21 Year Old Portfolio

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CaliLivin
Posts: 4
Joined: Fri Jan 12, 2018 8:43 pm

21 Year Old Portfolio

Post by CaliLivin » Fri Jan 12, 2018 8:54 pm

Hi all,

First post here. :happy :)
I've been reading this forum regularly for around a year now. (So glad I found it.) I've made some moves recently to hopefully put myself in a position where the future will be good to me. I have been working for many years even though I am young, and saving money has always been a strong suit. I'm fortunate enough to have a public safety occupation in which I receive CalPERS (public employee retirement system) and a 457 Deferred Compensation program with it.

Below is my portfolio, I am really just looking to see what moves I can make to improve my position, and for feedback on what I should really be thinking about, since time is on my side.

Emergency funds: $15,000 High Yield Savings @ 1.3%
Debt: No Debt (fortunately)
Tax Filing Status: Single
Tax Rate: 22% Federal, 9.3% State
State of Residence: California
Age: 21

Total Portfolio – Right around $40,000.

Current retirement assets

$20,000 through Financial Advisor (Family Friend – No Commission)

20% iShares S&P Mid Cap (ETF) (IJH) (0.09%)
20% iShares S&P Small Cap (ETF) (IJR) (0.07%)
15% iShares S&P 500 Index (ETF) (IVV) (0.04%)
15% Eaton Vance Tax-Advantaged Dividend Inc Fund (EVT) (1.62%)
15% iShares Core MSCI EAFE (ETF) (IEFA) (0.08%)
15% iShares Core MSCI Emerging Markets (IEMG) (0.14%)


Nationwide 457 (Pre-tax) - ~$10,500
30% Legg Mason Clearbridge Small Cap Growth Fund (Class A) (SASMX) (1.24%)
25% Nationwide Mid Cap Market Index Fund (Class A) (GMXAX) (0.69%)
20% Nationwide S&P 500 Index Fund (Service Class) (GRMSX) (0.60%)
15% American Funds – Capital World Growth & Income (Class R3) (RWICX) (1.10%)
10% American Funds – EuroPacific Growth Fund (Class R3) (RERCX) (1.14%)
Total – 100%
No Company Match

CalPERS Retirement – ~$7,300
No control over these investments (unfortunately).


Roth IRA at Vanguard (Post Tax) - $3,000 (recently started)
100% Vanguard 500 Index Fund Investor Shares (VFINX) (0.13%)



Contributions

$750/Month Nationwide 457
~$440/Month CALPERS
$100/Month Vanguard Roth IRA


Funds available in 457

Nationwide Destination 2015 Fund
Nationwide Destination 2020 Fund
Nationwide Destination 2025 Fund
Nationwide Destination 2030 Fund
Nationwide Destination 2035 Fund
Nationwide Destination 2040 Fund
Nationwide Destination 2045 Fund
Nationwide Destination 2050 Fund
Nationwide Retirement Income Fund
Nationwide NMF Aggressive Fund
Nationwide NMF Moderately Aggressive Fund
Nationwide NMF Moderate Fund
Nationwide NMF Conservative Fund
International
American Century International Discovery Fund
American Funds – Capital World Growth & Income (r3)
American Funds – EuroPacific Growth Fund (r3)
Invesco International Growth Fund
Small Cap
American Beacon Small Cap Value Fund
JP Morgan Small Cap Value Fund
Oppenheimer Main St. Small Cap Fund
Legg Mason Clearbridge Small Cap Growth Fund
Mid Cap
American Century Vista (SM) Fund
Nationwide Mid Cap Market Index Fund
Goldman Sachs Mid Cap Value Fund
Large Cap
American Funds – The Growth Fund of America (r3)
Davis New York Venture Fund
Nationwide Large Cap Growth Portfolio
Nationwide S&P 500 Index Fund
Neuberger Berman Socially Responsive Fund
Oppenheimer Value Fund
T. Rowe Price Growth Stock Fund (r)
Invesco Growth & Income Fund
Bonds
American Funds – American High Income Funds (r3)
PIMCO Total Return Fund
Specialty
American Century Real Estate Fund
Blackrock Natural Resources Trust Portfolio
Fixed/Cash
Nationwide Money Market
Nationwide Fixed Account


I also have an HSA with ~$6,000 in it, which I will be looking into investing once I get a little more in it.
I plan to deposit as much as possible into the Roth IRA once I get my Tax Return $ back.

