Portfolio Analysis needed!

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User avatar
Starchild
Posts: 70
Joined: Fri Feb 09, 2018 9:01 am

Portfolio Analysis needed!

Post by Starchild » Sun Apr 22, 2018 12:58 pm

Thanks again for all the great help. What a great community. This has been a great experience for a newbie. Please review my situation. I followed the template as best as I can. Starchild

Emergency Funds/Cash on hand: App. $900,000 (recent house sale, looking to relocate in the next year or two). In Cap One money market earning 1.5%
Debt: Mortgage $173,000. 3.5% Interest. Nothing else.
Status: Married, one child
Tax Rate: Not sure, probably high, live in New Jersey
Age: 43
Desired AA: considering 80/20
Desired Int’l: considering 20%
Taxable: Cap One Investment account (soon to be E-Trade)
$155,000, App. 70/30, although I need to sell the bonds for tax purposes (mistake on my part)
His 401K: App. 25K (part time job)
Her 401K: App. 30K (part time job)
Income, mainly self-employed (him), wife works part time.
Trad. IRA (death rollover pension) JP Morgan Brokerage. App. $190,000 Currently, app. 85/15 ETF index funds.
Trad IRA (death rollover pension) JP Morgan Managed Brokerage App $55,000 app. 90/10. (Leaving it managed for now, considering self-managing it in future) Brokerage Fee: 1%.
RMD on both IRA’s goes to 529 for child.
Goals: Looking to purchase a new home app $550-600K in cash, sell current home (app. 400K value) be debt free, and continue investing with income and remaining savings, while leaving an undetermined emergency fund in money market. Not looking to make a killing, but do the right thing with assets.
Questions/Comments:
1. Looks like I will have to tweak the IRA to move around bonds that I purchased in February in taxable. However, Bogleheads suggested making this an IRA instead.
2. The JP Morgan advisor suggested PONAX (Pimco Fixed Income) for fixed income, which is what I have invested in. I’m new to bonds and am ok with this but would be open to other suggestions. Considering VBMFX.
3. Taxable account is a mix of low-cost Index ETF’s, some individual stocks, the bonds, and recently added VTSMX as something I can contribute to on a regular basis. I use VEA and IEMG for International. It probably could use tweaking.
4. Started investing about 12 years ago, individual stocks that have luckily done well. Sold some to add to indexing, but comfortable leaving a portion in taxable account. left it somewhat dormant until recently with my parent’s passing and needed to handle the estate. So will say, new to investing.

retiredjg
Posts: 32911
Joined: Thu Jan 10, 2008 12:56 pm

Re: Portfolio Analysis needed!

Post by retiredjg » Sun Apr 22, 2018 1:33 pm

It's kind of difficult to do a "portfolio analysis" without knowing what is in the portfolio, or what is available for the 401k plans, or how much money you add to your accounts....and so on. :D

I know the "asking portfolio questions" format can be a lot of work, but all the information asked for is actually needed in order to give you reliable assistance.

If there is something you don't know how to do or answer, just ask and someone will help you figure it out.

User avatar
Starchild
Posts: 70
Joined: Fri Feb 09, 2018 9:01 am

Re: Portfolio Analysis needed!

Post by Starchild » Sun Apr 22, 2018 2:09 pm

retiredjg wrote:
Sun Apr 22, 2018 1:33 pm
It's kind of difficult to do a "portfolio analysis" without knowing what is in the portfolio, or what is available for the 401k plans, or how much money you add to your accounts....and so on. :D

I know the "asking portfolio questions" format can be a lot of work, but all the information asked for is actually needed in order to give you reliable assistance.

If there is something you don't know how to do or answer, just ask and someone will help you figure it out.
I'm not about the 401K. It's an AXA account I can find out about. Here's the breakdown as best I can:
Brokerage IRA (190K)
Large Cap (41%):
SPY (most)
VYM (considering consolidating to SPY/FIXED)
IWF
AMZN
Small-cap/Mid-Cap (18%):
SLY
VO
INT’L (14%):
VEA
EFAV
EM (6%)
IEMG
FIXED 16%
PONAX
REIT (3%):
VNQ
Cash: 2%
Managed IRA (55K):
Large-Cap: 55%
VOO
XLK
GAFFX
IWF
XLI
XLU
XLB
GLOBAL 18%
OANIX
EM 5%
EEM
VWO
Small-Cap/Mid 14%
IWN
VO
FIXED 5%
PIMIX
Cash 2%
Taxable (sorry for no %) (155K):
Large-Cap (30K):
SPY (20K)
DIA (5K)
QQQ (5K)
Total Stock
VTSMX (5K)
Mid-Cap (10K):
VO
Small-Cap (10K):
SLY
Global (7K):
VEA
EM (3K):
IEMG
FIXED (50K)
PONAX
Individual Stocks:
APPL (13K) Had it forever
MSFT (3.5K)
BRKB (5K)
V (5K)
AMZN (8K)
GOOG (5K)
HON (3K)

User avatar
BL
Posts: 8094
Joined: Sun Mar 01, 2009 2:28 pm

Re: Portfolio Analysis needed!

