Portfolio Review: one-year check-up

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Cranberry44
Posts: 133
Joined: Sun May 17, 2020 1:46 pm

Portfolio Review: one-year check-up

Post by Cranberry44 »

Hi all,

This is a one-year check-in since my first portfolio review. Based on below, is there anything I should re-examine or change? Am I missing anything?

Emergency funds:
Yes, about 4-6 months in Ally. For an emergency beyond that I will use my "play money," credit cards, and/or draw from my taxable.

Debt:
Student Loan Debt: $4,714.42 at 6.25% interest
This loan is currently in forbearance. I will pay it off once the forbearance ends on 09/30/2021

Tax Filing Status:
Single, no kids.

Tax Rate:
24% Federal, 9.3% State

State of Residence:
CA, VHCOL

Age: 32

Desired Asset allocation:
I'm not planning on holding bonds at the moment. I will revisit when 35.
For US/INT, I'm thinking anywhere between 20% to market weight for international. Currently adding new money to VXUS to get 20%.

Current Allocation:
  • US: 84%
  • INT: 16%
  • Bonds: 0%
Taxable approx. 100k
27.72%: VTI — 0.03%, (Vanguard Total Stock Market Index ETF)
11.43%: VT — 0.08%, (Vanguard Total World Stock ETF)
5.55%: VXUS — 0.08%, (Vanguard Total International Stock ETF)
1.16%: SPY — 0.095%, (SPDR S&P 500 ETF Trust)

Taxable Play Money approx. 7k
2.64%: BTC and ETH at Coinbase Pro
1.12%: roughly equal parts of AVUV, QQQJ, QQQM, VSS, and IEMG (Small Cap Value, Tech, Tech, International Small Cap Value, Emerging Markets) at Robinhood

Roth IRA approx. 25k
8.91%: VTI — ER: .03%, (Vanguard Total Stock Market Index ETF)
3.94%: FZROX — ER: .00%, (Fidelity ZERO Total Market Index Fund)
.58%: GBTC — ER: 2%, (Grayscale Bitcoin Trust)
.7%: ETHE — ER: 2.5%, (Grayscale Ethereum Trust)

401k: approx. 33k (8k in Roth 403b, 24k in 403b)
14.65%: FXIAX — ER: 0.015% (Fidelity 500 Index Fund)
3.92%: FSSNX — ER: 0.026%, (Fidelity Small Cap Index)

New Contributions:
Roth IRA maxed out for 2021 in the beginning of the year
403b on track to max out by end of December.

Other:
Approx. Net Worth: 180k. (which is what you see above. I don't own any property and I drive an '07 Honda, etc.).
Renting an apartment: approx 3k a month.
Occupation: High school teacher, just ending my first year. Pay is about 100k.
Savings rate for the past year is roughly 50%

Questions:
1. I’m mostly seeking general advice: any thoughts?

2. Hoping to sell all of the VTI in my Roth and purchase FZROX. Thoughts? This will result in VTI in taxable, FZROX in Roth, FXIAX in 403b which should simplify any tax-loss harvesting opportunities...correct? Any reason not to do this?

3. I don't plan on adding to the grayscale trusts in my IRA.
Last edited by Cranberry44 on Thu Jun 10, 2021 7:47 am, edited 3 times in total.
grok87
Posts: 9597
Joined: Tue Feb 27, 2007 9:00 pm

Re: Portfolio Review: one-year check-up

Post by grok87 »

Cranberry44 wrote: Mon Jun 07, 2021 10:09 pm Hi all,

This is a one-year check-in since my first portfolio review. Based on below, is there anything I should re-examine or change? Am I missing anything?

Emergency funds:
Yes, about 4-6 months. For an emergency beyond that I will use credit cards and/or draw from my taxable.

Debt:
Student Loan Debt: $4,714.42 at 6.25% interest
This loan is currently in forbearance. I will pay it off once the forbearance ends on 09/30/2021

Tax Filing Status:
Single, no kids.

Tax Rate:
24% Federal, 9.3% State

State of Residence:
CA, VHCOL

Age: 32

Desired Asset allocation:
I'm not planning on holding bonds at the moment. I will revisit when 35.
For US/INT, I'm thinking anywhere between 20% to market weight for international. Currently adding new money to VXUS to get 20%.

Current Allocation:
  • US: 84%
  • INT: 16%
  • Bonds: 0%
Taxable approx. 100k
27.72%: VTI — 0.03%, (Vanguard Total Stock Market Index ETF)
11.43%: VT — 0.08%, (Vanguard Total World Stock ETF)
5.55%: VXUS — 0.08%, (Vanguard Total International Stock ETF)
1.16%: SPY — 0.095%, (SPDR S&P 500 ETF Trust)

Taxable Play Money approx. 7k
2.64%: BTC and ETH at Coinbase Pro
1.12%: roughly equal parts of AVUV, QQQJ, QQQM, VSS, and IEMG (Small Cap Value, Tech, Tech, International Small Cap Value, Emerging Markets) at Robinhood

Roth IRA approx. 25k
8.91%: VTI — ER: .03%, (Vanguard Total Stock Market Index ETF)
3.94%: FZROX — ER: .00%, (Fidelity ZERO Total Market Index Fund)
.58%: GBTC — ER: 2%, (Grayscale Bitcoin Trust)
.7%: ETHE — ER: 2.5%, (Grayscale Ethereum Trust)

401k: approx. 33k (8k in Roth 403b, 24k in 403b)
14.65%: FXIAX — ER: 0.015% (Fidelity 500 Index Fund)
3.92%: FSSNX — ER: 0.026%, (Fidelity Small Cap Index)

New Contributions:
Roth IRA maxed out for 2021 in the beginning of the year
403b on track to max out by end of December.

