Portfolio Advise please!!!

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Topic Author
pangeaprofile
Posts: 8
Joined: Thu Sep 09, 2021 11:09 am

Portfolio Advise please!!!

Post by pangeaprofile »

Hi, after many years, I am trying to manage my accounts, which were sort of a mess. I have done some basic things like getting out of expensive mutual funds in retirement accounts (after many years- ouch) but I have a lot of capital gains in my non-retirement accounts though my early savings and UGMA, so it will take me some time to develop the right portfolio. Right now, I need help to create a vision of what to work towards slowly. I have read some great posts here and hoping to get some similar advice. I started off on this journey talking to vanguard, fidelity, and personal capital, who all recommended that they manage the portfolios for a fee. Researching what their actual value ad brought me here. I would like to get a place where I would re-balance once a quarter easily.

• Stats: 45, head of household, California resident
• Emergency fund: yes
• Debt: none
• Tax rate: US: 32%, CA: 9.3%
• Desired allocation: 80/20- though some questions here below – Personal Capital recommends having another category of “Alternative”
• International allocation of stocks: 25-30% of total portfolio, based on advice from Fidelity, Vanguard, Personal Capital

Things I am also interested in learning:
- Vanguard said to do an international bond fund
- Personal Capital said to use “Alternatives” with a recommended ratio below.
- I have set up a Charitable giving account and use that a little bit.
- I have read that the index fund approach, like FSKAX, can tilt to bubbles. Personal Capital recommended a more targeted allocation across sectors because of this.
- I am also trying to understand whether and when to do a rollover IRA conversion to Roth or some other Roth contribution.
- REITs?
- Tax loss harvesting- Personal Capital said something like they will do this by selling a position and then buying a similar index and then buying the original one and that seems a bit complicated.

Thank you very much in advance- also, if there's a better way to format this, I will edit.

Vanguard and Fidelity Taxable
[/sub]Symbol Description Percentage Expense Ratios
FLPSX FIDELITY LOW PRICED STOCK 9.47% (expense ratio:0.78%)
NPRTX NEUBERGER BERMAN LARGE CAP VALUE INVE 6.19% (expense ratio:0.85%
FDVLX FIDELITY VALUE 5.74% (expense ratio:0.57%
FDGRX FIDELITY GROWTH COMPANY 5.09% (expense ratio:0.83%
VFIFX Vanguard Target Retirement 2050 Fund Investor Shares 4.42% (expense ratio:0.15%
FMAGX FIDELITY MAGELLAN 3.84% (expense ratio:0.77%
IYY ISHARES DOW JONES US ETF 3.46% (expense ratio:0.20%
VTHRX Vanguard Target Retirement 2030 Fund Investor Shares 3.25% (expense ratio:0.15%
PRFDX T ROWE PRICE EQUITY INCOME 2.80% (expense ratio:0.64%
IBB ISHARES TR ISHARES BIOTECH 2.73% (expense ratio:0.46%
VTI VANGUARD TOTAL STOCK MARKET ETF 2.24% (expense ratio:
VXUS VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND 1.66% (expense ratio:
IJT ISHARES TR S&P SMALL CAP 600 GROWTH ETF 1.29% (expense ratio:0.25%
AMZN AMAZON.COM INC 1.08% (expense ratio:
IWN ISHARES RUSSELL 2000 VALUE ETF 0.57% (expense ratio:0.24%
ICF ISHARES TR COHEN STEER REIT 0.50% (expense ratio:
COP CONOCOPHILLIPS COM 0.40% (expense ratio:
SCHW SCHWAB CHARLES CORP COM 0.32% (expense ratio:
PSX PHILLIPS 66 COM 0.25% (expense ratio:
RSG REPUBLIC SERVICES INC 0.25% (expense ratio:
SLYV SPDR SERIES TRUST S&P 600 SMCP VAL 0.20% (expense ratio:0.15%
VXF VANGUARD EXTENDED MARKETS INDEX FUND 0.09% (expense ratio:0.06%
Money market 3.06% (expense ratio:


Fidelity 401K (Contributing at 19.5)
TP93 Fidelity TARGET DATE 2040 ~32% (expense ratio:0.07%

