Author Topic: Asset allocation/suggestions  (Read 3002 times)

FastStache

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Asset allocation/suggestions
« on: July 31, 2014, 03:33:08 PM »
This is my current allocation

401K - Account 1 Investments -  42K
Board Market Bond - 5%
High Yield Bond - 4%
S&P 500 Indexed Equity - 64%
Small/Mid Cap Equity Fund - 6%
MSCI Indexed Fund (international) - 14%
Emerging Markets Indexed Fund (international) - 5%
Company Stock - 2%

401K - Account 1 Contributions - 25% of salary
Board Market Bond - 10%
S&P 500 Indexed Equity - 65%
Small/Mid Cap Equity Fund - 10%
MSCI Indexed Fund (international) - 10%
Emerging Markets Indexed Fund - 5%
Company Stock - 4% of salary (I periodically rebalance this into other funds)

401K - Account 2 Investments -  17K
Board Market Bond - 10%
S&P 500 Indexed Equity - 60%
Small/Mid Cap Equity Fund - 15%
MSCI Indexed Fund (international) - 15%

401K - Account 2 Contributions - 4% of salary
Board Market Bond - 10%
S&P 500 Indexed Equity - 65%
Small/Mid Cap Equity Fund - 10%
MSCI Indexed Fund (international) - 15%
Company Stock - 4% of salary (I periodically rebalance this into other funds)

Roth IRA - 22.5K
VDIGX Dividend Growth Fund - 3.1K
VFICX Bond Fund - 6K
VFIFX 2050 Target Fund - 3.5K
VMMXX Prime money market - 1K
VTENX 2010 Retirement Fund - 1K
VTSMX Total Stock Market - 3.1K
VTTVX 2025 Target Fund - 4.6K

Outstanding Loan of about 32K on 401k, waiting on 4 month period before I can pay it back.

Current home value - 265K
Mortgage - 230K
Net - 35K minus closing costs

I am maxing out my 401K and Roth IRA contributions.

Any thoughts on my current portfolio and where I could change some things or maybe add some REITs, etc?

matchewed

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Re: Asset allocation/suggestions
« Reply #1 on: July 31, 2014, 04:01:03 PM »
You seem to be all over the place. I'd sit down and draft an investment policy statement, while doing so go over your AA and figure out why you have each investment. Ask yourself why you have the investment, what is it giving you, what are the benefits, what are the risks? I count 17 different funds. Do you need them all to get your desired diversification?

Without knowing your timeline, risk tolerance, and anticipated plans/future there is nothing we can do to really help all that much.

FastStache

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Re: Asset allocation/suggestions
« Reply #2 on: August 01, 2014, 10:29:19 AM »
I have been slowly getting rid of funds I don't want, but it has been a slow process.

401K Funds to have - these have low fees comparted to others in the 401K plan
Broad Market Bond
S&P Indexed Equity
Small/Mid Cap Equity (everything in a total stock fund minus what is the s&p 500)
MSCI Indexed Fund (International)
Emerging Markets Indexed Fund (International)

Roth - once my balance is high enough (early 2015 this will happen)
VTSAX
VFICX
possibly a REIT with future contributions (thinking of the REIT higher since the fee is much lower than the 401K)

Allocation - unclear at the moment
80% stocks
20% bonds

Stock Allocation - unclear at the moment
80% US
20% International

Timeline - 10-15 years to FI, not sure on ER time frame

Risk Tolerance - I'm okay riding big up and down waves for the next 5 years

Plan
1. Keep maxing 401k and roth ira. In a couple of years I might switch to a Traditional IRA to get a higher tax benefit now.
2. Pay off debt except house. Not much left since we will trade in the new car soon.
3. Invest post-tax money in more stocks, rentals, etc. This is still up in the air.

matchewed

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Re: Asset allocation/suggestions
« Reply #3 on: August 01, 2014, 11:34:24 AM »
Allocation - unclear at the moment
80% stocks
20% bonds

Stock Allocation - unclear at the moment
80% US
20% International

Timeline - 10-15 years to FI, not sure on ER time frame

Risk Tolerance - I'm okay riding big up and down waves for the next 5 years

Couple things here before you get into the which funds should I keep questions. You need to clarify those unclear things before you can decide which funds to invest in, or you're just going to have a mess of funds on you hands...

Remember your timeline isn't just 10-15 years, you're investing for life. Not that your AA has to remain static for life but that you may want to analyze a bit beyond the five year time frame as that is a relatively short time. Just saying "I'm okay with big swings" doesn't mean much. Do you understand the risks? That's the question you have to answer, not am I okay with volatility. Although volatility is one risk with certain investments.

Sit down and construct an Investment Policy Statement. Revisit it as you get more educated in investments. I'd start with simple and then go complex, not vice versa.

TomTX

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Re: Asset allocation/suggestions
« Reply #4 on: August 01, 2014, 12:07:17 PM »
Way too damn complicated.

usmarine1975

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Re: Asset allocation/suggestions
« Reply #5 on: August 01, 2014, 12:28:49 PM »
I agree with the poster who stated you need to have an investment policy statement.  A simple google search of asset allocation will give you a broad spectrum of free test you can take to find your risk tolerance if you answer honestly.  If you have a spouse she should take her own.  Your investments should line up with that investment plan and asset allocation.  You should be able to figure out your current allocation and where you need to make changes.


surfhb

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Re: Asset allocation/suggestions
« Reply #6 on: August 01, 2014, 08:56:08 PM »
I don't see anything that complicated.   You have a majority in your large caps with some mid and small caps along with some international.   

The only thing I'd change would be your ROTH.   A simple 2 or 3 fund portfolio is all you need there

It's a pretty well thought out portfolio IMO based on what funds are available to you.   Pay off that loan bro!!  :)
« Last Edit: August 01, 2014, 08:59:37 PM by surfhb »

FastStache

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Re: Asset allocation/suggestions
« Reply #7 on: August 04, 2014, 07:58:15 AM »
I don't see anything that complicated.   You have a majority in your large caps with some mid and small caps along with some international.   

The only thing I'd change would be your ROTH.   A simple 2 or 3 fund portfolio is all you need there

It's a pretty well thought out portfolio IMO based on what funds are available to you.   Pay off that loan bro!!  :)

I do plan on changing the Roth when I do my 2015 contribution to just VTIFC and VTSAX, but they have a 3K and 10K min. The accounts are split in two between me and my wife.

The funds are pretty much what you said, large caps with mid and small cap, international stock and bonds.