Investment Annual Physical!

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Topic Author
bioebud
Posts: 6
Joined: Sun Jun 12, 2016 1:19 pm

Investment Annual Physical!

Post by bioebud » Mon May 27, 2019 2:51 pm

I want to thank you all for contributing to this forum! I find both the topics and discussion very helpful as I learn more and more about efficient investing practices. I'm looking for opinions on my overall investment strategy and have a couple questions that I'll post up front. Thanks!

Questions
1. Should I get out of Oakmark funds completely and move to lower cost ROTH custodian (e.g. Fidelity, Vang, etc)?
2. Re 401k international allocation - Should I move from MINHX to VTIAX (lower fees)? Or even choose a different fund altogether for international
exposure? (available funds listed)
3. General comments about my portfolio?

Income = $170-185k
Debt = none
Filing Status = married, file jointly
Age = Him (32), Her (28)
Emergency Funds = 3 months

Desired Allocation = 80/20 stocks/bonds
Intl Allocation = 20% of all stocks
Risk Tolerance = fairly aggressive, looking to buy/hold for the long haul

His 401k (max each year)
17% Vang Inst Index (VINIX) (0.035% er)
11% MFS Intl Value R4 (MINHX) (0.73% er)
11% Vang Midcap IDX Adm (VIMAX) (0.05% er)
11% Vang Tot BD MKT Adm (VBTLX) (0.05% er)
5% Vang Tot Intl Stk Ad (VTIAX) (0.11% er)

Available international equity funds
DFA Emerg Mkt (DFEMX) (0.47% er)
DFA Intl Sm Comp (DFISX) (0.53% er)
DFA Int Core Equity Port (DFIEX) (0.3% er)
MFS INTL VALUE R4 (MINHX) (0.73% er)
Vang Tot Intl Stk AD (VTIAX) (0.11% er)

His ROTH (max each year)
19% Oakmark (OAKMX) (0.85% er)

His HSA (contribute ~$4k each year)
4% Schwab S&P500 Ind (SWPPX) (0.02% er)
1% Schwab Sm Cap Stk Ind (SWSSX) (0.04% er)
1% Schwab Intl Ind (SWISX) (0.06% er)
1% Vang Infl Prot Sec (VAIPX) (0.10% er)

Her ROTH (max each year)
6% Schwab Tot Stk Mkt Ind (SWTSX) (0.03% er)

Taxable Brokerage Account with Fidelity (small contributions each year)
11% Fid Tot Mkt Ind Prem Cl (FSKAX)
Last edited by bioebud on Sun Jun 09, 2019 10:34 pm, edited 1 time in total.

LeeMKE
Posts: 1837
Joined: Mon Oct 14, 2013 9:40 pm

Re: Investment Annual Physical!

Post by LeeMKE » Mon May 27, 2019 3:55 pm

I'll start out with a couple observations:

Yes, I would change from Oakmark (which I had at one time) to another lower cost index fund.

Your other choices look good.

But I would suggest you consider increasing your emergency fund. It looks like each of you work, so if true, a layoff might only affect a portion of your income stream. And 3 months is good for someone in their 20s. But as we get older, it takes longer to find new employment, and injuries or illness that might take us out of the workforce take longer to recover from. By age 50, you should have one year of living expenses available. This can be Roth contributions in an account that is 5 years old. I would slowly increase your emergency fund to 6 months over the next few years.

Finally, are you putting 15% of all income away for retirement? I don't know the split of your income, but if one of you makes the majority of this income, you may need to save in a taxable account once you fill up your 401K, to reach 15%.

Keep going! You are on the right track.
The mightiest Oak is just a nut who stayed the course.

User avatar
Duckie
Posts: 6625
Joined: Thu Mar 08, 2007 2:55 pm

Re: Investment Annual Physical!

Post by Duckie » Mon May 27, 2019 4:03 pm

bioebud wrote:Should I get out of Oakmark funds completely and move to lower cost ROTH custodian (e.g. Fidelity, Vang, etc)?
Yes. Transfer your Roth IRA to either Vanguard or Fidelity. Since the taxable account is at Fidelity, that might be the simplest option. Is her Roth IRA at Schwab?
Re 401k international allocation - Should I move from MINHX to VTIAX (lower fees)? Or even choose a different fund altogether for international exposure?
Yes, sell MINHX and buy VTIAX. I think you should also drop VIMAX.
General comments about my portfolio?
It's more complicated than it needs to be. Unfortunately, because you have each account totaling 100% instead of all accounts totaling 100% we don't know your actual account percentages. Edit your post and fix that.