Choice:
  • RSP RET INCOME FUND 12.05% 8.47% 6.97% 5.94%
    RSP TARGET DATE 2020 15.06% 9.75% 8.82% 8.62%
    RSP TARGET DATE 2025 17.96% 11.61% 10.68% 9.92%
    RSP TARGET DATE 2030 19.93% 12.76% 11.78% 10.69%
    RSP TARGET DATE 2035 21.94% 13.30% 12.52% 11.13%
    RSP TARGET DATE 2040 23.92% 13.73% 13.11% 11.51%
    RSP TARGET DATE 2045 25.76% 14.07% 13.61% 11.75%
    RSP TARGET DATE 2050 26.81% 14.37% 13.79% 11.83%
    RSP TARGET DATE 2055 26.85% 14.37% 13.77% 11.62%
    RSP TARGET DATE 2060 26.81% 14.31% 13.61% 11.04%

    RSP LARGE STK INDEX (expense ratio- 0.013%) 12/30/1977 Stock Investments 31.12% 18.04% 18.00% 16.33%
    RSP TOTAL US STK IND 07/13/2009 Stock Investments (expense ratio- 0.017%) 33.11% 17.88% 17.95% 16.18%
    RSP SMALL STK INDEX 12/29/1995 Stock Investments 42.95% 16.50% 17.53% 15.40%
    RSP WORLD STOCK INDX 07/13/2009 Stock Investments 29.04% 14.79% 14.70% 11.60%
    RSP INT'L STK INDEX (expense ratio- 0.055%) 12/31/1984 Stock Investments 26.98% 9.60% 10.16% 7.37%
    RSP EMERGING MARKET 07/13/2009 Stock Investments 28.02% 6.72% 8.69% 3.53%
    RSP BOND INDEX (Expense ratio- 0.027%) 06/28/1996 Bond Investments -0.14% 5.46% 3.10% 3.15%
    RSP US GOV BOND INDX 07/13/2009 Bond Investments -0.72% 4.04% 1.80% 2.10%
    RSP SHORT TERM BOND 08/01/2011 Bond Investments 0.35% 2.87% 1.87% 1.33%
    RSP MONEY MARKET 07/29/2011 Short Term Investments



Fidelity 401K Brokerage (limited to certain mutual funds)
Right now this has been moved to my 401K Target date 2040.
Other options include things like FSKAX and "Through your BrokerageLink account, you have the ability to invest in Fidelity mutual funds and non-Fidelity mutual funds available through Fidelity FundsNetwork®"
Not a 100% confident, but I don't think they charge fees, or at least there are a lot of 0 transaction fee options.

Fidelity Rollover IRA
- Rolled this into 401K to have the option to do back door roth.


Vanguard Roth IRA
FCNTX Fidelity® Contrafund® Fund 2.89% (expense ratio:0.85%
VXUS VANGUARD TOTAL INTL STOCK INDEX FUND ETF 3.36% (expense ratio:0.08%
VTI VANGUARD TOTAL STOCK MARKET ETF 3.24% (expense ratio:0.03%
VMFXX Vanguard Federal Money Market Fund 0.01%


Personal Capital allocation recommendations:

Personal capital

High growth Growth 2
Stocks
US Stocks 56.50%
Developed International Stocks 17.40%
Emerging Markets 6.60%

Alternatives (real estate, gold, international real estate)
US Real Estate 4.90%
Foreign Real Estate 2.10%
Gold 2.00%
Energy 0.97%
Agriculture 0.40%
Metals 0.25%
BONDS
US Corporate 2.32%
US government 2.32%
International 1.81%
US inflation protected 1.54%

Cash 1%
Last edited by pangeaprofile on Wed Sep 22, 2021 1:33 pm, edited 9 times in total.
User avatar
FiveK
Posts: 12012
Joined: Sun Mar 16, 2014 2:43 pm

Re: Portfolio Advise please!!!

Post by FiveK »

pangeaprofile, welcome to the forum.