Post by BL » Sun Apr 22, 2018 2:22 pm

Starchild wrote:
Sun Apr 22, 2018 12:58 pm
Thanks again for all the great help. What a great community. This has been a great experience for a newbie. Please review my situation. I followed the template as best as I can. Starchild

Emergency Funds/Cash on hand: App. $900,000 (recent house sale, looking to relocate in the next year or two). In Cap One money market earning 1.5%
Debt: Mortgage $173,000. 3.5% Interest. Nothing else.
Status: Married, one child
Tax Rate: Not sure, probably high, live in New Jersey
Age: 43
Desired AA: considering 80/20
Desired Int’l: considering 20%
Taxable: Cap One Investment account (soon to be E-Trade)
$155,000, App. 70/30, although I need to sell the bonds for tax purposes (mistake on my part)
His 401K: App. 25K (part time job)
Her 401K: App. 30K (part time job)
Income, mainly self-employed (him), wife works part time.
Trad. IRA (death rollover pension) JP Morgan Brokerage. App. $190,000 Currently, app. 85/15 ETF index funds.
Trad IRA (death rollover pension) JP Morgan Managed Brokerage App $55,000 app. 90/10. (Leaving it managed for now, considering self-managing it in future) Brokerage Fee: 1%.
You might want to get rid of 1% fee. Vanguard has a low-cost advisory, PAS, at 0.3%/year, and they wouldn't try to sell you high-ER funds. Some people try them for a year to get set up, then cancel and manage on their own. Call a low-cost brokerage such as Vanguard or Fidelity and have them pull it to them. There are low-ER index funds available there or elsewhere. If you want simple, a single Life Strategy Aggressive (20% bonds) is an example of a Vanguard single balanced fund, of which they have quite a few. You could go heavy on bonds here with a Target Date Income (70% bonds). The Wiki has info on a 3-fund portfolio at various brokerages.
https://www.bogleheads.org/wiki/Three-fund_portfolio

RMD on both IRA’s goes to 529 for child. Great idea!
Goals: Looking to purchase a new home app $550-600K in cash, sell current home (app. 400K value) be debt free, and continue investing with income and remaining savings, while leaving an undetermined emergency fund in money market. Not looking to make a killing, but do the right thing with assets.
Questions/Comments:
1. Looks like I will have to tweak the IRA to move around bonds that I purchased in February in taxable. However, Bogleheads suggested making this an IRA instead.
Also consider I-bonds for tax-deferred and state-exempt interest:
https://treasurydirect.gov/indiv/indiv.htm

2. The JP Morgan advisor suggested PONAX (Pimco Fixed Income) for fixed income, which is what I have invested in. I’m new to bonds and am ok with this but would be open to other suggestions. Considering VBMFX. VBTLX is total bond Admiral for 10k minimum purchase, which is lower ER (0.05%)
What is the ER on Pimco fund?

3. Taxable account is a mix of low-cost Index ETF’s, some individual stocks, the bonds, and recently added VTSMX as something I can contribute to on a regular basis. I use VEA and IEMG for International. It probably could use tweaking.
4. Started investing about 12 years ago, individual stocks that have luckily done well. Sold some to add to indexing, but comfortable leaving a portion in taxable account. left it somewhat dormant until recently with my parent’s passing and needed to handle the estate. So will say, new to investing.
How do they compare to set-and-forget Total stock market or S&P 500?

User avatar
Starchild
Posts: 70
Joined: Fri Feb 09, 2018 9:01 am

Re: Portfolio Analysis needed!

Post by Starchild » Sun Apr 22, 2018 4:51 pm

BL wrote:
Sun Apr 22, 2018 2:22 pm
Starchild wrote:
Sun Apr 22, 2018 12:58 pm
Thanks again for all the great help. What a great community. This has been a great experience for a newbie. Please review my situation. I followed the template as best as I can. Starchild

Emergency Funds/Cash on hand: App. $900,000 (recent house sale, looking to relocate in the next year or two). In Cap One money market earning 1.5%
Debt: Mortgage $173,000. 3.5% Interest. Nothing else.
Status: Married, one child
Tax Rate: Not sure, probably high, live in New Jersey
Age: 43
Desired AA: considering 80/20
Desired Int’l: considering 20%
Taxable: Cap One Investment account (soon to be E-Trade)
$155,000, App. 70/30, although I need to sell the bonds for tax purposes (mistake on my part)
His 401K: App. 25K (part time job)
Her 401K: App. 30K (part time job)
Income, mainly self-employed (him), wife works part time.
Trad. IRA (death rollover pension) JP Morgan Brokerage. App. $190,000 Currently, app. 85/15 ETF index funds.
Trad IRA (death rollover pension) JP Morgan Managed Brokerage App $55,000 app. 90/10. (Leaving it managed for now, considering self-managing it in future) Brokerage Fee: 1%.
You might want to get rid of 1% fee. Vanguard has a low-cost advisory, PAS, at 0.3%/year, and they wouldn't try to sell you high-ER funds. Some people try them for a year to get set up, then cancel and manage on their own. Call a low-cost brokerage such as Vanguard or Fidelity and have them pull it to them. There are low-ER index funds available there or elsewhere. If you want simple, a single Life Strategy Aggressive (20% bonds) is an example of a Vanguard single balanced fund, of which they have quite a few. You could go heavy on bonds here with a Target Date Income (70% bonds). The Wiki has info on a 3-fund portfolio at various brokerages.
https://www.bogleheads.org/wiki/Three-fund_portfolio