Questions:
1. I am simply trying to set myself up for success in the long run, and am looking for some feedback as to what I have done so far. Is there anything that you don’t support? Anything that I should do now while I am young? I’ve tried to set myself up long-term with the 457, CalPERS, and Roth IRA.

2. How does my Portfolio look now? I am 100% stocks as I see it, and know it is very risky. Should I be holding Bonds in some of my accounts regardless of how young I am? 10%? 20%?


Thank you for your time,
Dillon.

snarlyjack
Posts: 780
Joined: Fri Aug 28, 2015 12:44 pm
Location: Montana

Re: 21 Year Old Portfolio

Post by snarlyjack » Sat Jan 13, 2018 12:24 am

Hello Calilivin,

Welcome to Bogleheads.

You & I are about the same age (I' am 23 years old).
When I first started investing I read John Collins stock series.
Excellent information...it will answer all of your questions.
So 1st things 1st...read John Collins stock series then if
you have any more questions, post your questions or PM me.
(Be sure to read his letter to his daughter).
http://jlcollinsnh.com/2011/06/08/how-i ... to-wealth/

Enjoy...

http://jlcollinsnh.com/stock-series/

User avatar
in_reality
Posts: 4529
Joined: Fri Jul 12, 2013 6:13 am

Re: 21 Year Old Portfolio

Post by in_reality » Sat Jan 13, 2018 1:00 am

CaliLivin wrote:
Fri Jan 12, 2018 8:54 pm
Hi all,

First post here. :happy :)
I've been reading this forum regularly for around a year now. (So glad I found it.) I've made some moves recently to hopefully put myself in a position where the future will be good to me. I have been working for many years even though I am young, and saving money has always been a strong suit. I'm fortunate enough to have a public safety occupation in which I receive CalPERS (public employee retirement system) and a 457 Deferred Compensation program with it.

Below is my portfolio, I am really just looking to see what moves I can make to improve my position, and for feedback on what I should really be thinking about, since time is on my side.

Emergency funds: $15,000 High Yield Savings @ 1.3%
Debt: No Debt (fortunately)
Tax Filing Status: Single
Tax Rate: 22% Federal, 9.3% State
State of Residence: California
Age: 21

Total Portfolio – Right around $40,000.

Current retirement assets

$20,000 through Financial Advisor (Family Friend – No Commission)

20% iShares S&P Mid Cap (ETF) (IJH) (0.09%)
20% iShares S&P Small Cap (ETF) (IJR) (0.07%)
15% iShares S&P 500 Index (ETF) (IVV) (0.04%)
15% Eaton Vance Tax-Advantaged Dividend Inc Fund (EVT) (1.62%)
15% iShares Core MSCI EAFE (ETF) (IEFA) (0.08%)
15% iShares Core MSCI Emerging Markets (IEMG) (0.14%)


Nationwide 457 (Pre-tax) - ~$10,500
30% Legg Mason Clearbridge Small Cap Growth Fund (Class A) (SASMX) (1.24%)
25% Nationwide Mid Cap Market Index Fund (Class A) (GMXAX) (0.69%)
20% Nationwide S&P 500 Index Fund (Service Class) (GRMSX) (0.60%)
15% American Funds – Capital World Growth & Income (Class R3) (RWICX) (1.10%)
10% American Funds – EuroPacific Growth Fund (Class R3) (RERCX) (1.14%)
Total – 100%
No Company Match

CalPERS Retirement – ~$7,300
No control over these investments (unfortunately).


