Author Topic: Portfolio might be a mess. Really need advice.  (Read 2950 times)

Travis

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Portfolio might be a mess. Really need advice.
« on: February 05, 2014, 08:28:38 PM »
I'm late to the show for getting into the investing game.  I'm 33, I make $110k/year and save 30%, but spent my 20s slowly accumulating $150k in a money market, putting a few thousand a year into TSP, and maxing out my Roth IRA (but only in a single fund).  Last summer I started transferring huge amounts of cash to a new portfolio in USAA based on their recommendations.  It was a "moderate" mix of bonds and stock funds in about 7 different funds and I elected to manage it myself which is to say I stared at it for 6 months and it stayed pretty flat.  Last month I shook it up to keep my overall stock portfolio moderate, but my Roth (5 funds now) more aggressive.  I also chose to have USAA manage both of them it to see if I get better returns.  They charge a 1% management fee. I'm now in 19 funds in a wide mix of US and International bonds, equities, and stock funds.

My reason for writing is I loaded everything into Personal Capital last night and this morning I got a series of messages saying 19% of my eventual earnings will go to fees and 14 of my funds have expense ratios of .9 to 1.37%.  All I read on MMM is people talking about index funds.  USAA has four of them, but I'm not in any of them.  I'm worried that I made a big mistake with my choices so far and the conflicting advice I've read recently.  My portfolio (TSP, various funds, and Roth IRA) are worth about $300k.  I still have $45k in a money market that I haven't moved yet, and $26k in a high-load mutual fund that I'm in the middle of transferring to USAA from another institution so I can do something else with it.  If anyone has any advice or insights I would really appreciate it.

wtjbatman

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Re: Portfolio might be a mess. Really need advice.
« Reply #1 on: February 06, 2014, 06:21:03 AM »
You need to simplify and get out of those high expense fee funds. Start reading about Index investing here at the Bogleheads Wiki. Use this link to get started. You will likely want to end up with something like the Three-fund Portfolio. That's right, you will go from having 19 funds with expense ratios ranging from .9% to 1.37% to three index funds with an expense ratio of .05% (1/20th of what you were paying before)

soccerluvof4

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Re: Portfolio might be a mess. Really need advice.
« Reply #2 on: February 06, 2014, 08:23:27 AM »
^ +1. I use a 4 fund allocation but never-the-less he's spot on. 19 overpriced funds is crazy. I personally prefer Vanguard Index funds.

c12mintz

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Re: Portfolio might be a mess. Really need advice.
« Reply #3 on: February 06, 2014, 07:34:40 PM »
USAA is an amazing bank and insurance company, but they are a marginal brokerage and a horrible mutual fund source.

You can use something like Scottrade and get free ETF trades and go with 3-5 index funds from Vanguard.


Travis

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Re: Portfolio might be a mess. Really need advice.
« Reply #4 on: February 07, 2014, 05:49:51 PM »
Spent the last couple days with the Bogleheads.  Great group of people.  I spent 2 hours on the phone with Vanguard today getting the ball rolling on liquidating my USAA accounts and getting everything moved over.  I also opened a ROTH IRA for my wife which I had no idea was even possible until one of the Bogleheads pointed out I didn't have one.  The CSR at Vanguard and the Bogleheads were almost in line with allocation and fund recommendations.  I'm still impressed she stayed on the phone with me so long (including a 3-way call with USAA).  I'm really looking forward to getting this going.

soccerluvof4

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Re: Portfolio might be a mess. Really need advice.
« Reply #5 on: February 08, 2014, 05:10:29 AM »
Thats awesome! I found the Vanguard people very resourceful and there website very easy to move around not to mention the fee's are very good. They have all the products for the most part you will need