Other:
Approx. Net Worth: 180k. (which is what you see above. I don't own any property and I drive an '07 Honda, etc.).
Renting an apartment: approx 3k a month.
Occupation: High school teacher, just ending my first year. Pay is about 100k.

Questions:
1. I’m mostly seeking general advice: any thoughts?

2. Hoping to sell all of the VTI in my Roth and purchase FZROX. Thoughts? This will result in VTI in taxable, FZROX in Roth, FXIAX in 403b which should simplify any tax-loss harvesting opportunities...correct? Any reason not to do this?

3. I don't plan on adding to the grayscale trusts in my IRA.
maybe ibonds?
RIP Mr. Bogle.
lakpr
Posts: 7659
Joined: Fri Mar 18, 2011 9:59 am

Re: Portfolio Review: one-year check-up

Post by lakpr »

I would liquidate that play money and pay off the student loan. Student loan interest is not tax-deductible in the 24% tax bracket, and that 6.25% you are paying is after-tax interest. Just to break even, you need to earn 8.22% on that $4750 principal balance, higher than that if you take state taxes into consideration.

That is really stock-market like return without the stock-market risk.

Waiting until 9/30/2021 to pay that off is really playing the roulette. If you miss it by one day you will (likely, depends on the rules) get hit with the pent up interest. I would pay it off tomorrow.

I would also shift the VTI investment in Roth IRA to another investment. You want to be prepared for tax loss harvesting in your taxable account, which in turn means that you cannot have bought "substantially identical" securities in your taxable OR IRA, in the previous 30 days of the sale realizing the loss. But VTI in Roth IRA could have a dividend automatic reinvestment in the previous 30 days -- so you could be subject to wash sale rules. By not holding the same investments in Roth IRA and taxable, you avoid this situation altogether.

Since you have FZROX there already, I suggest you sell off VTI and plow those proceeds into FZROX.
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Topic Author
Cranberry44
Posts: 133
Joined: Sun May 17, 2020 1:46 pm

Re: Portfolio Review: one-year check-up

Post by Cranberry44 »

grok87 wrote: Tue Jun 08, 2021 5:29 am maybe ibonds?
Thanks, grok87. I have to admit I don't understand iBonds much at all, despite their popularity here. I'll check them out again and see if they fit with my strategy.
lakpr wrote: Tue Jun 08, 2021 7:08 am I would liquidate that play money and pay off the student loan. Student loan interest is not tax-deductible in the 24% tax bracket, and that 6.25% you are paying is after-tax interest. Just to break even, you need to earn 8.22% on that $4750 principal balance, higher than that if you take state taxes into consideration.

That is really stock-market like return without the stock-market risk.

Waiting until 9/30/2021 to pay that off is really playing the roulette. If you miss it by one day you will (likely, depends on the rules) get hit with the pent up interest. I would pay it off tomorrow.

...
I appreciate the sentiment, lakpr, and have considered it myself, but I think I will wait a bit longer. This is the federal student loan forbearance due to COVID-19, so there's no "pent-up interest." There's even a possibility that the forbearance will be extended, and I'm justifying waiting the entire forbearance period as the my emergency fund is at least getting a tiny bit of interest in an ally NP-CD. I'll just be careful to pay it off a few weeks before it ends.
grok87
Posts: 9597
Joined: Tue Feb 27, 2007 9:00 pm

Re: Portfolio Review: one-year check-up

Post by grok87 »

Cranberry44 wrote: Tue Jun 08, 2021 9:28 am
grok87 wrote: Tue Jun 08, 2021 5:29 am maybe ibonds?
Thanks, grok87. I have to admit I don't understand iBonds much at all, despite their popularity here. I'll check them out again and see if they fit with my strategy.
the 2 main issues are:
1) you need a separate account at treasury direct
2) you can only buy $10-$15k per year.

that being said, i think they are the best fixed income investment out there right now and likely for the foreseeable future. If i could trade all of my other bonds for ibonds i would

cheers,
grok
RIP Mr. Bogle.
User avatar
Topic Author
Cranberry44
Posts: 133
Joined: Sun May 17, 2020 1:46 pm

Re: Portfolio Review: one-year check-up

Post by Cranberry44 »

Thanks all.

Anyone else spots anything I may try differently? Or does it seem like the right/a reasonable track?
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