Roth IRA at Vanguard (Post Tax) - $3,000 (recently started)
100% Vanguard 500 Index Fund Investor Shares (VFINX) (0.13%)



Contributions

$750/Month Nationwide 457
~$440/Month CALPERS
$100/Month Vanguard Roth IRA


Funds available in 457

Nationwide Destination 2015 Fund
Nationwide Destination 2020 Fund
Nationwide Destination 2025 Fund
Nationwide Destination 2030 Fund
Nationwide Destination 2035 Fund
Nationwide Destination 2040 Fund
Nationwide Destination 2045 Fund
Nationwide Destination 2050 Fund
Nationwide Retirement Income Fund
Nationwide NMF Aggressive Fund
Nationwide NMF Moderately Aggressive Fund
Nationwide NMF Moderate Fund
Nationwide NMF Conservative Fund
International
American Century International Discovery Fund
American Funds – Capital World Growth & Income (r3)
American Funds – EuroPacific Growth Fund (r3)
Invesco International Growth Fund
Small Cap
American Beacon Small Cap Value Fund
JP Morgan Small Cap Value Fund
Oppenheimer Main St. Small Cap Fund
Legg Mason Clearbridge Small Cap Growth Fund
Mid Cap
American Century Vista (SM) Fund
Nationwide Mid Cap Market Index Fund
Goldman Sachs Mid Cap Value Fund
Large Cap
American Funds – The Growth Fund of America (r3)
Davis New York Venture Fund
Nationwide Large Cap Growth Portfolio
Nationwide S&P 500 Index Fund
Neuberger Berman Socially Responsive Fund
Oppenheimer Value Fund
T. Rowe Price Growth Stock Fund (r)
Invesco Growth & Income Fund
Bonds
American Funds – American High Income Funds (r3)
PIMCO Total Return Fund
Specialty
American Century Real Estate Fund
Blackrock Natural Resources Trust Portfolio
Fixed/Cash
Nationwide Money Market
Nationwide Fixed Account


I also have an HSA with ~$6,000 in it, which I will be looking into investing once I get a little more in it.
I plan to deposit as much as possible into the Roth IRA once I get my Tax Return $ back.

Questions:
1. I am simply trying to set myself up for success in the long run, and am looking for some feedback as to what I have done so far. Is there anything that you don’t support? Anything that I should do now while I am young? I’ve tried to set myself up long-term with the 457, CalPERS, and Roth IRA.

2. How does my Portfolio look now? I am 100% stocks as I see it, and know it is very risky. Should I be holding Bonds in some of my accounts regardless of how young I am? 10%? 20%?


Thank you for your time,
Dillon.
I think you can manage bettor for costs. For example, the cheapest fund in your Nationwide 457 is the S&P 500 (GRMSX) (0.60%). Why not put all your S&P 500 holdings there?

Doing so would mean you pay 0.54% more for it than through Financial Advisor and 0.47% more in your Roth IRA, but those accounts have access to cheap funds which could replace (SASMX) (1.24%), (RWICX) (1.10%), and (RERCX) (1.14%) and save you 0.75% or more I would guess.

Also, is the Tax-Advantaged Dividend Inc Fund (EVT) in taxable? It's a leveraged fund and should be throwing off lots of (qualified) dividends which have a "favorable" 15% rate, but wouldn't a normal fund which accrues captial gains be more efficient. I don't see the need for a leveraged dividend growth fund in taxable or is that account tax-sheltered?

As for the need for bonds, 10% is often used at your age for target retirement funds.

User avatar
BL
Posts: 8272
Joined: Sun Mar 01, 2009 2:28 pm

Re: 21 Year Old Portfolio

Post by BL » Sat Jan 13, 2018 1:01 am

You don't need a bunch of funds or ETFs to be well-diversified. Choose a few low-ER funds for the long run.