RMD on both IRA’s goes to 529 for child. Great idea!
Goals: Looking to purchase a new home app $550-600K in cash, sell current home (app. 400K value) be debt free, and continue investing with income and remaining savings, while leaving an undetermined emergency fund in money market. Not looking to make a killing, but do the right thing with assets.
Questions/Comments:
1. Looks like I will have to tweak the IRA to move around bonds that I purchased in February in taxable. However, Bogleheads suggested making this an IRA instead.
Also consider I-bonds for tax-deferred and state-exempt interest:
https://treasurydirect.gov/indiv/indiv.htm

2. The JP Morgan advisor suggested PONAX (Pimco Fixed Income) for fixed income, which is what I have invested in. I’m new to bonds and am ok with this but would be open to other suggestions. Considering VBMFX. VBTLX is total bond Admiral for 10k minimum purchase, which is lower ER (0.05%)
What is the ER on Pimco fund?

3. Taxable account is a mix of low-cost Index ETF’s, some individual stocks, the bonds, and recently added VTSMX as something I can contribute to on a regular basis. I use VEA and IEMG for International. It probably could use tweaking.
4. Started investing about 12 years ago, individual stocks that have luckily done well. Sold some to add to indexing, but comfortable leaving a portion in taxable account. left it somewhat dormant until recently with my parent’s passing and needed to handle the estate. So will say, new to investing.
How do they compare to set-and-forget Total stock market or S&P 500?
I was thinking the same with the advisor. Give him at least a year to see how he performs. It's currently not a very large IRA, so it's not a big hit. He was good to set it up, and a nice fellow, but he's not really doing any better than I am.

I will look into those bond/fixed ideas! The Pimco fund is expensive (I think it's .90), but it's performance has been, and is currently impressive. The yield is currently 5.09% and hasn't taken as much of a hit as total bond index.

Thank you so much!

User avatar
nedsaid
Posts: 9691
Joined: Fri Nov 23, 2012 12:33 pm

Re: Portfolio Analysis needed!

Post by nedsaid » Sun Apr 22, 2018 8:08 pm

Starchild wrote:
Sun Apr 22, 2018 12:58 pm
Thanks again for all the great help. What a great community. This has been a great experience for a newbie. Please review my situation. I followed the template as best as I can. Starchild

Emergency Funds/Cash on hand: App. $900,000 (recent house sale, looking to relocate in the next year or two). In Cap One money market earning 1.5%
Debt: Mortgage $173,000. 3.5% Interest. Nothing else.
Status: Married, one child
Tax Rate: Not sure, probably high, live in New Jersey
Age: 43
Desired AA: considering 80/20
Desired Int’l: considering 20%

Nedsaid: I think the asset allocation you are considered is a good one. My suggestion would be more conservative, that is 70% stocks/30% bonds. I would do an International allocation to stocks of at least 20%. I am at about 30% myself. Vanguard recommends 40% of stocks in International.

At 43, you are still pretty young as an investor but to me age 40 is a milestone at which an investor should start de-risking. In early 2000, I was at 94% stocks and 6% bonds and cash. For various reasons, I brought my stock allocation down to 80% just before the tech crash. I was 40 years old at the time. Starting in 1999, with a new job and a great 403(b) plan, I put my new monies in at 60% stocks and 40% bonds. This worked my stocks down to about 70%, where I stayed for years. Now I have about 65% stocks at age 58.


Taxable: Cap One Investment account (soon to be E-Trade)
$155,000, App. 70/30, although I need to sell the bonds for tax purposes (mistake on my part)
His 401K: App. 25K (part time job)
Her 401K: App. 30K (part time job)
Income, mainly self-employed (him), wife works part time.
Trad. IRA (death rollover pension) JP Morgan Brokerage. App. $190,000 Currently, app. 85/15 ETF index funds.
Trad IRA (death rollover pension) JP Morgan Managed Brokerage App $55,000 app. 90/10. (Leaving it managed for now, considering self-managing it in future) Brokerage Fee: 1%.
RMD on both IRA’s goes to 529 for child.
Goals: Looking to purchase a new home app $550-600K in cash, sell current home (app. 400K value) be debt free, and continue investing with income and remaining savings, while leaving an undetermined emergency fund in money market. Not looking to make a killing, but do the right thing with assets.
Questions/Comments:
1. Looks like I will have to tweak the IRA to move around bonds that I purchased in February in taxable. However, Bogleheads suggested making this an IRA instead.

Nedsaid: Standard Boglehead advice is to make your taxable accounts stock heavy and your tax deferred accounts more bond heavy. Certainly REITs and TIPS, which are tax inefficient investments, belong in tax deferred accounts.

