Help with Personal Investments, thanks for LOOKING!

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carlosantaana
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Help with Personal Investments, thanks for LOOKING!

Post by carlosantaana » Sat Apr 14, 2018 6:06 pm

Hey everybody I'm new here, so Id love to get some advice or critique on my investment portfolio, Thanks!

Emergency funds: six months of expenses
Debt: ( car loan @ 1.9%)
Tax Filing Status: (Single)
Tax Rate: 25% Federal, 9.3% State
State of Residence: CA
Age: 28
Desired Asset allocation: 95% stocks / 5% bonds
Desired International allocation: 35% of stocks

Current retirement assets

Taxable
15% (VMFFX) Vanguard Federal Money Market Fund 0.11%
20% (VIGAX) Vanguard Growth Index Fund Admiral Shares 0.06%
10% (VMRGX) Vanguard Morgan Growth Fund Investor Shares 0.38%
20% (VHDYX) Vanguard High Dividend Yield Index Fund Investor Shares 0.15% (FOR DIVIDENDS)
25% (VWIGX) Vanguard International Growth Fund Investor Shares 0.45% (FOR INTERNATIONAL EXPOSURE)
10% (VWELX) Vanguard Wellington Fund Investor Shares 0.25% (FOR BONDS/INCOME/BALANCED FUND)

TAX-ADVANTAGE ACCOUNTS
1st 401k : Company match: 8%
2% MassMutual Premier High Yield Fund (MPHZX) (0.54%)
15% American Funds EuroPacific Growth Fund (REREGX) (0.50%)
20% American Funds New World Fund (RNGWX) (0.64%)
10% Brown Capital Management Small Company Fund (BCSIX) (1.28%)
25% Harbor Capital Appreciation Fund (HACAX) (0.65%)
25% Vanguard Institutional Index Fund (VINIX) (0.04%)
5% Vanguard Mid Capitalization Index Fund (VIMAX) (0.05%)
3% BlackRock Health Sciences Opportunities Fund (SHSSX) (0.89)%

2nd 401k Company match: 2%

25% American Funds EuroPacific Growth (REREX) (0.85%
10% MFS International Equity (MEIEX) /(0.7%)
10% Dodge & Cox Stock fund (DODGX) (0.52%)
10% Vanguard Wellinton Admiral (VWENX) (0.17%)
10% VANGUARD EXTENDEND MARKET INDEX FUND (VIEIX) (0.06%)
10% SSgA S&P 500 Index N (SVSPX) (0.16%)
25% PRIMECAP ODYSSET GROWTH (POGRX) (0.66%)

1. Is this a reasonable portfolio/plan?
2. Any suggestions?

delamer
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Re: Help with Personal Investments, thanks for LOOKING!

Post by delamer » Sat Apr 14, 2018 6:18 pm

Your portfolio is more complicated than necessary. Highly recommend that you read this 16 page guide: http://www.etf.com/docs/IfYouCan.pdf

Your best bet is to get rid of all the non-Vanguard funds in your 401(k)s and then find the one best (lowest ER) international option available. You are paying too much in fees now.

In taxable, is there any significant difference between the Growth Index fund and the Growth fund?

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Tyler Aspect
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Re: Help with Personal Investments, thanks for LOOKING!

Post by Tyler Aspect » Sat Apr 14, 2018 7:23 pm

Young investors should have minimum of 20% investments in bonds. No valid bond options are shown in the retirement fund options, and that is the most obvious lacking point.

The taxable account has a collection of different strategies, but lacked the traditional broad market US stock index fund, and international broad market stock index fund.

I can see some growth tilt in the taxable, but no value tilt in the tax deferred account to balance it out.
Past result does not predict future performance. Mentioned investments may lose money. Contents are presented "AS IS" and any implied suitability for a particular purpose are disclaimed.

billfromct
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Re: Help with Personal Investments, thanks for LOOKING!

Post by billfromct » Sat Apr 14, 2018 8:26 pm

If I was 28 years old with 35 to 40 years until retirement, I would be 100% stocks in my retirement accounts until 20-25 years before retirement. It appears you are 5%-6% bonds in your retirement accounts now. Over the long term (10-20 years), stocks should (will?) out perform bonds.

Others will say during stock market down turns, you can rebalance from your bond allocation into your lower valued stock investments.

From 1940 to 2017, the S&P 500 or its equivalent before 1957, had a positive return in 75% of those 77 years. Of course, past performance is no guarantee of future returns.

