2019 Portfolio Check Up and Direction

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Topic Author
baseball2horse
Posts: 37
Joined: Wed May 09, 2018 1:38 pm

2019 Portfolio Check Up and Direction

Post by baseball2horse » Thu Jan 10, 2019 3:01 pm

Hello, I'm a single 25 year old and I'm trying to make sure my fiances are in order. I bought a house last year and now with the new year want to make sure I'm making the best decisions with my portfolio both in what accounts and what investments i'm using going forward

Mortgage: 1.6k (~270k at 4.5%) (with 650/mo from my roommate)
Income: 87k

Assests
401k ~50k (~8.5k in Roth and rest in traditional)
90% S&P500 (0.07 expense ratio)
7% Broad Market Bond Index Fund (0.08 expense ratio)
3% Company stock fund. part of company contributions go directly into this requiring periodic re-balancing

HSA ~1.2k (plan allows for investing once account has over 1k but charges 3 dollar per month investment account fee so waiting to invest until i have enough to have a reasonable risk of recouping that fee. Fees for having the money in cash part of the account are paid by employer)

Roth IRA: ~2.5k
VLXVX: Vanguard Target Retirement 2065 Fund 0.15%

emergency fund: 7k
high yield savings account at 2%

taxable account 70k
15k VBTLX: Vanguard Total Bond Market Index Fund Admiral Shares, 0.05%
55k VFIAX: Vanguard 500 Index Fund Admiral Shares 0.04%

Current plan
HSA: 3.5k (including employer match. will use for medical expenses as needed
401k : traditional ~14k (16%pre-tax and plus 10% employer match ~8.7k)
Roth IRA: 6k, planning on using dividends from taxable to partially fund this
emergency fund/house maintenance fund: 500/mo


Other Fund available in 401k account
401k
U.S. Equity Fund / Large Blend 0.55
Small / Mid Cap Indexed Equity Fund / Small Mid-Cap Blend 0.07
Global Equity Fund / Large Blend 0.68%
Int’l Developed Markets Equity Fund / Large Blend 0.68
MSCI EAFE® Indexed Equity Fund / Foreign Large Blend 0.09
Global Real Estate Fund / Global Real Estate 0.83
Emerging Markets Indexed Equity Fund / Foreign Large Blend 0.15
Commodities Fund / Commodities Broad Basket 0.13
Company Common Stock Fund / Non-Diversified Domestic Equity 0.07
Broad Market Bond Index Fund / Fixed Income .07
High Yield Bond Fund / Fixed Income 0.53
Treasury Inflation Protected Securities 0.09
Commodities Fund 0.13
Government Short Term Investment Fund 0.08
Target Date Funds (2060,55,50,45,40) 0.54

There is also an option to move my 401k to a self-directed brokerage account at TD Ameritrate, which would i believe give one the full access of all of TD ameritrate's funds but also seems needless complicated.

I'd like to add some international I think to get some diversity, but am unsure in which account to do it in. I'd like to avoid re-balancing in taxable account as it has mostly capital gains and i don't intend to put more in it until I can max out my retirement accounts.

Tal-
Posts: 410
Joined: Fri Apr 22, 2016 10:41 pm

Re: 2019 Portfolio Check Up and Direction

Post by Tal- » Thu Jan 10, 2019 3:54 pm

*slow clap*

Job well done! To say that you're ahead of the game is a bit of an understatement. You're simply rock'n it!

Your asset allocation looks fine (aggressive, but I'm good with that). Your account balances look strong and your planned investments in 2019 look great.

I also agree about your desire to add some international, and agree about your desire to avoid doing any transactions in taxable that result in cap gains.

If I were going to make some changes, I would diversify within your 401k, adding both international and some small/mid caps. But, that's minor.
Debt is to personal finance as a knife is to cooking.

User avatar
Duckie
Posts: 6708
Joined: Thu Mar 08, 2007 2:55 pm

Re: 2019 Portfolio Check Up and Direction

Post by Duckie » Thu Jan 10, 2019 7:37 pm

baseball2horse wrote:401k ~50k (~8.5k in Roth and rest in traditional)
90% S&P500 (0.07 expense ratio)
7% Broad Market Bond Index Fund (0.08 expense ratio)
3% Company stock fund. part of company contributions go directly into this requiring periodic re-balancing
I hope you sell the company stock as soon as allowed.
Roth IRA: ~2.5k
VLXVX: Vanguard Target Retirement 2065 Fund 0.15%
In general it's better to put assets with higher expected growth (stocks) in Roth accounts and assets with lower expected growth (bonds) in pre-tax accounts. That's because you've already paid the taxes in the Roth accounts so future growth is tax-free. So when this account gets above $3000 switch to either Total Stock or Total International Stock.
taxable account 70k
15k VBTLX: Vanguard Total Bond Market Index Fund Admiral Shares, 0.05%
55k VFIAX: Vanguard 500 Index Fund Admiral Shares 0.04%
Bonds don't belong in taxable. Consider selling VBTLX. Also consider not buying more VFIAX and instead choosing VTSAX Total Stock for any new purchases (including dividend reinvestment).
Fund available in 401k account
The best options are:
  • S&P 500 Index 0.07-- Large caps, 80% of US stocks
  • Small / Mid Cap Indexed Equity 0.07 -- Mid/small caps, 20% of US stocks
  • MSCI EAFE Indexed Equity 0.09 -- Developed markets, 75% of international stocks
  • Broad Market Bond Index 0.07 -- US bonds
There is also an option to move my 401k to a self-directed brokerage account at TD Ameritrate, which would i believe give one the full access of all of TD ameritrate's funds but also seems needless complicated.
Your standard options are decent. You don't need the SDBA.
I'd like to add some international I think to get some diversity, but am unsure in which account to do it in. I'd like to avoid re-balancing in taxable account as it has mostly capital gains and i don't intend to put more in it until I can max out my retirement accounts.
You could sell the bonds in taxable and put total international there. Or you could put it in your Roth IRA. Or you could put the less complete EAFE fund in your 401k. All are workable options.

Topic Author
baseball2horse
Posts: 37
Joined: Wed May 09, 2018 1:38 pm

Re: 2019 Portfolio Check Up and Direction

Post by baseball2horse » Thu Mar 14, 2019 10:22 am

Thank you both for the advice!

I have added diversification to my 401k by adding the MSCI EAFE® Indexed Equity Fund.

I think I will eventually move the bond funds out of taxable, but as I am currently using the dividends from my taxable account to partially fund the Roth IRA I think I will leave it for now.

Thanks again!

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