To me, a lot depends upon the relative size of your taxable accounts vs. your tax deferred accounts. If your taxable and tax deferred accounts are both relatively large in size, use the standard advice to maximize tax efficiency. But don't overdo this, if you make your retirement accounts too bond heavy, you will doom those accounts to low returns.

In my personal situation, most of my investments are in tax deferred retirement accounts so I invest my retirement accounts for maximum return. It is pretty simple to me, I want to invest my retirement accounts fairly aggressively, thus lots of stocks, so that I can maximize my paycheck in retirement. Pretty much its do I want a bigger paycheck in retirement or a smaller one?


2. The JP Morgan advisor suggested PONAX (Pimco Fixed Income) for fixed income, which is what I have invested in. I’m new to bonds and am ok with this but would be open to other suggestions. Considering VBMFX.

Nedsaid: Pimco, even without the famed Bill Gross, is an excellent bond house. A Pimco bond fund would be a good choice. I don't know the particular fund you mention but the fund family has a good track record with bonds.


3. Taxable account is a mix of low-cost Index ETF’s, some individual stocks, the bonds, and recently added VTSMX as something I can contribute to on a regular basis. I use VEA and IEMG for International. It probably could use tweaking.

Nedsaid: You will get the lectures on the evils of individual stocks here. I can't say much because I own individual stocks myself: 18 in a brokerage IRA and 4 in DRIP plans. What I have found is that over time I have just about matched the US Total Stock Market Index over 15 years. I have been either lucky or good, research says that individuals who pick their own stocks trail the averages by 4 percentage points a year. To me the biggest disadvantage is the back strain from hauling those annual reports to the recycle bin!

4. Started investing about 12 years ago, individual stocks that have luckily done well. Sold some to add to indexing, but comfortable leaving a portion in taxable account. left it somewhat dormant until recently with my parent’s passing and needed to handle the estate. So will say, new to investing.
A fool and his money are good for business.

User avatar
Starchild
Posts: 70
Joined: Fri Feb 09, 2018 9:01 am

Re: Portfolio Analysis needed!

Post by Starchild » Sun Apr 22, 2018 8:54 pm

nedsaid wrote:
Sun Apr 22, 2018 8:08 pm
Starchild wrote:
Sun Apr 22, 2018 12:58 pm
Thanks again for all the great help. What a great community. This has been a great experience for a newbie. Please review my situation. I followed the template as best as I can. Starchild

Emergency Funds/Cash on hand: App. $900,000 (recent house sale, looking to relocate in the next year or two). In Cap One money market earning 1.5%
Debt: Mortgage $173,000. 3.5% Interest. Nothing else.
Status: Married, one child
Tax Rate: Not sure, probably high, live in New Jersey
Age: 43
Desired AA: considering 80/20
Desired Int’l: considering 20%

Nedsaid: I think the asset allocation you are considered is a good one. My suggestion would be more conservative, that is 70% stocks/30% bonds. I would do an International allocation to stocks of at least 20%. I am at about 30% myself. Vanguard recommends 40% of stocks in International.

At 43, you are still pretty young as an investor but to me age 40 is a milestone at which an investor should start de-risking. In early 2000, I was at 94% stocks and 6% bonds and cash. For various reasons, I brought my stock allocation down to 80% just before the tech crash. I was 40 years old at the time. Starting in 1999, with a new job and a great 403(b) plan, I put my new monies in at 60% stocks and 40% bonds. This worked my stocks down to about 70%, where I stayed for years. Now I have about 65% stocks at age 58.


Taxable: Cap One Investment account (soon to be E-Trade)
$155,000, App. 70/30, although I need to sell the bonds for tax purposes (mistake on my part)
His 401K: App. 25K (part time job)
Her 401K: App. 30K (part time job)
Income, mainly self-employed (him), wife works part time.
Trad. IRA (death rollover pension) JP Morgan Brokerage. App. $190,000 Currently, app. 85/15 ETF index funds.
Trad IRA (death rollover pension) JP Morgan Managed Brokerage App $55,000 app. 90/10. (Leaving it managed for now, considering self-managing it in future) Brokerage Fee: 1%.
RMD on both IRA’s goes to 529 for child.
Goals: Looking to purchase a new home app $550-600K in cash, sell current home (app. 400K value) be debt free, and continue investing with income and remaining savings, while leaving an undetermined emergency fund in money market. Not looking to make a killing, but do the right thing with assets.
Questions/Comments:
1. Looks like I will have to tweak the IRA to move around bonds that I purchased in February in taxable. However, Bogleheads suggested making this an IRA instead.

Nedsaid: Standard Boglehead advice is to make your taxable accounts stock heavy and your tax deferred accounts more bond heavy. Certainly REITs and TIPS, which are tax inefficient investments, belong in tax deferred accounts.

To me, a lot depends upon the relative size of your taxable accounts vs. your tax deferred accounts. If your taxable and tax deferred accounts are both relatively large in size, use the standard advice to maximize tax efficiency. But don't overdo this, if you make your retirement accounts too bond heavy, you will doom those accounts to low returns.

In my personal situation, most of my investments are in tax deferred retirement accounts so I invest my retirement accounts for maximum return. It is pretty simple to me, I want to invest my retirement accounts fairly aggressively, thus lots of stocks, so that I can maximize my paycheck in retirement. Pretty much its do I want a bigger paycheck in retirement or a smaller one?