Some general comments:
  • Doing a Roth IRA conversion while still working is usually not a good idea. See that link for more.
  • The advisability of incurring capital gains to change your taxable investments depends on the fraction of the holding that is gain, and how much better return you expect in the new investment. You might do some spreadsheet work to sort your taxable holdings by "percent gain" and start by selling the ones with lowest gains and highest expense ratios.
  • Conversely, donating the ones you no longer want that have the highest gains is best.
  • In any portfolio, holdings that are less than 10% or so may add more clutter than value. E.g., will you really care if your 1% holding doubles or loses 50%?
tashnewbie
Posts: 1921
Joined: Thu Apr 23, 2020 12:44 pm

Re: Portfolio Advise please!!!

Post by tashnewbie »

Welcome to the forum.

Simplicity will be your friend. I think you’ll need to do a lot of streamlining. It may take years to unwind in the taxable brokerage account, as you alluded to.

Have you heard of the Bogleheads 3-fund portfolio? I think it would serve you well (or even a 1-fund portfolio in the tax-advantaged accounts). See: https://www.bogleheads.org/wiki/Three-fund_portfolio.

In your 401k, I’d say just use the target date fund that aligns with your desired asset allocation, taking into account the stock you hold in other accounts.

I’d transfer the Rollover IRA into the 401k, if the 401k will accept it and the 401k doesn’t have high administrative fees that aren’t listed. You have good fund options in the 401k, and moving the Rollover IRA into the 401k reduces the number of accounts you have, which should provide some simplification.

The only things in your taxable that I’d want to keep are VTI and VXUS. Some of the others are lower cost and not wrong in a taxable account, but those 2 funds cover total US and international stock markets.

Read the BH wiki and familiarize yourself with the BH investing philosophy.
MittensMoney
Posts: 263
Joined: Mon Dec 07, 2015 10:59 pm

Re: Portfolio Advise please!!!

Post by MittensMoney »

First thing I noticed is you're paying Personal Capital level fees as EXPENSE RATIOS for a lot of your investments. Moving those high cost funds into low cost market indexes will immediately boost your returns, and I'm going to guess that FLPSX , NPRTX , FDRX aren't wildly outperforming the S&P500 over a long term basis. Anything over .10% expense ratio should be looked at intently with desire to move into a less expensive fund.
Topic Author
pangeaprofile
Posts: 8
Joined: Thu Sep 09, 2021 11:09 am

Re: Portfolio Advise please!!!

Post by pangeaprofile »

Thanks for the initial feedback. I am still don't know how to use this website well. @Mittensmoney- I am not using PC. I just was pitched it and researching whether it made sense brought me to the forum. I am in learning mode and and am wondering if what they say about "alternatives" and tax loss harvesting makes sense as part of an allocation strategy. I agree that those mutual funds aren't necessarily great- I guess I will have to figure out a calculator to learn how to balance the capital gains vs expense ratios. I started by at least not having the dividends not automatically reinvest (learned that on the forum!) last week. :)

@tashnewbie Thanks! Yeah, I am working on how to get it simple. VTI and VXUS are things I have done recently. I will look at the 3 fund strategy more closely but wondering about the alternatives recommendation. I guess I am still learning about philosophies- I don't know if I am a boglehead yet. But a lot of the strategy makes sense to me. it will take time.

@FiveK I agree about the stocks- though, wow, Amazon! I just thought that if I am going to take capital gains now, I should focus first on getting out of some of the expense ratio mutual funds first.
HomeStretch
Posts: 6858
Joined: Thu Dec 27, 2018 3:06 pm

Re: Portfolio Advise please!!!

Post by HomeStretch »

Welcome to the forum!

Your portfolio would benefit from simplifying and using low-ER funds. Consider focusing on a plan to streamline your Taxable account per the suggestions from other posters.

From past forum threads, it does not appear to me that Personal Capital, used as a portfolio advisor, results in a simplified or low-cost portfolio.

Either an investor believes in holding alternative assets (such as gold, real estate) or not, so it’s a personal decision whether to do so. My personal belief is that for a portfolio less than at least 7-figures, it is not warranted.
tashnewbie
Posts: 1921
Joined: Thu Apr 23, 2020 12:44 pm

Re: Portfolio Advise please!!!

