vanguard Total Stock Mkt Idx Adm

Basically the $100k cash is looking for a home.
Which $100k is looking for a home?

If you only want 10% cash in your portfolio, then a lot more than $100k needs to be invested in something. That includes half of what you are calling checking/savings.

If you want to keep the $50k in cash checking and savings, that is 20% of the portfolio right there.
OK I think the checking savings should be considered emergency fund excluded from assets. I'll soon move all of savings (SS deposit acct} to Cash Plus leaving 5-7k in checking. I'll redirect SA deposit to Cash Plus.
Also, cash AA of 10% is not definite. My SS in/out will cover expenses for now.
I think I would be OK portfolio nearly fully invested with some % principal and inflation protected.
So, this?

Checking $5k - $7 but not part of the overall asset allocation

Cash plus will be about $95k? Will this be part of the asset allocation or not? Or will some be moved to the taxable account?

Rest the same as before.
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by Redbard »

retiredjg wrote: Fri Feb 09, 2024 8:21 am
Redbard wrote: Fri Feb 09, 2024 8:13 am
retiredjg wrote: Fri Feb 09, 2024 7:32 am
Redbard wrote: Thu Feb 08, 2024 4:04 pm As of cob today: $250,000

Checking/Savings $50k (20%)

Vanguard Cash plus $50k (20%)
$25,000 Sweep
$25,000 VUSXX Vanguard Treasury Money Market Fund


Taxable Brokerage $20,000 (8%)
$13,000 VTI Vanguard Total Stock Market Index Fund
$7,000 VXUS Vanguard Total Intl Stock Idx Fund

tIRA $80k (32%)
$50,000 VMFXX Vanguard Federal Money Market Investor
$10,000 BND Vanguard Total Bond Market Index Fund
$14,000 VTI Vanguard Total Stock Market Index Fund
$5,000 VXUS Vanguard Total Intl Stock Idx Fund


Roth IRA $50k (20%)
$33,000 VMFXX Vanguard Federal Money Market Investor
$0 BND Vanguard Total Bond Market Index Fund
$6,500 VTI Vanguard Total Stock Market Index Fund
$2,100 VXUS Vanguard Total Intl Stock Idx Fund
$4,200 VTIAX Vanguard Total Intl Stock Index Admiral
$4,200 VTSAX Vanguard Total Stock Mkt Idx Adm

Basically the $100k cash is looking for a home.
Which $100k is looking for a home?

If you only want 10% cash in your portfolio, then a lot more than $100k needs to be invested in something. That includes half of what you are calling checking/savings.

If you want to keep the $50k in cash checking and savings, that is 20% of the portfolio right there.
OK I think the checking savings should be considered emergency fund excluded from assets. I'll soon move all of savings (SS deposit acct} to Cash Plus leaving 5-7k in checking. I'll redirect SA deposit to Cash Plus.
Also, cash AA of 10% is not definite. My SS in/out will cover expenses for now.
I think I would be OK portfolio nearly fully invested with some % principal and inflation protected.
So, this?

Checking $5k - $7 but not part of the overall asset allocation

Cash plus will be about $95k? Will this be part of the asset allocation or not? Or will some be moved to the taxable account?

Rest the same as before.
Um? I'm not sure what to do with money now parked in Cash Plus. I assume much would end up invested in taxable account to balance out AA after Roth and tIRA. ?
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by retiredjg »

How do you feel about holding your 10% cash allocation (about $25k) in the Cash Plus account and investing the rest of the portfolio?

That would leave $5k in checking (not part of the asset allocation), $25k in Cash Plus, and the rest of the portfolio invested in stocks funds and bond funds.
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Redbard
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by Redbard »

retiredjg wrote: Fri Feb 09, 2024 8:56 am How do you feel about holding your 10% cash allocation (about $25k) in the Cash Plus account and investing the rest of the portfolio?