Do some reading here in Wiki (see Getting Started) and suggested books.
Here is a short one written just for new investors like you:
https://www.etf.com/docs/IfYouCan.pdf

Can't see ERs on available 401k funds. The S&P 500 and mid-cap are the good funds I see of the ones showing ERs.
Maybe one of your bond funds has low ER??

There is one very high-ER fund in your "managed" portfolio. After you have gained some more knowledge, I would suggest moving all to Vanguard or similar broker and purchase low-ER funds. The longer you wait, the more cost it will be to set it up with tax-efficient low-ER funds. Search for 3-fund portfolio in Wiki and read about it.

I believe it is not a good idea to use friends or connections as advisors. For one thing, the "divorce" is more painful.

User avatar
CyclingDuo
Posts: 1729
Joined: Fri Jan 06, 2017 9:07 am

Re: 21 Year Old Portfolio

Post by CyclingDuo » Sat Jan 13, 2018 10:36 am

CaliLivin wrote:
Fri Jan 12, 2018 8:54 pm

Questions:
1. I am simply trying to set myself up for success in the long run, and am looking for some feedback as to what I have done so far. Is there anything that you don’t support? Anything that I should do now while I am young? I’ve tried to set myself up long-term with the 457, CalPERS, and Roth IRA.

2. How does my Portfolio look now? I am 100% stocks as I see it, and know it is very risky. Should I be holding Bonds in some of my accounts regardless of how young I am? 10%? 20%?
Hey, Dillon. Kudos to you on getting started and having $40K already at your age!!!! :dollar :dollar :beer

I was searching online at CalPERS for their 457 plan options. Are there other options - or plans with different funds - than the one you are in with regard to your employer/participating agency? Or is the one you have invested in with the funds you list the only option for you available through CalPERS?

I agree with in_reality, that target funds based on your age can be used as asset allocation models. Most would have you in 10% bonds at your age (the Vanguard Target Retirement fund for you - the 2060 fund - currently has 10.02% in bonds).

https://investor.vanguard.com/mutual-fu ... rview/1691

I also agree that the funds in your 457 that have expense ratios north of 1% should be consolidated into lower cost funds within the plan, and find substitutes in your Roth IRA and taxable account that are lower cost. The main reason being, over the long term, the higher fund expenses will eat away at your returns causing you to have to save more than if they were in lower cost funds.

That being said - you are doing great. When many of us were your age, we had to pay front end/back end load charges to mutual funds that make your fees look like nothing. :)
"Everywhere is within walking distance if you have the time." ~ Steven Wright

CaliLivin
Posts: 4
Joined: Fri Jan 12, 2018 8:43 pm

Re: 21 Year Old Portfolio

Post by CaliLivin » Sat Jan 13, 2018 2:32 pm

in_reality wrote:
Sat Jan 13, 2018 1:00 am

I think you can manage bettor for costs. For example, the cheapest fund in your Nationwide 457 is the S&P 500 (GRMSX) (0.60%). Why not put all your S&P 500 holdings there? As far as the 457, isn't GRMSX the only S&P I hold? the others are small cap, mid cap, world growth and emerging markets.

Doing so would mean you pay 0.54% more for it than through Financial Advisor and 0.47% more in your Roth IRA, but those accounts have access to cheap funds which could replace (SASMX) (1.24%), (RWICX) (1.10%), and (RERCX) (1.14%) and save you 0.75% or more I would guess. I'm not sure I understand, the funds are cheaper through FA and Roth yes, but in the 457 i'm limited to funds I can choose.

Also, is the Tax-Advantaged Dividend Inc Fund (EVT) in taxable? It's a leveraged fund and should be throwing off lots of (qualified) dividends which have a "favorable" 15% rate, but wouldn't a normal fund which accrues captial gains be more efficient. I don't see the need for a leveraged dividend growth fund in taxable or is that account tax-sheltered? The Tax-Advantaged Dividend Inc Fund is in a taxable account, yes. It was suggested to me because the rest of my portfolio is growth/capital gains, and this one would balance it out so I received dividends as well as capital gains.