2. The JP Morgan advisor suggested PONAX (Pimco Fixed Income) for fixed income, which is what I have invested in. I’m new to bonds and am ok with this but would be open to other suggestions. Considering VBMFX.

Nedsaid: Pimco, even without the famed Bill Gross, is an excellent bond house. A Pimco bond fund would be a good choice. I don't know the particular fund you mention but the fund family has a good track record with bonds.


3. Taxable account is a mix of low-cost Index ETF’s, some individual stocks, the bonds, and recently added VTSMX as something I can contribute to on a regular basis. I use VEA and IEMG for International. It probably could use tweaking.

Nedsaid: You will get the lectures on the evils of individual stocks here. I can't say much because I own individual stocks myself: 18 in a brokerage IRA and 4 in DRIP plans. What I have found is that over time I have just about matched the US Total Stock Market Index over 15 years. I have been either lucky or good, research says that individuals who pick their own stocks trail the averages by 4 percentage points a year. To me the biggest disadvantage is the back strain from hauling those annual reports to the recycle bin!

4. Started investing about 12 years ago, individual stocks that have luckily done well. Sold some to add to indexing, but comfortable leaving a portion in taxable account. left it somewhat dormant until recently with my parent’s passing and needed to handle the estate. So will say, new to investing.
Amazing! Thank you! I agree that individual stocks give some diversity in its own way, During the last correction, the only thing that held up was AMZN. Things can turn downward, of course, but I bought them because I believe in their business model. The thing about de-risking now is that bonds are getting hit with rates. Guaranteed loses in the short term. But I'm tired of fiddling, and just want this set up.

2pedals
Posts: 447
Joined: Wed Dec 31, 2014 12:31 pm

Re: Portfolio Analysis needed!

Post by 2pedals » Sun Apr 22, 2018 9:18 pm

Starchild wrote:
Sun Apr 22, 2018 2:09 pm
retiredjg wrote:
Sun Apr 22, 2018 1:33 pm
It's kind of difficult to do a "portfolio analysis" without knowing what is in the portfolio, or what is available for the 401k plans, or how much money you add to your accounts....and so on. :D

I know the "asking portfolio questions" format can be a lot of work, but all the information asked for is actually needed in order to give you reliable assistance.

If there is something you don't know how to do or answer, just ask and someone will help you figure it out.
I'm not about the 401K. It's an AXA account I can find out about. Here's the breakdown as best I can:
Brokerage IRA (190K)
Large Cap (41%):
SPY (most)
VYM (considering consolidating to SPY/FIXED)
IWF
AMZN
Small-cap/Mid-Cap (18%):
SLY
VO
INT’L (14%):
VEA
EFAV
EM (6%)
IEMG
FIXED 16%
PONAX
REIT (3%):
VNQ
Cash: 2%
Managed IRA (55K):
Large-Cap: 55%
VOO
XLK
GAFFX
IWF
XLI
XLU
XLB
GLOBAL 18%
OANIX
EM 5%
EEM
VWO
Small-Cap/Mid 14%
IWN
VO
FIXED 5%
PIMIX
Cash 2%
Taxable (sorry for no %) (155K):
Large-Cap (30K):
SPY (20K)
DIA (5K)
QQQ (5K)
Total Stock
VTSMX (5K)
Mid-Cap (10K):
VO
Small-Cap (10K):
SLY
Global (7K):
VEA
EM (3K):
IEMG
FIXED (50K)
PONAX
Individual Stocks:
APPL (13K) Had it forever
MSFT (3.5K)
BRKB (5K)
V (5K)
AMZN (8K)
GOOG (5K)
HON (3K)
Unless you are trying to tilt your portfolio the 3 fund portfolio would be my recommendation. The number of funds that are in the above portfolio makes things much more difficult. The selected above portfolio has much overlap. The core stocks funds should be in the total stock market index and total international stock index funds. US Intermediate term bond funds to add stability. It may take some time to simplify your portfolio. Wouldn't you rather fewer funds to deal with? It makes my life simple when adding and selling funds. I set my asset allocation stock and bonds and work within my target +-10%.

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

User avatar
Starchild
Posts: 70
Joined: Fri Feb 09, 2018 9:01 am

Re: Portfolio Analysis needed!

Post by Starchild » Mon Apr 23, 2018 10:39 am

2pedals wrote:
Sun Apr 22, 2018 9:18 pm
Starchild wrote:
Sun Apr 22, 2018 2:09 pm
retiredjg wrote:
Sun Apr 22, 2018 1:33 pm
It's kind of difficult to do a "portfolio analysis" without knowing what is in the portfolio, or what is available for the 401k plans, or how much money you add to your accounts....and so on. :D

I know the "asking portfolio questions" format can be a lot of work, but all the information asked for is actually needed in order to give you reliable assistance.