Topic Author
bioebud
Posts: 6
Joined: Sun Jun 12, 2016 1:19 pm

Re: Investment Annual Physical!

Post by bioebud » Sun Jun 09, 2019 10:39 pm

Thank you for your replies!

1. I have moved money out of OAKMX and am opening a ROTH with Fidelity. Duckie, yes, her ROTH is with Schwab (had it prior to marriage).

2. Looking at MorningStar, MINHX outperforms VTIAX over essentially any time period. However MINHX fees are higher. How can I calculate the cost difference between the two over time?

3. LeeMKE, thanks for the advice re emergency fund. You're right and we'll look to continue increasing this amount as time goes progresses.

4. We're contributing about 24% on average each month to investment accounts. I'd like to put more into brokerage than I am, but do you feel it's more important to max out the tax deferred accts first?

LeeMKE
Posts: 1837
Joined: Mon Oct 14, 2013 9:40 pm

Re: Investment Annual Physical!

Post by LeeMKE » Mon Jun 10, 2019 3:24 am

4. Yes, use up tax deferred first, and every year. These are use it or lose it. I always fill that space before any taxable contributions. . . Just in case.
The mightiest Oak is just a nut who stayed the course.

User avatar
Duckie
Posts: 6625
Joined: Thu Mar 08, 2007 2:55 pm

Re: Investment Annual Physical!

Post by Duckie » Mon Jun 10, 2019 4:11 pm

bioebud wrote:Looking at MorningStar, MINHX outperforms VTIAX over essentially any time period.
In the past MINHX has outperformed VTIAX. Who knows what the future will be. How much has it outperformed?
However MINHX fees are higher. How can I calculate the cost difference between the two over time?
Compare fees at Expense Ratio Calculator or Compare Investment Fees.
_______________________________

You have a desired AA of 80% stocks, 20% bonds, with 20% of stocks in international. That breaks down to 64% US stocks, 16% international stocks, and 20% bonds. You could have something like:

Taxable at Fidelity -- 11%
11% (FSKAX) Fidelity Total Market Index Fund (0.015%)

His 401k -- 56%
20% (VINIX) Vanguard Institutional Index Fund Institutional Shares (0.035%)
16% (VTIAX) Vanguard Total International Stock Index Fund Admiral Shares (0.11%)
20% (VBTLX) Vanguard Total Bond Market Index Fund Admiral Shares (0.05%)

His Roth IRA at Fidelity -- 20%
20% (FSKAX) Fidelity Total Market Index Fund (0.015%)

Her Roth IRA at Schwab -- 6%
6% (SWTSX) Schwab Total Stock Market Index Fund (0.03%)

His HSA -- 7%
7% (SWPPX) Schwab S&P 500 Index Fund (0.02%)

Just some possibilities.

Miriam2
Posts: 2530
Joined: Fri Nov 14, 2014 11:51 am

Re: Investment Annual Physical!

Post by Miriam2 » Tue Jun 11, 2019 4:11 pm

Duckie wrote:
bioebud wrote:However MINHX fees are higher. How can I calculate the cost difference between the two over time?
Compare fees at Expense Ratio Calculator or Compare Investment Fees.
Duckie, many thanks for these easy calculators :D Have you found them to be accurate?

ExitStageLeft
Posts: 1412
Joined: Sat Jan 20, 2018 4:02 pm

Re: Investment Annual Physical!

Post by ExitStageLeft » Tue Jun 11, 2019 4:55 pm

Miriam2 wrote:
Tue Jun 11, 2019 4:11 pm
Duckie wrote:
bioebud wrote:However MINHX fees are higher. How can I calculate the cost difference between the two over time?
Compare fees at Expense Ratio Calculator or Compare Investment Fees.
Duckie, many thanks for these easy calculators :D Have you found them to be accurate?
Both of them spit out the exact same numbers as I get using Excel and the FV (Future Value) function. The accuracy beyond that is only as good as the underlying assumptions on expenses and returns.

Topic Author
bioebud
Posts: 6
Joined: Sun Jun 12, 2016 1:19 pm

Re: Investment Annual Physical!

Post by bioebud » Fri Jun 21, 2019 5:12 pm

Thanks very much, Duckie! I have made most of the changes you suggest to simplify my 401k as well as her ROTH with Schwab. Average (weighted) expense ratio now down to 0.05% from 0.37%!

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