That would leave $5k in checking (not part of the asset allocation), $25k in Cash Plus, and the rest of the portfolio invested in stocks funds and bond funds.
OK, Yes sir
For 25k Cash Plus cash, hold in CP sweep or in one of the 5 funds available?
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by pkcrafter »

lakpr wrote: Thu Feb 08, 2024 8:18 pm
pkcrafter wrote: Thu Feb 08, 2024 7:23 pm KPG said, "I got you beat on the "safe" fund. 12-31-22 my "safe" intermediate bond fund VFIDX had a loss of $123865."

I'm not sure what 123865 means, one thousand--? Here is the performance chart for VFIDX

https://www.morningstar.com/funds/xnas/vfidx/chart


Paul
If you look at other posts from @KPG, he did mean he lost $123,865; over one-hundred twenty three thousand dollars.
VFIDX lost 13.78 % in 2022, so you are saying $123,865 was 13% of the total investment in VFIDX?

https://investor.vanguard.com/investmen ... mance-fees
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.
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by KPG »

pkcrafter,

Pretty, Pretty, close!

KPG
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by retiredjg »

Here's an idea based on a total portfolio of $218,188. There is $5k left in checking account. Rest is moved to investments.


Taxable - Vanguard Cash plus 11.5%
11.5% Cash of some kind (your preference - I'm not familiar with what they offer in Cash plus)


Taxable 29.8% (includes $45k from the cash plus account)
14.8% Total Stock Index
15% Total International Index


tIRA 35.9%
6.9% 500 Index
14% Total Bond Market
15% TIPs mutual fund


Roth IRA 22.8%
16.8% 500 index
6% Vanguard Developed Markets Index

This is very close to 60% stock, 30% bond, 10% cash with 35% of stocks (21% of portfolio) in international.

Since you are no longer making significant contributions, I set it up so that rebalancing can happen without new money flowing in. You can rebalance between US and foreign in the Roth IRA. You can rebalance between stocks and bonds in the tIRA.

I put 500 index and Developed markets into the IRAs so that you would not have to worry about having a wash sale if you sell Total Stock or Total International in the taxable account at a loss.

Most of the international is in taxable where you can get the foreign tax credit.

Let me know what you like and don't like about this idea. As I said earlier, there are many ways to achieve what you want. This is just one of them.
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by Redbard »

OK great, much appreciated! I'm open to your other suggestions also.
I'll review your advice and revise my investments Monday after open.
Which of your recommendations are ETF's or MF's?
Cash Plus offers 5 Van MM funds in addition to sweep acct.
For TIPS, what is ticker?
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by retiredjg »

ETF vs mutual fund? Doesn't matter at all. Your preference.

For the funds in question the ETF and mutual fund are different versions of the same stuff - the should have have the same tax-efficiency and the ERs should be so close as to not matter which you pick.

Vanguard offers two TIPS mutual funds. An intermediate term (VAIPX) and a short term (VTAPX). I would use intermediate term, but people upset by bond performance in 2023 might prefer the short term. Short term carries less interest rate risk but is expected to pay less as well.
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by Redbard »

OK got it.
Now to get my Excel file sorted out so I can easily track and rebalance across whole portfolio with 4 accounts.
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by Redbard »

retiredjg wrote: Sun Feb 11, 2024 8:09 am
Taxable 29.8% (includes $45k from the cash plus account)
?
Maybe I be stupid :oops: but I can't figure out how to move $45K from my Cash Plus sweep to my Brokerage account so I can buy funds.
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by retiredjg »