If there is something you don't know how to do or answer, just ask and someone will help you figure it out.
I'm not about the 401K. It's an AXA account I can find out about. Here's the breakdown as best I can:
Brokerage IRA (190K)
Large Cap (41%):
SPY (most)
VYM (considering consolidating to SPY/FIXED)
IWF
AMZN
Small-cap/Mid-Cap (18%):
SLY
VO
INT’L (14%):
VEA
EFAV
EM (6%)
IEMG
FIXED 16%
PONAX
REIT (3%):
VNQ
Cash: 2%
Managed IRA (55K):
Large-Cap: 55%
VOO
XLK
GAFFX
IWF
XLI
XLU
XLB
GLOBAL 18%
OANIX
EM 5%
EEM
VWO
Small-Cap/Mid 14%
IWN
VO
FIXED 5%
PIMIX
Cash 2%
Taxable (sorry for no %) (155K):
Large-Cap (30K):
SPY (20K)
DIA (5K)
QQQ (5K)
Total Stock
VTSMX (5K)
Mid-Cap (10K):
VO
Small-Cap (10K):
SLY
Global (7K):
VEA
EM (3K):
IEMG
FIXED (50K)
PONAX
Individual Stocks:
APPL (13K) Had it forever
MSFT (3.5K)
BRKB (5K)
V (5K)
AMZN (8K)
GOOG (5K)
HON (3K)
Unless you are trying to tilt your portfolio the 3 fund portfolio would be my recommendation. The number of funds that are in the above portfolio makes things much more difficult. The selected above portfolio has much overlap. The core stocks funds should be in the total stock market index and total international stock index funds. US Intermediate term bond funds to add stability. It may take some time to simplify your portfolio. Wouldn't you rather fewer funds to deal with? It makes my life simple when adding and selling funds. I set my asset allocation stock and bonds and work within my target +-10%.

https://www.bogleheads.org/wiki/Three-fund_portfolio
Thank you! I've considered this, and even added the total stock index just recently as something I can add to on a regular basis. It seems the ETF version cover similar ground, but yes, more maintenance.

User avatar
nedsaid
Posts: 9691
Joined: Fri Nov 23, 2012 12:33 pm

Re: Portfolio Analysis needed!

Post by nedsaid » Mon Apr 23, 2018 11:08 am

Starchild post_id=3894117 time=1524448443 user_id=130757]

Amazing! Thank you! I agree that individual stocks give some diversity in its own way, During the last correction, the only thing that held up was AMZN. Things can turn downward, of course, but I bought them because I believe in their business model. The thing about de-risking now is that bonds are getting hit with rates. Guaranteed loses in the short term. But I'm tired of fiddling, and just want this set up.

What I would recommend is that you write an Investment Policy Statement. This is an exercise in putting your beliefs about investing on paper and sketching out the outlines of an investment plan. Morningstar has a good worksheet that you can access here:

http://im.morningstar.com/im/InvestPolicyWS.pdf


As the late Yogi Berra would say, "If you don't know where you are going, how will you know when you get there?" So pretty much I am saying to get a plan, Stan.

Once you have a good investment philosophy and the outlines of a plan, it makes setting up the investments relatively easy. You need to take care of the big picture first, then the detail will be easy. Too many people get too caught up in the detail and fret over whether they should buy Fund X or Fund.

The three fund portfolio: US Total Stock Market Index, Total International Stock Index, and US Total Bond Market Index are really all you need. Pretty much you need to pick your stock vs. bond allocation and how much of your stocks you want in International. With 3 funds, portfolio construction is pretty easy.

The next decision is if you want to tilt away from the broad market indexes. For example, do you want a Small/Value tilt? Do you want a REIT fund? Do you want TIPS? For myself, I have tilted my portfolio a bit towards smaller stocks and towards Value. Most Bogleheads do not employ portfolio tilts. What I have found is that my portfolio tilts have caused me to trail the benchmarks by about 0.50% a year or so a year, this has happened because Value has been out of favor since the 2008-2009 financial crisis. So the 3 fund portfolio is looking pretty darned good right now.

As far as individual stocks, I have posted on this topic extensively. On average, investors who try picking stocks trail the averages by about 4% a year. A big reason for this is behavioral, performance chasing and impatience are two big culprits. I have about matched the US Total Stock Market Index with my stocks, not bad when you consider they are mostly large Value stocks, Value has been trailing the broad market. The thing is, if you want a blue-chip portfolio, the S&P 500 will give that to you. Even the US Total Stock Market Index is a mega-cap blue-chip portfolio, the 100 largest stocks are just over 50% of the index.Individual stocks are only about 12%-13% of my retirement portfolio. My biggest holding is the US Total Stock Market Index. Indexing is a very good investing strategy.
A fool and his money are good for business.

feehater
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Re: Portfolio Analysis needed!

Post by feehater » Mon Apr 23, 2018 11:38 am

This is not related to the asset allocation but to the placement of your savings. Are you aware of all your tax-advantaged retirement savings options, and are you maxing them out? Both you and your wife could be contributing 11k a year to Roth IRAs, or if your income is above the limit, a Backdoor Roth IRA. Additionally, self-employed people have a whole range of options, the best of which might be a solo-401k that would allow you to put 18.5k a year + 20% of your business earnings into either a traditional or Roth account. If your taxes are high, this could lead to significant savings on your current taxes. If your taxes turn out to be not that high, then you can get the money into Roth accounts and never pay taxes on the earnings. Just a thought!