As for the need for bonds, 10% is often used at your age for target retirement funds. Thank you, I will look into adding the Vanguard total bond fund.
snarlyjack wrote:
Sat Jan 13, 2018 12:24 am
Hello Calilivin,

Welcome to Bogleheads.

You & I are about the same age (I' am 23 years old).
When I first started investing I read John Collins stock series.
Excellent information...it will answer all of your questions.
So 1st things 1st...read John Collins stock series then if
you have any more questions, post your questions or PM me.
(Be sure to read his letter to his daughter).
http://jlcollinsnh.com/2011/06/08/how-i ... to-wealth/

Enjoy...

http://jlcollinsnh.com/stock-series/
Thanks for the information, I loved the letter to his daughter, will delve into stock series soon. Cheers.
BL wrote:
Sat Jan 13, 2018 1:01 am
You don't need a bunch of funds or ETFs to be well-diversified. Choose a few low-ER funds for the long run.

Do some reading here in Wiki (see Getting Started) and suggested books.
Here is a short one written just for new investors like you:
https://www.etf.com/docs/IfYouCan.pdf

Can't see ERs on available 401k funds. The S&P 500 and mid-cap are the good funds I see of the ones showing ERs.
Maybe one of your bond funds has low ER??
Is a low ER always going to be better? or are there any higher ER funds that are smart investments?


There is one very high-ER fund in your "managed" portfolio. After you have gained some more knowledge, I would suggest moving all to Vanguard or similar broker and purchase low-ER funds. The longer you wait, the more cost it will be to set it up with tax-efficient low-ER funds. Search for 3-fund portfolio in Wiki and read about it. Does the cost of a higher ER balance out with high dividends it pays or no?

I believe it is not a good idea to use friends or connections as advisors. For one thing, the "divorce" is more painful. I have been advised on this since doing it, will need to move it away at some point.

CaliLivin
Posts: 4
Joined: Fri Jan 12, 2018 8:43 pm

Re: 21 Year Old Portfolio

Post by CaliLivin » Sat Jan 13, 2018 2:36 pm

CyclingDuo wrote:
Sat Jan 13, 2018 10:36 am

Hey, Dillon. Kudos to you on getting started and having $40K already at your age!!!! :dollar :dollar :beer

Thank you, sir!

I was searching online at CalPERS for their 457 plan options. Are there other options - or plans with different funds - than the one you are in with regard to your employer/participating agency? Or is the one you have invested in with the funds you list the only option for you available through CalPERS?

The two options are CalPERS itself has a 457, or Nationwide has one. Everyone I work with has advised against CalPERS, and reccomended nationwide as the best of the two options. I also feel it's smarter to not put all my eggs into the CalPERS basket. What do you think?

I agree with in_reality, that target funds based on your age can be used as asset allocation models. Most would have you in 10% bonds at your age (the Vanguard Target Retirement fund for you - the 2060 fund - currently has 10.02% in bonds).

https://investor.vanguard.com/mutual-fu ... rview/1691

I also agree that the funds in your 457 that have expense ratios north of 1% should be consolidated into lower cost funds within the plan, and find substitutes in your Roth IRA and taxable account that are lower cost. The main reason being, over the long term, the higher fund expenses will eat away at your returns causing you to have to save more than if they were in lower cost funds.

Are you suggesting that if I can find a cheaper fund in my Roth IRA that I put more of my monthly investments into the Roth instead of into the 457? And you think I need to be into fewer funds in my 457 that cost less?

That being said - you are doing great. When many of us were your age, we had to pay front end/back end load charges to mutual funds that make your fees look like nothing. :)

Thanks so much for the help!

User avatar
CyclingDuo
Posts: 1729
Joined: Fri Jan 06, 2017 9:07 am

Re: 21 Year Old Portfolio

Post by CyclingDuo » Sat Jan 13, 2018 3:19 pm

CaliLivin wrote:
Sat Jan 13, 2018 2:36 pm
CyclingDuo wrote:
Sat Jan 13, 2018 10:36 am

Hey, Dillon. Kudos to you on getting started and having $40K already at your age!!!! :dollar :dollar :beer

Thank you, sir!