I will start SS & RMDs next year & I'm about 61% stocks/39% fixed income in my retirement accounts. Through my 30s, I was 100% stocks in my retirement accounts. Of course you must have the intestinal fortitude not to sell your stocks during the next stock market correction or bear market.

You can have your fixed income allocation in your taxable account should you need to get at the money.

Also, how do you contribute to two 401k accounts? Do have two jobs?

bill

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Sandtrap
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Re: Help with Personal Investments, thanks for LOOKING!

Post by Sandtrap » Sat Apr 14, 2018 9:30 pm

Welcome.

It would be a good idea to simplify things.
1. Eliminate or minimize fund overlap.
2. Eliminate or minimize redundancy between funds. IE: you have Wellington which is a balanced fund and then you have single funds.
3. Minimize the number of funds across the board.
4. Minimize expense ratios. IE: if one fund has lower costs and does the same thing as another, then . . . .
5. Funds with less than 5% of the total do not move the "needle" much so consolidate.
6. Realize that 3-4 properly placed funds can do the work of everything, at cheaper costs.

Look at the entire portfolio comprehensively.
Pay attention to fund placement for best tax advantage.

Read:
Funding Priority (what do I do first?)
https://www.bogleheads.org/wiki/Priori ... vestments
Tax Efficient Fund Placement
https://www.bogleheads.org/wiki/Tax-ef ... _placement
Asset allocation in multiple accounts
https://www.bogleheads.org/wiki/Asset ... accounts

Here are some tools to keep track of the changes.
Funding Priority (what do I do first?)
https://www.bogleheads.org/wiki/Priori ... vestments
Tax Efficient Fund Placement
https://www.bogleheads.org/wiki/Tax-ef ... _placement
Asset allocation in multiple accounts
https://www.bogleheads.org/wiki/Asset ... accounts

Have you done this?
Define General Investment Goals and Objectives (what is your plan?)
https://www.bogleheads.org/wiki/Invest ... statement

Can you list funds available to you in those accounts?
There may be better one's. Some that you have are pricey.
You can edit your original post to include them under "funds available but not chosen" under 401k etc.

aloha
j :D

Miriam2
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Re: Help with Personal Investments, thanks for LOOKING!

Post by Miriam2 » Sun Apr 15, 2018 9:03 pm

carlosantaana wrote: Taxable
15% (VMFFX) Vanguard Federal Money Market Fund 0.11%
20% (VIGAX) Vanguard Growth Index Fund Admiral Shares 0.06%
10% (VMRGX) Vanguard Morgan Growth Fund Investor Shares 0.38%
20% (VHDYX) Vanguard High Dividend Yield Index Fund Investor Shares 0.15% (FOR DIVIDENDS)
25% (VWIGX) Vanguard International Growth Fund Investor Shares 0.45% (FOR INTERNATIONAL EXPOSURE)
10% (VWELX) Vanguard Wellington Fund Investor Shares 0.25% (FOR BONDS/INCOME/BALANCED FUND)

2nd 401k Company match: 2%
25% American Funds EuroPacific Growth (REREX) (0.85%
10% MFS International Equity (MEIEX) /(0.7%)
10% Dodge & Cox Stock fund (DODGX) (0.52%)
10% Vanguard Wellinton Admiral (VWENX) (0.17%)
10% VANGUARD EXTENDEND MARKET INDEX FUND (VIEIX) (0.06%)
10% SSgA S&P 500 Index N (SVSPX) (0.16%)
25% PRIMECAP ODYSSET GROWTH (POGRX) (0.66%)
You don't need a balanced fund like Wellington if you are creating a portfolio of stock funds and bond funds. Also, Wellington is not tax efficient for your taxable account.

I understand using Wellington "for bonds," but it complicates a portfolio and is less utilitarian than using a good 100% bond fund. With a bond fund, you can more easily set your asset allocation with your stock funds. With Wellington, you have a stock/bond package all together. To sell bonds, you have to sell its stock portion also. To buy bonds, you have to buy its stock portion also.

I have owned Wellington for over 20 years :D (and I'll never sell it) but back in the old days I used it as my core retirement account fund around which I built my portfolio with additional stock funds. The downside to this is now more apparent to me since I know more about diversification (Wellington is not very diversified) and rebalancing (see above issue with rebalancing). The value of Wellington really seems to be as a reliable retirement fund of 60/40 asset allocation, rather than part of a young, working person's wealth-building portfolio.

On the other hand, I understand why you may not want to sell it. Since it sometimes closes to new investors, you might want to keep it, just not put too much in it in creating your portfolio. Wellington is something special 8-)

Lafder
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Re: Help with Personal Investments, thanks for LOOKING!