Post by tashnewbie »

pangeaprofile wrote: Mon Sep 13, 2021 12:35 pm @tashnewbie Thanks! Yeah, I am working on how to get it simple. VTI and VXUS are things I have done recently. I will look at the 3 fund strategy more closely but wondering about the alternatives recommendation. I guess I am still learning about philosophies- I don't know if I am a boglehead yet. But a lot of the strategy makes sense to me. it will take time.
As a novice investor, I think simplicity is critical. Starting out, I wouldn't worry about all the "alternatives." Get the core portfolio down (US stock, International stock, and bonds per the 3-fund portfolio). Later down the road, you can start slicing and dicing and messing with sector funds etc. For now, keep things as simple as possible (KISS method).
Topic Author
pangeaprofile
Posts: 8
Joined: Thu Sep 09, 2021 11:09 am

Re: Portfolio Advise please!!!

Post by pangeaprofile »

FiveK wrote: Sun Sep 12, 2021 3:23 am pangeaprofile, welcome to the forum.

Some general comments:
  • Doing a Roth IRA conversion while still working is usually not a good idea. See that link for more.
Thanks, I had seen that link- it seems like it is based on your income tax rate at retirement vs now. With a pension, I think that there is chance mine could be higher. However, I see that there is possibly an option to collapse the Rollover into the 401k and then I would be able to do a back door. I suppose I should also ask what the gains on the rollover would be.
Topic Author
pangeaprofile
Posts: 8
Joined: Thu Sep 09, 2021 11:09 am

Re: Portfolio Advise please!!!

Post by pangeaprofile »

tashnewbie wrote: Sun Sep 12, 2021 10:14 am
Have you heard of the Bogleheads 3-fund portfolio? I think it would serve you well (or even a 1-fund portfolio in the tax-advantaged accounts). See: https://www.bogleheads.org/wiki/Three-fund_portfolio.

In your 401k, I’d say just use the target date fund that aligns with your desired asset allocation, taking into account the stock you hold in other accounts.

I’d transfer the Rollover IRA into the 401k, if the 401k will accept it and the 401k doesn’t have high administrative fees that aren’t listed. You have good fund options in the 401k, and moving the Rollover IRA into the 401k reduces the number of accounts you have, which should provide some simplification.
Thanks, I think I figured out the quote thing! Would you suggest that I also do that with the brokerage link 401k- just use the plan target date fund? I thought it was better to have more options, and access to thinks like the FSKAX in the brokerage link, BND in the Rollover, but I read you to say that I should just go with the 401K target year fund (and chose the year based on desired allocation.) I was thinking I might need to increase the amount of bonds to get the right allocation. Also, Vanguard says to do international bonds? Also, I supposed I should consider how real estate weighs into that desired allocation.
HomeStretch
Posts: 6858
Joined: Thu Dec 27, 2018 3:06 pm

Re: Portfolio Advise please!!!

Post by HomeStretch »

Two actions you can take now (assuming you haven’t already done so) while deciding on a plan to tax-efficiently simplify your Taxable account:

1. Stop automatic reinvestment of dividends and capital gains distributions (CGD) so you don’t buy more of holdings you don’t want. The dividends/CGDs will go into your settlement account which you can then use to buy more of the holdings you do want, such as VTI and VXUS.

2. Set the cost basis method to “specific identification”. Then review all tax lots and sell any with a loss or small gain. Use the proceeds to buy VTI and VXUS. This interim clean-up may help you reduce the number of holdings to make the bigger clean-up more manageable.
User avatar
FiveK
Posts: 12012
Joined: Sun Mar 16, 2014 2:43 pm

Re: Portfolio Advise please!!!

Post by FiveK »

pangeaprofile wrote: Mon Sep 13, 2021 4:54 pm
FiveK wrote: Sun Sep 12, 2021 3:23 am
  • Doing a Roth IRA conversion while still working is usually not a good idea. See that link for more.
Thanks, I had seen that link- it seems like it is based on your income tax rate at retirement vs now. With a pension, I think that there is chance mine could be higher.
There's always a chance. ;)
Have you done a back-of-the-envelope estimate of what it will be?
However, I see that there is possibly an option to collapse the Rollover into the 401k and then I would be able to do a back door. I suppose I should also ask what the gains on the rollover would be.
Why the concern about gains in your rollover IRA?
tashnewbie
Posts: 1921
Joined: Thu Apr 23, 2020 12:44 pm

Re: Portfolio Advise please!!!