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Starchild
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Re: Portfolio Analysis needed!

Post by Starchild » Mon Apr 23, 2018 3:30 pm

nedsaid wrote:
Mon Apr 23, 2018 11:08 am
Starchild post_id=3894117 time=1524448443 user_id=130757]

Amazing! Thank you! I agree that individual stocks give some diversity in its own way, During the last correction, the only thing that held up was AMZN. Things can turn downward, of course, but I bought them because I believe in their business model. The thing about de-risking now is that bonds are getting hit with rates. Guaranteed loses in the short term. But I'm tired of fiddling, and just want this set up.

What I would recommend is that you write an Investment Policy Statement. This is an exercise in putting your beliefs about investing on paper and sketching out the outlines of an investment plan. Morningstar has a good worksheet that you can access here:

http://im.morningstar.com/im/InvestPolicyWS.pdf


As the late Yogi Berra would say, "If you don't know where you are going, how will you know when you get there?" So pretty much I am saying to get a plan, Stan.

Once you have a good investment philosophy and the outlines of a plan, it makes setting up the investments relatively easy. You need to take care of the big picture first, then the detail will be easy. Too many people get too caught up in the detail and fret over whether they should buy Fund X or Fund.

The three fund portfolio: US Total Stock Market Index, Total International Stock Index, and US Total Bond Market Index are really all you need. Pretty much you need to pick your stock vs. bond allocation and how much of your stocks you want in International. With 3 funds, portfolio construction is pretty easy.

The next decision is if you want to tilt away from the broad market indexes. For example, do you want a Small/Value tilt? Do you want a REIT fund? Do you want TIPS? For myself, I have tilted my portfolio a bit towards smaller stocks and towards Value. Most Bogleheads do not employ portfolio tilts. What I have found is that my portfolio tilts have caused me to trail the benchmarks by about 0.50% a year or so a year, this has happened because Value has been out of favor since the 2008-2009 financial crisis. So the 3 fund portfolio is looking pretty darned good right now.

As far as individual stocks, I have posted on this topic extensively. On average, investors who try picking stocks trail the averages by about 4% a year. A big reason for this is behavioral, performance chasing and impatience are two big culprits. I have about matched the US Total Stock Market Index with my stocks, not bad when you consider they are mostly large Value stocks, Value has been trailing the broad market. The thing is, if you want a blue-chip portfolio, the S&P 500 will give that to you. Even the US Total Stock Market Index is a mega-cap blue-chip portfolio, the 100 largest stocks are just over 50% of the index.Individual stocks are only about 12%-13% of my retirement portfolio. My biggest holding is the US Total Stock Market Index. Indexing is a very good investing strategy.
Thanks again! Other than simplicity, esp with reallocating, what would be the advantage of the 3-Fund as opposed to breaking it into ETF's? In the first place, selling everything off to repurchase would be a job, and since they're mutual funds, they're less liquid in case of emergency.

I'd like to stream line it some more, but maybe SPY/VO/SLY/VEA/IEMG/PONAX (or other fixed) would cover the same ground, with similar costs? Maybe?

As for the individual, I'm comfortable with them as a separate allocation. It's hard to argue their performance. AAPL, for one, has absolutely destroyed SPY.

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nedsaid
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Re: Portfolio Analysis needed!

Post by nedsaid » Mon Apr 23, 2018 11:06 pm

Starchild wrote:
Mon Apr 23, 2018 3:30 pm

Thanks again! Other than simplicity, esp with reallocating, what would be the advantage of the 3-Fund as opposed to breaking it into ETF's? In the first place, selling everything off to repurchase would be a job, and since they're mutual funds, they're less liquid in case of emergency.

I'd like to stream line it some more, but maybe SPY/VO/SLY/VEA/IEMG/PONAX (or other fixed) would cover the same ground, with similar costs? Maybe?

As for the individual, I'm comfortable with them as a separate allocation. It's hard to argue their performance. AAPL, for one, has absolutely destroyed SPY.
Actually, I own both Index Mutual Funds and Index based ETFs. The advantage mutual funds have is automatic reinvestment with no fees and the ability to buy and sell with no fees. The disadvantage is that mutual funds are priced after the end of the trading date whereas ETFs can be traded in real time. Though ETF purchases and reinvestments can be done without fees, in many cases you could pay fees for both. For example, my brokerage uses the Pershing platform, ETF reinvestment has a $1.00 fee unless the ETF is within a retirement account, in which case reinvestment is free. Both Index Mutual Funds and Index ETFs are excellent investment vehicles and are suitable for long term investment. Why any individual investor would day trade an index is just beyond me.

If I were putting together a stock market portfolio using Index ETF's, I would look hard at the S&P Indexes like the S&P 500, the S&P Mid-Cap 400, and the S&P Small-Cap 600. S&P requires that companies have earnings to be included in its indexes and also has other quality criteria. So if you have good index construction to begin with, the poor quality companies are already screened out. The Russell 2000 gets criticism because there is less rigor in screening out the junk. I probably would not recommend a Micro-Cap Index mainly because of issues of traders front running the index, Morningstar says a Small-Cap Index will work just as well.