Redbard wrote: Sun Feb 11, 2024 1:27 pm
retiredjg wrote: Sun Feb 11, 2024 8:09 am
Taxable 29.8% (includes $45k from the cash plus account)
?
Maybe I be stupid :oops: but I can't figure out how to move $45K from my Cash Plus sweep to my Brokerage account so I can buy funds.
I have no idea either. The way you worded it, it sounds like Cash Plus could already be part of your brokerage account. Maybe rather than move, you just buy?
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Redbard
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by Redbard »

retiredjg wrote: Sun Feb 11, 2024 1:49 pm
Redbard wrote: Sun Feb 11, 2024 1:27 pm
retiredjg wrote: Sun Feb 11, 2024 8:09 am
Taxable 29.8% (includes $45k from the cash plus account)
?
Maybe I be stupid :oops: but I can't figure out how to move $45K from my Cash Plus sweep to my Brokerage account so I can buy funds.
I have no idea either. The way you worded it, it sounds like Cash Plus could already be part of your brokerage account. Maybe rather than move, you just buy?
Cash Plus has a sweep bin and limits funds you can purchase within it to these 5 Money Market Funds:
VCTXX, VMRXX, VMSXX, VYFXX & VUSXX (I already have 25k in this one).
Cash Plus acct is where I recently moved outside SS deposits earning diddly.
Brokerage acct I recently opened with other outside cash as I was advised to have a taxable acct in addition to tIRA & Roth.
As needed I will pull from Cash Plus to fund outside expenses (aka emergency fund).
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My Portfolio (Completed 2/13/24) Review?

Post by Redbard »

retiredjg wrote: Sun Feb 11, 2024 8:09 am Here's an idea based on a total portfolio of $218,188. There is $5k left in checking account. Rest is moved to investments.

Taxable - Vanguard Cash plus 11.5%
11.5% Cash of some kind (your preference - I'm not familiar with what they offer in Cash plus)

Taxable 29.8% (includes $45k from the cash plus account)
14.8% Total Stock Index
15% Total International Index

tIRA 35.9%
6.9% 500 Index
14% Total Bond Market
15% TIPs mutual fund

Roth IRA 22.8%
16.8% 500 index
6% Vanguard Developed Markets Index

This is very close to 60% stock, 30% bond, 10% cash with 35% of stocks (21% of portfolio) in international.

OK, thank you for you suggestions which I evaluated as likely appropriate for my situation.
I revised my portfolio per your advice, or very close to it.
(I did sell or exchange most everything previously in these accounts as noted in prior post. Hopefully that didn't create any problems).
Still need to add a little outside cash to brokerage to balance out AA within 1%.

My portfolio as of 2/13/24...$206,500.00
AA 60% Stock (65% US, 35% INT), 30% Bonds, 10% Cash


Recommended Ticker Actual
___
11.5% Cash Plus VUXSS 12.1%
0.0% CASH$ 0.00%
___
29.8% Taxable Brokerage 26.7%
14.8% Total Stock Index VTSAX 13.3%
15.0% Total Int Index VTIAX 13.3%
0.0% CASH$ 0.10%
___
35.9% tIRA 37.0%
6.9% 500 Index VFIAX 7.3%
7.0% Total Bond Market BND 7.2%
7.0% Total Bond Market VBTLX 7.3%
15.0% TIPs mutual fund VIPSX 15.3%
0.0% CASH$ 0.02%
___
22.8% Roth IRA 24.1%
16.8% 500 index VFIAX 17.4%
6.0% Van Dev Markets Index VTMGX 6.7%
0.0% CASH$ 0.01%
100% 100%
_________________________________________________________
38.5% US Stocks 38.0%
21.0% International Stocks 20.1%
29.0% Bond Fund 29.7%
11.5% Cash 12.2%
100% 100%
Last edited by Redbard on Sat Feb 17, 2024 5:32 pm, edited 3 times in total.
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Re: Advice Please - Need to complete my 3-Fund Portfolio

Post by mhadden1 »

Redbard wrote: Tue Feb 13, 2024 1:40 pm My portfolio as of 2/13/24...$206,500.00
AA 60% Stock (65% US, 35% INT), 30% Bonds, 10% Cash
Very classic portfolio. :beer
Retired 12/31/2015
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Re: My Portfolio (Completed 2/13/24) Review?

Post by retiredjg »

Good. I hope this works out for you and you find this portfolio easy to maintain and flexible to withdraw from. :happy
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