Post by tashnewbie »

pangeaprofile wrote: Mon Sep 13, 2021 5:00 pm
tashnewbie wrote: Sun Sep 12, 2021 10:14 am
Have you heard of the Bogleheads 3-fund portfolio? I think it would serve you well (or even a 1-fund portfolio in the tax-advantaged accounts). See: https://www.bogleheads.org/wiki/Three-fund_portfolio.

In your 401k, I’d say just use the target date fund that aligns with your desired asset allocation, taking into account the stock you hold in other accounts.

I’d transfer the Rollover IRA into the 401k, if the 401k will accept it and the 401k doesn’t have high administrative fees that aren’t listed. You have good fund options in the 401k, and moving the Rollover IRA into the 401k reduces the number of accounts you have, which should provide some simplification.
Thanks, I think I figured out the quote thing! Would you suggest that I also do that with the brokerage link 401k- just use the plan target date fund? I thought it was better to have more options, and access to thinks like the FSKAX in the brokerage link, BND in the Rollover, but I read you to say that I should just go with the 401K target year fund (and chose the year based on desired allocation.) I was thinking I might need to increase the amount of bonds to get the right allocation. Also, Vanguard says to do international bonds? Also, I supposed I should consider how real estate weighs into that desired allocation.
I think a target date fund (TDF) would be a great option for you for all of the money in your 401k, including money that's currently invested via the brokerage link.

There's no way I would use the brokerage link to buy these funds with these high expense ratios:

401K Brokerage (limited to certain mutual funds)
FDEGX FIDELITY GROWTH STRATEGIES FUND 1.58% (expense ratio:0.63%
PRDMX T ROWE PRICE DIVERSD MID CAP GROWTH 1.58% (expense ratio:0.80%

Much better to just use a TDF that matches your desired asset allocation across all your accounts.
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ruralavalon
Posts: 22162
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Portfolio Advise please!!!

Post by ruralavalon »

Welcome to the forum :) .


pangeaprofile wrote: Sat Sep 11, 2021 10:55 pm Hi, after many years, I am trying to manage my accounts, which were sort of a mess.
. . . . .
• Stats: 45, head of household, California resident
. . . . .
• Desired allocation: 80/20- though some questions here below – Personal Capital recommends having another category of “Alternative”
• International allocation of stocks: 25-30% of total portfolio, based on advice from Fidelity, Vanguard, Personal Capital
In my opinion at age 45, no debt, with a pension expected, your desired asset allocation of 80% stocks/20% fixed income is within the range of what is reasonable.

In my opinion your desired 25-30% of stocks in international stocks is also within The range of what is reasonable.



pangeaprofile wrote: Sat Sep 11, 2021 10:55 pmThings I am also interested in learning:
- Vanguard said to do an international bond fund
I suggest not using an international bond fund.

Bernstein interview, etf.com (6/24/2014), "Don’t Bother With Int'l Bonds", link.

Larry Swedroe, seeking alpha (5/9/2014) "Should You Include International Bonds In Your Portfolio? - Part II", link.


In summary currency hedged international bonds act like U.S. bonds, have higher cost, and add little or no diversification benefit.


pangeaprofile wrote: Sat Sep 11, 2021 10:55 pm- Personal Capital said to use “Alternatives” with a recommended ratio below I
. . . . .
Alternatives (real estate, gold, international real estate
I do not suggest using alternative investments such as gold.


pangeaprofile wrote: Sat Sep 11, 2021 10:55 pm- I have read that the index fund approach, like FSKAX, can tilt to bubbles. Personal Capital recommended a more targeted allocation across sectors because of this.
I suggest using total market funds with very low expense ratios like Fidelity Total Market Index Fund FSKAX) ER 0.015%. The broad diversification reduces risk, the low expense ratio increases your net returns.