As far as individual stocks, you will have an occasional disaster. I had Lucent blow up on me and I bought Nortel to take its place, which also blew up. AIG blew up on me as well. The losses were really painful. So yes, Apple kicked rear in relation to the index but any stock you pick could go the other way too. So there is a relatively high single stock risk that you take with individual stocks. A stock blowing up within an index fund will hardly cause a ripple.

I am old fashioned, I suppose. I learned stock picking but I also had diversified mutual funds as well. I started indexing in earnest back in 1999.
A fool and his money are good for business.

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Starchild
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Re: Portfolio Analysis needed!

Post by Starchild » Tue Apr 24, 2018 4:33 am

nedsaid wrote:
Mon Apr 23, 2018 11:06 pm
Starchild wrote:
Mon Apr 23, 2018 3:30 pm

Thanks again! Other than simplicity, esp with reallocating, what would be the advantage of the 3-Fund as opposed to breaking it into ETF's? In the first place, selling everything off to repurchase would be a job, and since they're mutual funds, they're less liquid in case of emergency.

I'd like to stream line it some more, but maybe SPY/VO/SLY/VEA/IEMG/PONAX (or other fixed) would cover the same ground, with similar costs? Maybe?

As for the individual, I'm comfortable with them as a separate allocation. It's hard to argue their performance. AAPL, for one, has absolutely destroyed SPY.
Actually, I own both Index Mutual Funds and Index based ETFs. The advantage mutual funds have is automatic reinvestment with no fees and the ability to buy and sell with no fees. The disadvantage is that mutual funds are priced after the end of the trading date whereas ETFs can be traded in real time. Though ETF purchases and reinvestments can be done without fees, in many cases you could pay fees for both. For example, my brokerage uses the Pershing platform, ETF reinvestment has a $1.00 fee unless the ETF is within a retirement account, in which case reinvestment is free. Both Index Mutual Funds and Index ETFs are excellent investment vehicles and are suitable for long term investment. Why any individual investor would day trade an index is just beyond me.

If I were putting together a stock market portfolio using Index ETF's, I would look hard at the S&P Indexes like the S&P 500, the S&P Mid-Cap 400, and the S&P Small-Cap 600. S&P requires that companies have earnings to be included in its indexes and also has other quality criteria. So if you have good index construction to begin with, the poor quality companies are already screened out. The Russell 2000 gets criticism because there is less rigor in screening out the junk. I probably would not recommend a Micro-Cap Index mainly because of issues of traders front running the index, Morningstar says a Small-Cap Index will work just as well.

As far as individual stocks, you will have an occasional disaster. I had Lucent blow up on me and I bought Nortel to take its place, which also blew up. AIG blew up on me as well. The losses were really painful. So yes, Apple kicked rear in relation to the index but any stock you pick could go the other way too. So there is a relatively high single stock risk that you take with individual stocks. A stock blowing up within an index fund will hardly cause a ripple.

I am old fashioned, I suppose. I learned stock picking but I also had diversified mutual funds as well. I started indexing in earnest back in 1999.
Well put and agree. Unfortunately, Cap One charges $20 per mutual fund trade compared to $5 for ETF/Stock. Not the end of the world because I don't trade that much, but still.

I will add, that for individual stocks, yes, there won't be much fret in one company going bust, but I would imagine if Amazon or Apple went bankrupt one day, it would be far worse than a ripple. I'm going to keep those investments small. Thanks!

2pedals
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Re: Portfolio Analysis needed!

Post by 2pedals » Tue Apr 24, 2018 7:14 pm

Starchild wrote:
Tue Apr 24, 2018 4:33 am
..... Unfortunately, Cap One charges $20 per mutual fund trade compared to $5 for ETF/Stock. Not the end of the world because I don't trade that much, but still.
This is why I believe in filling a portfolio of mutual funds transaction free through my brokerage account.

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nedsaid
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Re: Portfolio Analysis needed!

Post by nedsaid » Tue Apr 24, 2018 9:48 pm

Starchild wrote:
Tue Apr 24, 2018 4:33 am


Well put and agree. Unfortunately, Cap One charges $20 per mutual fund trade compared to $5 for ETF/Stock. Not the end of the world because I don't trade that much, but still.

I will add, that for individual stocks, yes, there won't be much fret in one company going bust, but I would imagine if Amazon or Apple went bankrupt one day, it would be far worse than a ripple. I'm going to keep those investments small. Thanks!
There are brokerages that offer a mutual fund marketplace, some funds you can buy with no transaction charge and others that require a transaction fee. Fidelity brokerage has such a marketplace. My comments about mutual fund transactions being free relate to buying the funds direct from the provider. For example, if you want Vanguard funds without a fee, buy directly from Vanguard. Conversely, there are ETF's you can buy with no transaction charge, depending upon the brokerage and which ETF's are on the "free" list. For example, TD Ameritrade has ETF's you can buy with no fee. So I have to be careful about making blanket statements.
A fool and his money are good for business.

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