I was searching online at CalPERS for their 457 plan options. Are there other options - or plans with different funds - than the one you are in with regard to your employer/participating agency? Or is the one you have invested in with the funds you list the only option for you available through CalPERS?

The two options are CalPERS itself has a 457, or Nationwide has one. Everyone I work with has advised against CalPERS, and reccomended nationwide as the best of the two options. I also feel it's smarter to not put all my eggs into the CalPERS basket. What do you think?

I don't know about that, I just wonder what the CalPERS 457 funds and their ER fees are to compare.

I agree with in_reality, that target funds based on your age can be used as asset allocation models. Most would have you in 10% bonds at your age (the Vanguard Target Retirement fund for you - the 2060 fund - currently has 10.02% in bonds).

https://investor.vanguard.com/mutual-fu ... rview/1691

I also agree that the funds in your 457 that have expense ratios north of 1% should be consolidated into lower cost funds within the plan, and find substitutes in your Roth IRA and taxable account that are lower cost. The main reason being, over the long term, the higher fund expenses will eat away at your returns causing you to have to save more than if they were in lower cost funds.

Are you suggesting that if I can find a cheaper fund in my Roth IRA that I put more of my monthly investments into the Roth instead of into the 457? And you think I need to be into fewer funds in my 457 that cost less?


No. We were suggesting that if your asset allocation of your overall portfolio (the entire ball of wax, or $40K) was divided up into something similar to the percentages like the Vanguard Target Fund 2060 (age appropriate for you) where 10% is in bonds; 54% is in US Stocks; and 36% is in International Stocks - that you could use the Nationwide S&P 500 fund for the majority of the US portion (54%) of your portfolio as it has the lowest ER fee. Move the small cap/mid cap (known as the extended market portions of a total stock fund) to less expensive ER fee areas (Roth and your iShares Accounts). So the iShares currently in S&P 500, and the Vanguard S&P 500 in your Roth - could be represented in the Nationwide 457 instead.

How to approximate the Total Stock Market Fund Directions are here: https://www.bogleheads.org/wiki/Approxi ... ock_market

In your case, you would like to have 54% in the US stock index. That link shows you that for the portion of that 56% that needs to be in the extended market (small cap and or midcap), you could use iShares IJH and iShares IJR. Or you could use Vanguard Extended Market Fund (VEXMX). Or you could use Vanguard Mid Cap (VIMSX) and Vanguard Small Cap (NAESX).

Divide 54% - which would be your US stocks, like this to get the Total Stock Market:

81% Vanguard 500 Index Fund (VFINX)
4% Vanguard Mid-Cap Index Fund (VIMSX)
15% Vanguard Small-Cap Index Fund (NAESX)

Or divide the 54% that should be US stocks for the Total Stock Market like this:

83% Vanguard 500 Index Fund (VFINX)
11% iShares S&P MidCap 400 Index (IJH)
6% iShares S&P SmallCap 600 Index (IJR)

Or even easier, like this:

81% Vanguard 500 Index Fund (VFINX)
19% Vanguard Extended Market Index Fund (VEXMX)

Then the 36% you have in International could be housed in your Taxable iShares account and or your Roth Account (you could put your bonds in the Roth account as well).

You don't have to have the same asset allocation model as the Vanguard Target Fund 2060. It's known as The Three Fund Portfolio, or Second Grader's Portfolio, or one of the Lazy Portfolios by nickname. It's not the only asset allocation model, but it is simple, easy to maintain and one of the most often suggested asset allocation models. US Total Stock Market, International Total Stock Market, and Total Bond Fund. You can read about it here:

https://www.bogleheads.org/wiki/Three-fund_portfolio

https://www.marketwatch.com/lazyportfol ... er-starter

https://www.marketwatch.com/lazyportfolio

https://obliviousinvestor.com/8-lazy-etf-portfolios/

The point being, to save money on higher ER fees - use the lowest cost fund in the Nationwide family of funds you have to fill it out with, and use lower expense funds in your other accounts to round out your asset allocation.

