Building ETF portfolio quick questions

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closinggoalkeeper
Posts: 10
Joined: Thu May 03, 2018 10:01 am

Building ETF portfolio quick questions

Post by closinggoalkeeper » Wed May 16, 2018 12:59 pm

Hey all,

I posted a little while back, and have spent a ton of time researching since then. I feel a lot more informed, and have used countless posts, morningstar searches, and articles to start to compile a fairly simple ETF portfolio with Vanguard funds. Here is the info for my wife and me, and below is my proposed portfolio with a few questions:

INFO:
EF - 6 months in a 1.75% MM account
Debt - $95,000 on a 30 year 3.75% mortgage ; $5,200 on a 60 month 4.45% car loan
Tax Filing - Married Filing Jointly
Tax Rate- 12% federal; No state
State of Residence - TN
Age- Me 29, Wife 28
Desired asset allocation - ~85% stocks / 15% bonds

Total retirement assets: Mid five figures

Current Retirement Assets:
22% Cash (Most of which will go to fund our IRAs this year once I get a game plan of where to put it)
17% Walmart Stock (WMT)
9% Comcast Dividend Stock (CMCSA)
2% AT&T (T)
34% EE Bonds

In my IRA:
5% Calamos Growth & Income Fund Class C (CVTCX) (1.87% expense)
5% Columbia Large Cap Growth Fund III Class C (NFECX) (1.83% expense)

8% A 401a plan from my wife's former employer that I will rollover into an IRA

Future Contributions:

Right now, neither of us make much money, and neither of us have a matching employer account. I own a struggling small business that does just good enough to pay the bills, but I am currently working on a buyout that should net us somewhere between 100-200% of our current retirement assets. Also, I am currently job searching that should give me a 200% raise over what I am currently paying myself. My wife is currently getting an advanced degree. She will be done in ~2 years, and then should see a moderate bump in her salary. All this to say, right now, we will be happy to just max our IRA accounts for the next couple of years while getting a good idea of what we want to do once we have more money to contribute to retirement.

Proposed ETF Portfolio for both of our IRAs:

15% BND (Total Bond Market)
35% VTI (Total Stock Market)
10% VWO (Emerging Markets)
15% VEA (Developed Markets)
The next two are the ones I am weighing my options on right now:
15% VBR (Small-cap value)
10% VGT (Tech)

Questions:

1. I feel extremely comfortable with the first four funds listed. It's 75% of our portfolios and gives us a pretty diversified, low-cost, safe core to keep basically our entire lives until we want to start switching more to bonds later in life. The last 25% is where I would like to take a little risk. I'm leaning towards the two listed, but I'm also weighing VUG (Large Cap Growth), VIG (Dividend), VHT (Healthcare), or VSS (Small cap excluding US). Any thoughts on those? I like the two listed because, most of the funds in the core are pretty much large cap, so the VBR gets me a little diversification there and I feel VGT will be a stable sector-fund for the foreseeable future. I feel like VUG and VIG will overlap too much with VTI. VHT is ok, but I like VGT better, and VSS seems a little bit too risky, so I may get skittish and do something stupid if I see it going down. If there are any other funds that I should look at let me know. I'm also not opposed to just dump the last 25% into VTI as well, but I would like a little more diversification.

2. Should I divest out of WMT, T, and CMCSA and move it all into something like VTI for my taxable account? Is there a better total fund that is better for tax purposes?

3. What to do with my bonds? They are all paper bonds, so I feel like I should convert them on the treasury website to get better info on them, and see about selling the low yield ones in order to either invest more in my taxable accounts or to keep the money in a low yield CD until I need it to max out our IRAs for the next couple of years until we make enough money to do that without the help from the bonds?

livesoft
Posts: 60495
Joined: Thu Mar 01, 2007 8:00 pm

Re: Building ETF portfolio quick questions

Post by livesoft » Wed May 16, 2018 1:21 pm

2. Yes, you should divest out of those stocks.

1. Don't bother with VBR and VGT right now. Put the money earmarked for them into VTI and VEA.

3. I cannot advise you on those bonds. I would not own them myself, but would use total US bond market index fund.

4. Why all these ETFs anyways? Why not something simple like Vanguard LifeStrategy Growth in those IRAs? I hope you don't put all those ETFs in each IRA. One could have some in one IRA and the others in the other IRA.
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