Post by Lafder » Mon Apr 16, 2018 9:29 am

Go back and edit your post so each holding is % of total portfolio, not per account.

This will allow you to more easily see the relative size of each holding to the other.

Which will make it much easier to calculate your overall asset allocation and know what to change where to be at an asset allocation you choose.

It will also show you how tiny some holdings are and make it easier to eliminate them.

lafder

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ajw360
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Re: Help with Personal Investments, thanks for LOOKING!

Post by ajw360 » Mon Apr 16, 2018 10:15 am

Lafder wrote:
Mon Apr 16, 2018 9:29 am
Go back and edit your post so each holding is % of total portfolio, not per account.

This will allow you to more easily see the relative size of each holding to the other.

Which will make it much easier to calculate your overall asset allocation and know what to change where to be at an asset allocation you choose.

It will also show you how tiny some holdings are and make it easier to eliminate them.

lafder
+1 - Your percentages should add up to 100% for your total portfolio instead of per account. You should also add to your original post what other funds are available in your 401k accounts. That information will help us to give you more specific advice. There is definitely room for consolidation and improvement.

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bottlecap
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Re: Help with Personal Investments, thanks for LOOKING!

Post by bottlecap » Mon Apr 16, 2018 10:46 am

Suggestions:

Pick an asset allocation based on your need and ability to take risk.

Then reduce to about 3 or 4 funds based on your asset allocation.

Then come back with questions.

Good luck,

JT

PFInterest
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Re: Help with Personal Investments, thanks for LOOKING!

Post by PFInterest » Mon Apr 16, 2018 10:50 am

1) no.
2) yes but please update what options you have in your retirement plans.

inbox788
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Re: Help with Personal Investments, thanks for LOOKING!

Post by inbox788 » Wed Apr 18, 2018 3:08 am

Taxable
100% (VIGAX) Vanguard Growth Index Fund Admiral Shares 0.06%

TAX-ADVANTAGE ACCOUNTS
75% Vanguard Institutional Index Fund (VINIX) (0.04%)
25% Vanguard Mid Capitalization Index Fund (VIMAX) (0.05%)

2nd 401k Company match: 2%

100% SSgA S&P 500 Index N (SVSPX) (0.16%)
Agree with others that say it's way too complicated and expense fees are much higher than passive funds. A 3-fund portfolio is all you need and stick to expense fees below 0.1%. What is your Taxable Broker? Are there no lower fee funds in your 2nd 401k? Since you're young and just starting off, consider 100% US equities until you find a decent cost international and bond fund to invest in. Open up a new taxable brokerage and/or transfer from your current one if need be.

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

TwstdSista
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Re: Help with Personal Investments, thanks for LOOKING!

Post by TwstdSista » Wed Apr 18, 2018 4:35 am

Too many funds, and any ERs over 0.20% are generally too expensive.

carlosantaana
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Re: Help with Personal Investments, thanks for LOOKING!

Post by carlosantaana » Sun Apr 22, 2018 10:24 pm

Thank you every one for their input. I truly appreciate it!
I see some of you suggest focusing on a 3-4 funds, also that the expense ratio is less than 0.20%, in addition I see that you suggest 100% equity since Im still young.
TAXABLE
100% (VIGAX) Vanguard Growth Index Fund Admiral Shares 0.06%

TAX ADVANTAGE
Here are my options for my 1st 401k :
EQUITY/STOCK ER
AMERICAN EUROPACIFIC GR R4 0.85%
BLACKROCK GLOBAL ALLOCATION FD 0.53%
DFA US TARGETED VAL CL INSTL 0.37%
DODGE & COX STOCK FUND 0.52%
MFS INSTL:INTL EQUITY 0.71%
PRIMECAP ODYSSEY GROWTH FUND 0.67%
STATE STREET S&P 500 INDEX 0.02%
VANGUARD EXTEND MARKET INDX FD0.06%

VANGUARD WELLINGTON FUND 0.16%
VOYA SMALL CAP OPPORTUNITIES I 1.12%

BOND/FIXED INCOME
GOLDMAN SACHS HIGH YIELD INSTL 0.74%
* PIMCO TOTAL RETURN PORT. INSTL 0.51%
VANGUARD INFLATION-PROTECTED 0.07%
VANGUARD TOTAL BOND MKT 0.04%
  • My thoughts for 1st 401k: 100% EQUITY, all international Equity has ER greater than 0.5%, What should I do to gain international Exposure?
    - 95% STATE STREET S&P 500 INDEX 0.02%
    - 5% VANGUARD EXTEND MARKET INDX FD 0.06%