I would still like to see the CalPERS 457 fund options and their expenses to compare, but perhaps your colleagues have already informed you their funds are even higher in cost. I don't know.

Even though the Nationwide S&P 500 is the lowest cost fund within that 457 plan, I still worry that due to the percentage of allocation over the years - that fund will represent your largest holding since the allocation model states that you need about 81-83% of your 54% in US Stocks to be in that fund. Years from now, if you have $100K in that fund alone, you will pay $600 a year for the Expense Ratio Fee (.60%). Compare that to a lower ER fee of say .04% for the Vanguard S&P 500 fund which for every $100K invested, you would pay only $40 a year. Not a huge major deal breaker, but it is what it is.

Trust us when we say we have all seen people paying much higher ER fees than .60% based on what they have posted on these forums. I think if we knew there was a S&P 500 or Total Stock Market fund in the CalPERS 457 plan that say had an expense ratio of .04% - .11% we would be able to advise you better. Since we don't know - perhaps the Nationwide fees are lower and you are set.



That being said - you are doing great. When many of us were your age, we had to pay front end/back end load charges to mutual funds that make your fees look like nothing. :)

Thanks so much for the help!
Last edited by CyclingDuo on Sat Jan 13, 2018 10:16 pm, edited 1 time in total.
"Everywhere is within walking distance if you have the time." ~ Steven Wright

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in_reality
Posts: 4529
Joined: Fri Jul 12, 2013 6:13 am

Re: 21 Year Old Portfolio

Post by in_reality » Sat Jan 13, 2018 8:08 pm

CaliLivin wrote:
Sat Jan 13, 2018 2:32 pm
in_reality wrote:
Sat Jan 13, 2018 1:00 am

I think you can manage bettor for costs. For example, the cheapest fund in your Nationwide 457 is the S&P 500 (GRMSX) (0.60%). Why not put all your S&P 500 holdings there? As far as the 457, isn't GRMSX the only S&P I hold? the others are small cap, mid cap, world growth and emerging markets.

Doing so would mean you pay 0.54% more for it than through Financial Advisor and 0.47% more in your Roth IRA, but those accounts have access to cheap funds which could replace (SASMX) (1.24%), (RWICX) (1.10%), and (RERCX) (1.14%) and save you 0.75% or more I would guess. I'm not sure I understand, the funds are cheaper through FA and Roth yes, but in the 457 i'm limited to funds I can choose.
Ok, see below. Anyway, the point to to view your accounts together. In general, choose the best fund(s) in the 457 where you are limited and then fill out the rest of your portfolio in the accounts where you have more choice. For example ...

Current retirement assets

$20,000 through Financial Advisor (Family Friend – No Commission)

20% iShares S&P Mid Cap (ETF) (IJH) (0.09%)
20% iShares S&P Small Cap (ETF) (IJR) (0.07%)
15% iShares S&P 500 Index (ETF) (IVV) (0.04%) <--- hold this in the 457
15% Eaton Vance Tax-Advantaged Dividend Inc Fund (EVT) (1.62%)
15% iShares Core MSCI EAFE (ETF) (IEFA) (0.08%)
15% iShares Core MSCI Emerging Markets (IEMG) (0.14%)


Nationwide 457 (Pre-tax) - ~$10,500
30% Legg Mason Clearbridge Small Cap Growth Fund (Class A) (SASMX) (1.24%) <--- hold a cheaper equivalent in the Financial Advisor account
25% Nationwide Mid Cap Market Index Fund (Class A) (GMXAX) (0.69%)
20% Nationwide S&P 500 Index Fund (Service Class) (GRMSX) (0.60%)
15% American Funds – Capital World Growth & Income (Class R3) (RWICX) (1.10%) <--- hold a cheaper equivalent in the Roth IRA
10% American Funds – EuroPacific Growth Fund (Class R3) (RERCX) (1.14%) <--- hold a cheaper equivalent in the Roth IRA
Total – 100%
No Company Match

CalPERS Retirement – ~$7,300
No control over these investments (unfortunately).