Sector funds are less diversified, more volatile, and risky.


pangeaprofile wrote: Sat Sep 11, 2021 10:55 pmTax rate: US: 32%, CA: 9.3%
. . . . .
- I am also trying to understand whether and when to do a rollover IRA conversion to Roth or some other Roth contribution.
Do not do Roth conversions in your current tax bracket. It makes no sense to pay 41.3% tax to convert now.

Do any Roth conversions after retirement when your tax bracket is likely to be lower.

What is your annual pension benefit predicted to be? What is your annual Social Security benefit projected to be? About how much do you currently have in traditional tax-deferred accounts?

Does your employer's 401k plan permit Roth contributions?


pangeaprofile wrote: Sat Sep 11, 2021 10:55 pm- REITs?
In my opinion a REIT fund like Vanguard Real Estate Index Fund Admiral Shares (VGSLX) is the only type of alternative investing (sector fund) even worth considering.

Is a good real estate fund with a low expense ratio offered in your employer's 401k plan?



pangeaprofile wrote: Sat Sep 11, 2021 10:55 pmTaxable
Symbol Description Percentage Expense Ratios
FLPSX FIDELITY LOW PRICED STOCK 9.47% (expense ratio:0.78%)
NPRTX NEUBERGER BERMAN LARGE CAP VALUE INVE 6.19% (expense ratio:0.85%
FDVLX FIDELITY VALUE 5.74% (expense ratio:0.57%
FDGRX FIDELITY GROWTH COMPANY 5.09% (expense ratio:0.83%
VFIFX Vanguard Target Retirement 2050 Fund Investor Shares 4.42% (expense ratio:0.15%
FMAGX FIDELITY MAGELLAN 3.84% (expense ratio:0.77%
IYY ISHARES DOW JONES US ETF 3.46% (expense ratio:0.20%
VTHRX Vanguard Target Retirement 2030 Fund Investor Shares 3.25% (expense ratio:0.15%
PRFDX T ROWE PRICE EQUITY INCOME 2.80% (expense ratio:0.64%
IBB ISHARES TR ISHARES BIOTECH 2.73% (expense ratio:0.46%
VTI VANGUARD TOTAL STOCK MARKET ETF 2.24% (expense ratio:
VXUS VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND 1.66% (expense ratio:
IJT ISHARES TR S&P SMALL CAP 600 GROWTH ETF 1.29% (expense ratio:0.25%
AMZN AMAZON.COM INC 1.08% (expense ratio:
IWN ISHARES RUSSELL 2000 VALUE ETF 0.57% (expense ratio:0.24%
ICF ISHARES TR COHEN STEER REIT 0.50% (expense ratio:
COP CONOCOPHILLIPS COM 0.40% (expense ratio:
SCHW SCHWAB CHARLES CORP COM 0.32% (expense ratio:
PSX PHILLIPS 66 COM 0.25% (expense ratio:
RSG REPUBLIC SERVICES INC 0.25% (expense ratio:
SLYV SPDR SERIES TRUST S&P 600 SMCP VAL 0.20% (expense ratio:0.15%
VXF VANGUARD EXTENDED MARKETS INDEX FUND 0.09% (expense ratio:0.06%
Money market 3.06% (expense ratio:
Turn off all reinvestment of distributions. Invest the cash from distributions in more shares of Vanguard Total Stock Market ETF (VTI) and Vanguard Total International Stock ETF (VXUS).

What fund firm or brokerage is this account with?

What is the UNrealized capital gain/loss status and amount for each of those investments in the taxable account?

Do you normally make donations to charity?

Please simply add this to your original post using the edit button (the pencil icon near the upper right corner of your post), it helps a lot if all of your information is in one place.

It will probably take several years to untangle this account.

Donating appreciated securities is a good way to avoid taxes and get a tax deduction while getting out of investments that you no longer wish to use.



pangeaprofile wrote: Sat Sep 11, 2021 10:55 pm401K (Contributing at 19.5)
TP93 Fidelity TARGET DATE 2040 18.01% (expense ratio:0.07%

401K Brokerage (limited to certain mutual funds)
FDEGX FIDELITY GROWTH STRATEGIES FUND 1.58% (expense ratio:0.63%
FSKAX FIDELITY TOTAL MARKET INDEX FUND 5.58% (expense ratio:0.02%
PRDMX T ROWE PRICE DIVERSD MID CAP GROWTH 1.58% (expense ratio:0.80%
What other funds besides the target date funds are offered in your employer's 401k plan? Please give fund names, tickers and expense ratios.

