Author Topic: Reallocate Vanguard funds? Critique my portfolio.  (Read 3773 times)

bo_knows

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Reallocate Vanguard funds? Critique my portfolio.
« on: October 04, 2012, 11:48:30 AM »
Not much of my stash is in post-tax funds, but I am looking for advice with it. I started my account before I was more versed on the market.  I typically have a moderate/high risk tolerance, but to be honest I have been looking into something simple like the Bogleheads 3-fund portfolio.

I have never actually sold anything in this account in the 5 years I've had it.  I just keep dumping savings in every month.  Should I rebalance and take the capital gains hit, or just keep plugging along?  The only fund I worry about really is the Windsor fund. 0.41% expense ratio is a tad high for a Vanguard fund... though it has been on a tear lately.

Vanguard Windsor Fund Investor Shares (VWNDX)    - 28.5%
Vanguard Intermediate-Term Investment-Grade Fund Investor Shares (VFICX) - 11.6%
Vanguard Small-Cap Growth Index Fund Admiral (VSGAX) - 59.7%

Thoughts? Questions?

gestalt162

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Re: Reallocate Vanguard funds? Critique my portfolio.
« Reply #1 on: October 04, 2012, 12:14:45 PM »
Why the choice of funds? All the Bogleheads/MMM portfolios I've seen use the total market funds instead of more specialized ones like Windsor or Small Cap.

Capital gains tax is low. I'd say take the hit to move your money to funds with an expense ratio under 0.15%.

TLV

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Re: Reallocate Vanguard funds? Critique my portfolio.
« Reply #2 on: October 04, 2012, 12:27:06 PM »
Windsor is an actively managed fund, isn't it? That's why the expense ratio is higher than other Vanguard funds (though still low for an active fund).

bo_knows

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Re: Reallocate Vanguard funds? Critique my portfolio.
« Reply #3 on: October 04, 2012, 12:43:27 PM »
Why the choice of funds? All the Bogleheads/MMM portfolios I've seen use the total market funds instead of more specialized ones like Windsor or Small Cap.

Capital gains tax is low. I'd say take the hit to move your money to funds with an expense ratio under 0.15%.

As I mentioned, I chose those funds before I was properly informed (a couple of years ago) and just kept dumping into them.


Catbert

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Re: Reallocate Vanguard funds? Critique my portfolio.
« Reply #4 on: October 04, 2012, 01:35:20 PM »
I'm not familiar with those funds so I can't comment about them in particular.

As a general rule I don't sell and pay capital gains in order to rebalance.  Instead, just allocate new contributions to the funds which need a higher percentage of your portfolio.  Overtime it will balance out.  Or sell/buy things in your IRA/401k so that your overall portfolio percentages are where you want them to be.  If you're retired or your balances are too large for these techniques to work  then you can make your charitable contributions in the form of appreciated stock/bonds/mutual funds.  No cap gains tax due.  Then use the cash you would have donated to charity to buy more stocks/bonds/mutual funds.