Roth IRA at Vanguard (Post Tax) - $3,000 (recently started)
100% Vanguard 500 Index Fund Investor Shares (VFINX) (0.13%) <---- hold this in the 457



Contributions

$750/Month Nationwide 457
~$440/Month CALPERS
$100/Month Vanguard Roth IRA


CaliLivin wrote:
Sat Jan 13, 2018 2:32 pm
in_reality wrote:
Sat Jan 13, 2018 1:00 am
Also, is the Tax-Advantaged Dividend Inc Fund (EVT) in taxable? It's a leveraged fund and should be throwing off lots of (qualified) dividends which have a "favorable" 15% rate, but wouldn't a normal fund which accrues captial gains be more efficient. I don't see the need for a leveraged dividend growth fund in taxable or is that account tax-sheltered? The Tax-Advantaged Dividend Inc Fund is in a taxable account, yes. It was suggested to me because the rest of my portfolio is growth/capital gains, and this one would balance it out so I received dividends as well as capital gains.

I see. IEFA, IEMG, IJH, and IJR are index funds and will already hold both growth and value (which generally is where the dividends are found).

The American funds in the 457 do probably lean growth. As least they did when I owned them. You can look them up in Morningstar.

Also, about EVT - it makes me a little nervous. It's a closed end fund that uses leverage (hence the high ER). I own some with a 1.7%ER for bonds (because I am forced to hold a lot of cash thanks to my wife and overall want to keep up with inflation) so I don't hate the things, but you have to understand the price will fluctuate more since it's determined by investor demand in EVT and sentiment in downturns might get ugly when traders (not bogleheads who just hold) is thinking risk-off.

Also, leverage means that in bad downturns there could be a leverage call. Bonds don't fluctuate that much so that's why I am willing to use it, but stocks ... you don't want a fund to have to sell holdings cheap that you borrowed high to purchase. EVT does hold bonds to mitigate that risk I think. Anyway, it's a complicated holding.

Then as CyclingDuo wrote, you could end up too much in US stocks by only using the S&P 500 in the Nationwide 457. In that case, I think RERCX in the Nationwide 457 works best. RWICX has US stocks too, so it's effectively more expensive since you can get US stocks at 0.60% already. If you are worried that RERCX is too much growth, you could choose an international value fund in the Roth IRA or perhaps iShares account.

Finally, you should know the Calpers allocation to help you understand what your overall AA will be. That is the most important thing.

By the way, is the Calpers a 457. If so, there is the option to open a self-directed account at Schwab and use their low cost ETFs. It's $50/year and 0.38% (Calpers adminstrative fee), so probably you won't need it anytime soon. Still, SCHF (international developed large/mid caps) is 0.06%, so at some point adding 0.38% and $50/year to that might be a better option and 1+% in your 457.

Some people say no international is needed. In a global economy with US valuations high though, I prefer diversification myself and recommend it to you as returns from international stocks are currently forecast as being higher (expected higher returns don't necessarily turn into realized ones -- remember no guarantees).


http://www.calpers-sip.com/PDF_document ... erview.pdf

CaliLivin
Posts: 4
Joined: Fri Jan 12, 2018 8:43 pm

Re: 21 Year Old Portfolio

Post by CaliLivin » Mon Jan 15, 2018 9:24 pm

I really appreciate all the input. It makes way more sense to view the portfolio as a whole, and I do see what you all are saying about holding the lowest cost in the 457 where funds are limited.

Thank you to all that have commented for your time, it seems there are some changes needing to be made! :D

-Dillon

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