Fund options in 2nd 401k

EQUITY STOCK ER
Putnam Equity Income Fund 0.56%
Vanguard Institutional Index Fund 0.04%
Harbor Capital Appreciation Fund 0.62%
MFS Mid Cap Value Fund 0.75%
Vanguard Mid Capitalization Index Fund 0.06%
Vanguard Small Cap Index Fund 0.06%
Brown Capital Management Small Company Fund 1.09%
Vanguard Total International Stock Index Fund 0.11%
American Funds EuroPacific Growth Fund 0.5%
American Funds New World Fund 0.64%
Vanguard Real Estate Index Fund 0.12%
BlackRock Health Sciences Opportunities Fund 0.83%

BOND/FIXED INCOME
Metropolitan West Total Return Bond Fund 0.38%
Vanguard Total Bond Market Index Fund 0.05%
MassMutual Premier High Yield Fund 0.57%

ALLOCATION FUNDS
Vanguard Institutional Target Retirement 2055 Fund 0.09%
  • My thoughts for 2nd 401k: 100% EQUITY
    - 60% Vanguard Institutional Index Fund 0.04%
    - 40% Vanguard Total International Stock Index Fund 0.11%

    QUESTIONS:
    1) what is your thoughts on a funds that charges Higher ER, but shows a consistent history of HIGHER RETURNS? Isnt It worth it to pay higher ER to get Higher returns. IE: PRIMECAP ODYSSEY GROWTH FUND (POGRX) 0.67% ER, Brown Capital Mgmt Small Co Inv (BCSIX) 1.09% ER

    2) What are your thoughts on my new choices for 1st & 2nd 401k???

    Thanks everyone for your input!!!

radiowave
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Re: Help with Personal Investments, thanks for LOOKING!

Post by radiowave » Sun Apr 22, 2018 10:38 pm

Overall good simplification strategy. Consider:

- Vanguard total stock market (VTSAX) admiral share ER .04% in taxable instead of the growth mutual fund
- the bolded choices in 1st 401k seem reasonable
- consider adding in the 2nd 401k Vanguard Mid Capitalization Index Fund 0.06% that will give you the entire US stock market

I'm of the opinion at your age, bonds are not needed. Yes if you had some in your tax-advantaged account you can rebalance, but then again, you can just buy and hold and weather out any stock market storm over the next 2 decades. Agree with above posts, the closer you get to retirement, you need to consider more bonds to provide safety and stability.
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Miriam2
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Re: Help with Personal Investments, thanks for LOOKING!

Post by Miriam2 » Mon Apr 23, 2018 9:20 pm

carlosantaana wrote: Here are my options for my 1st 401k :

AMERICAN EUROPACIFIC GR R4 0.85%
BLACKROCK GLOBAL ALLOCATION FD 0.53%
DFA US TARGETED VAL CL INSTL 0.37%
DODGE & COX STOCK FUND 0.52%
MFS INSTL:INTL EQUITY 0.71%
PRIMECAP ODYSSEY GROWTH FUND 0.67%
STATE STREET S&P 500 INDEX 0.02%
VANGUARD EXTEND MARKET INDX FD0.06%

VANGUARD WELLINGTON FUND 0.16%
VOYA SMALL CAP OPPORTUNITIES I 1.12%

QUESTIONS:
1) what are your thoughts on a fund that charges Higher ER, but shows a consistent history of HIGHER RETURNS? Isn't It worth it to pay higher ER to get Higher returns?
ie: PRIMECAP ODYSSEY GROWTH FUND (POGRX) 0.67% ER = consider, see below
Brown Capital Mgmt Small Co Inv (BCSIX) 1.09% ER = NO, Mr. Brown doesn't need your ER 1.09% money
Primecap Odyssey Growth, as well as Odyssey Aggressive Growth (POAGX) and Odyssey Stock fund (POSKX), were recently discussed in this thread: www.bogleheads.org/forum/viewtopic.php?f=1&t=247505

If you think you want it, buy some now before it closes. Consider it your race horse fund. :wink:
But your core funds would probably be the State Street S&P 500 fund for large cap stocks and the Vanguard Extended Market Index fund to complement it with mid-and-small cap funds.

However, other Bogleheads would have to advise you on creating your portfolio with these funds in conjunction with your other accounts, looking at your portfolio as a whole.

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