What fees are charged for use of the brokerage window in the 401k? (There are usually per transaction fees, annual fees, and sometimes both.)

Will your employer's 401k plan accept an incoming rollover a traditional IRA?

Please simply add this to your original post using the edit button (the pencil icon near the upper right corner of your post), it helps a lot if all of your information is in one place.



pangeaprofile wrote: Sat Sep 11, 2021 10:55 pmRollover IRA
BND VANGUARD BD INDEX FDS TOTAL BND MRKT 2.16% (expense ratio:0.04%
FBIFX FIDELITY FREEDOM INDEX 2040 INVESTOR 2.41% (expense ratio:0.12%
ILTB ISHARES CORE 10+ YEAR USD BOND ETF 0.27% (expense ratio:0.06%
What fund firm or brokerage is this account with?

If your employer's 401k plan offers good funds with low expense ratios and will accept an incoming rollover of your IRA, then it is a good idea to rollover this account into your 401k account.

That would open the way to using a Backdoor Roth IRA.


pangeaprofile wrote: Sat Sep 11, 2021 10:55 pmRoth IRA
FCNTX Fidelity® Contrafund® Fund 2.89% (expense ratio:0.85%
VXUS VANGUARD TOTAL INTL STOCK INDEX FUND ETF 3.36% (expense ratio:0.08%
VTI VANGUARD TOTAL STOCK MARKET ETF 3.24% (expense ratio:0.03%
VMFXX Vanguard Federal Money Market Fund 0.01% (expense ratio:
What fund firm or brokerage is this account with?
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
Topic Author
pangeaprofile
Posts: 8
Joined: Thu Sep 09, 2021 11:09 am

Re: Portfolio Advise please!!!

Post by pangeaprofile »

tashnewbie wrote: Tue Sep 14, 2021 7:36 am
pangeaprofile wrote: Mon Sep 13, 2021 5:00 pm
tashnewbie wrote: Sun Sep 12, 2021 10:14 am
Have you heard of the Bogleheads 3-fund portfolio? I think it would serve you well (or even a 1-fund portfolio in the tax-advantaged accounts). See: https://www.bogleheads.org/wiki/Three-fund_portfolio.

In your 401k, I’d say just use the target date fund that aligns with your desired asset allocation, taking into account the stock you hold in other accounts.

I’d transfer the Rollover IRA into the 401k, if the 401k will accept it and the 401k doesn’t have high administrative fees that aren’t listed. You have good fund options in the 401k, and moving the Rollover IRA into the 401k reduces the number of accounts you have, which should provide some simplification.
.

There's no way I would use the brokerage link to buy these funds with these high expense ratios:

401K Brokerage (limited to certain mutual funds)
FDEGX FIDELITY GROWTH STRATEGIES FUND 1.58% (expense ratio:0.63%
PRDMX T ROWE PRICE DIVERSD MID CAP GROWTH 1.58% (expense ratio:0.80%

Much better to just use a TDF that matches your desired asset allocation across all your accounts.
initiated
Topic Author
pangeaprofile
Posts: 8
Joined: Thu Sep 09, 2021 11:09 am

Re: Portfolio Advise please!!!

Post by pangeaprofile »

ruralavalon wrote: Tue Sep 14, 2021 11:00 am I suggest not using an international bond fund.

Bernstein interview, etf.com (6/24/2014), "Don’t Bother With Int'l Bonds", link.

Larry Swedroe, seeking alpha (5/9/2014) "Should You Include International Bonds In Your Portfolio? - Part II", link.

In summary currency hedged international bonds act like U.S. bonds, have higher cost, and add little or no diversification benefit.
Thanks! I wonder why Vanguard recommends.
ruralavalon wrote: Tue Sep 14, 2021 11:00 am
Do not do Roth conversions in your current tax bracket. It makes no sense to pay 41.3% tax to convert now.

