Author Topic: Lazy Portfolio's Help  (Read 1782 times)

irishnick23

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Lazy Portfolio's Help
« on: February 10, 2017, 09:22:10 AM »
My wife and I both have 401k's with Fidelity and we are lazy investors. I'd love to hear some advice on our allocations. We are 25 so happy to take on a lot of risk (9/10 on the theoretical risk scale). The fund options we have chosen are the only index funds available in our portfolios. The only other fund available to both of us without high fees (over 1%) worth considering is the Fidelity 2055 Target Date (.77%). I'd love to get people's thoughts on both our allocations and their experience with the various funds in our portfolios:

Mine:
FUSEX (50%)
FSEVX (13%)
FSGDX (27%)
FBIDX (10%)

Hers:
FXSIX (50%)
FSEVX (13%)
VFWIX (27%)
FSITX (10%)


Exflyboy

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Re: Lazy Portfolio's Help
« Reply #1 on: February 10, 2017, 10:16:34 AM »
Personally at 25 with a lot of time to earn you need to move your risk tolerance to 10/10. By this I DON't mean invest in individual stocks, but it does mean you should probably go 100% on a low cost index fund with broad exposure.

You can also choose a fund with say a 10% exposure to foreign stocks, but most American multinationals these days are exposed in foreign markets anyway.

So personally I would be looking for a single fund (with the lowest fees) that looks most like the S&P 500 or Russell 1000 and put everything in there.

Max out your contributions if you can and don't look at it for 10 years.. Of course if the market is climbing its fun to add your net worth... But if its tanking, turn the TV off and stick your fingers in yours and congratulate yourself your buying more of the fund for cheap..:)

Disclosure: I am personally fairly aggressive. I'm 55 with about 75/25 (stock/(Bond+cash)) and FIRED.

Tyler

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Re: Lazy Portfolio's Help
« Reply #2 on: February 10, 2017, 10:57:18 AM »
Hi Irishnick.  Dealing with limited 401k options is a very common issue.  Luckily, you have some pretty good funds available.
For reference, here's how your portfolio has performed over every investing timeframe since 1970:



Offhand, your portfolio seems very reasonable.  If it's working for you, there's no need to change a thing.  But if you have concerns, you can play with other options and charts here to see if some other combination is more desirable: https://portfoliocharts.com/calculators/

The key concept is to not focus so much on the fund but on the index it tracks.  For reference:

FUSEX & FXSIX are large cap blend
FSEVX is an extended market fund, but small cap blend should be reasonably similar for modeling purposes
FSGDX and VFWIX are total international
FBIDX and FSITX are total US bond market

Do you also have an IRA or taxable brokerage account outside of your 401ks?  If so, you might want to think of your investments as a single portfolio across all of your accounts.  That's a good way to diversify your overall asset allocation without feeling forced into poor 401k fund options. 

VoteCthulu

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Re: Lazy Portfolio's Help
« Reply #3 on: February 10, 2017, 12:39:59 PM »
As a lazy allocation, I think it's fine the way it is. Don't change it without first writing an IPS and you should be fine.

irishnick23

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Re: Lazy Portfolio's Help
« Reply #4 on: February 11, 2017, 10:10:05 AM »
Hi Irishnick.  Dealing with limited 401k options is a very common issue.  Luckily, you have some pretty good funds available.
For reference, here's how your portfolio has performed over every investing timeframe since 1970:



Offhand, your portfolio seems very reasonable.  If it's working for you, there's no need to change a thing.  But if you have concerns, you can play with other options and charts here to see if some other combination is more desirable: https://portfoliocharts.com/calculators/

The key concept is to not focus so much on the fund but on the index it tracks.  For reference:

FUSEX & FXSIX are large cap blend
FSEVX is an extended market fund, but small cap blend should be reasonably similar for modeling purposes
FSGDX and VFWIX are total international
FBIDX and FSITX are total US bond market

Do you also have an IRA or taxable brokerage account outside of your 401ks?  If so, you might want to think of your investments as a single portfolio across all of your accounts.  That's a good way to diversify your overall asset allocation without feeling forced into poor 401k fund options.


I have a Roth IRA with Wealthfront (it's under $10,000 so no Wealthfront fees). I finish paying off my student loans in June and once that happens I'll be maxing out the IRA. Once it hits $10,000 I'll move the IRA to either Betterment or Vanguard and keep maxing out.