Do any Roth conversions after retirement when your tax bracket is likely to be lower.

What is your annual pension benefit predicted to be? What is your annual Social Security benefit projected to be? About how much do you currently have in traditional tax-deferred accounts?

Does your employer's 401k plan permit Roth contributions?
THanks and I will have to ask.
ruralavalon wrote: Tue Sep 14, 2021 11:00 am
pangeaprofile wrote: Sat Sep 11, 2021 10:55 pm- REITs?
In my opinion a REIT fund like Vanguard Real Estate Index Fund Admiral Shares (VGSLX) is the only type of alternative investing (sector fund) even worth considering.

Is a good real estate fund with a low expense ratio offered in your employer's 401k plan?
I don't think so, updated post with choices.
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ruralavalon
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Re: Portfolio Advise please!!!

Post by ruralavalon »

pangeaprofile wrote: Fri Sep 17, 2021 11:00 am
ruralavalon wrote: Tue Sep 14, 2021 11:00 am
pangeaprofile wrote: Sat Sep 11, 2021 10:55 pm- REITs?
In my opinion a REIT fund like Vanguard Real Estate Index Fund Admiral Shares (VGSLX) is the only type of alternative investing (sector fund) even worth considering.

Is a good real estate fund with a low expense ratio offered in your employer's 401k plan?
I don't think so, updated post with choices.
I do not see a real estate fund offered in what you listed for your employer's 401k plan.

Please add the ticker symbols (if any) for the funds that you listed listed, and the expense ratios. Expense ratios are very important in selecting funds to use.

You can simply add that to your original post using the edit button, so that all of your information is in one place.

The funds that look interesting so far are:
1) RSP TOTAL US STK IN;
2) RSP INT'L STK INDEX;and
3) RSP BOND INDEX.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
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pangeaprofile
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Re: Portfolio Advise please!!!

Post by pangeaprofile »

I edited the post. I can get rid of the %s if that makes things cleaner/ easier to read.
I don't think that there are any ticker symbols.
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Re: Portfolio Advise please!!!

Post by pangeaprofile »

ruralavalon wrote: Fri Sep 17, 2021 1:58 pm
Please add the ticker symbols (if any) for the funds that you listed listed, and the expense ratios. Expense ratios are very important in selecting funds to use.

You can simply add that to your original post using the edit button, so that all of your information is in one place.

The funds that look interesting so far are:
1) RSP TOTAL US STK IN;
2) RSP INT'L STK INDEX;and
3) RSP BOND INDEX.
I think I did this!
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ruralavalon
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Re: Portfolio Advise please!!!

Post by ruralavalon »

pangeaprofile wrote: Mon Sep 20, 2021 12:54 pm
ruralavalon wrote: Fri Sep 17, 2021 1:58 pm
Please add the ticker symbols (if any) for the funds that you listed listed, and the expense ratios. Expense ratios are very important in selecting funds to use.

You can simply add that to your original post using the edit button, so that all of your information is in one place.

The funds that look interesting so far are:
1) RSP TOTAL US STK IN ER 0.013%;
2) RSP INT'L STK INDEX ER 0.055%;and
3) RSP BOND INDEX ER 0.027% .
I think I did this!
Those are very low expense ratios. You are fortunate. Those still look like the best funds to use in my opinion.

With those very low expense ratios in the core 401k plan I suggest simply NOT bothering with the BrokerageLink.

I can't tell what index is used by each fund, so don't know how fully diversified they are (e.g. I can't tell if emerging markets are included in the international stock index fund). I don't see any ticker symbols. There will not be any tickers if these are Collective Investment Trusts (CITs).

If these are CITs then your 401k materials or 401k website will contain a short fact sheet describing each CIT, which will identify the index used by each.

If you want simple all-in-one solution in your 401k account then Fidelity TARGET DATE 2040 (expense ratio:0.07%) would be a good choice instead.

However since you have a significant taxable brokerage account and are in a high tax bracket ("Tax rate: US: 32%, CA: 9.3%"), I think that the three separate index funds in your 401k will work better for tax-efficiency.

Wiki article Tax-efficient Fund Placement.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
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