The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: minimustache1985 on January 07, 2015, 01:57:04 PM
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I just verified that I can contribute to a Roth without the backdoor for 2014, and will be adding $5500 to my Vanguard Roth IRA this week. I'm trying to decide if I should add another (likely international or small cap) fund, or just even out my current funds buying the ones I have less of.
I am 29, have a 10+ year time frame, and am not terribly risk averse but shy away from 100% stocks. Vanguard profile is a 90/10 AA right now, having started with 80/20 when I first opened it and gradually increasing to current as I added more equity focused funds.
My Roth holdings are:
Roth: VDEQX, Diversified Equity Fund ~13.3k
Roth: VDIGX, Dividend Growth Fund ~15.1k
Roth: VGHCX, Health Care Fund (Investor Shares) ~3.5k
Roth: VGSTX, STAR fund, ~8.3k (very open to reallocating this, it's a bit of a relic from when I opened the account as it has the lowest minimum)
For full picture, the rest of my holdings are:
Vanguard acct Taxable: VFIAX, S&P Index (Admiral Shares) ~14.9k
Vanguard acct Taxable: VIMAX, Mid-Cap Index (Admiral Shares) ~16k
Vanguard acct Taxable: VWELX, Wellington (Investor Shares) ~13.8k
Old Fidelity 401k: Fidelity Target 2040 Retirement ~37.8k
Old Fidelity 401k: Fidelity S&P 500 Index ~28.1k
Old Fidelity 401k: Fidelity Russell 2000 Index ~16.7k
Old Fidelity 401k: Fidelity International Index ~14.6k
Old Fidelity 401k: Company stock (oil) ~8.9k
Old Fidelity 401k: Fidelity Target 2050 Retirement ~5.2k
Old Fidelity 401k: Fidelity Emerging Markets Index ~5k
Current 401k: VBINX, Vanguard Balanced Index Inv, ~23k
Current 401k: VFINX, Vanguard 500 Index Investor, ~20.8k
Current 401k: LADYX, Lord Abbett Developing Growth I ~12.5k (.76% ER)
Current 401k: RERGX, American Funds EuroPacific Gr R6 ~10.5k (0.49% ER)
Current 401k: VEXMX, Vanguard Extended Market Idx ~12.2k
Questions:
1) Should I add a new fund to the Roth or add to what I have existing? If new any recommendations beyond the Total International Stock Index or Small Cap Index?
2) Should I bother rolling over my old 401k? The expense ratios in that account are all under 0.1% with the exception of the emerging market index (0.18%). If so, should I wait for oil prices to recover some since company stock makes up 7.5% of that account?
3) Should I be looking to get the small cap/international exposure elsewhere overall? My current 401k ERs for those (the only noted) are higher than optimal but not awful. This is part of why I'm considering adding an international or small cap vanguard fund to my Roth. I can't remember why I chose RERGX over VDVIX in the first place, perhaps I should change international funds within the 401 regardless of what I do with the Roth?
4) Should I ditch the STAR fund? That plus some 2014 contribution could get me the admiral shares of the Small Cap Index, or get me closer to admiral on another fund (unfortunately both the international and health still require 50k invested for admiral).
I know I've already asked a lot, but if anyone has other recommendations for my current 401k I'd also welcome them, these are what I have access to in it (ignoring a few high cost options I can't see myself using):
Invesco Global Real Estate Income R5-Specialty-ASRIX
American Funds EuroPacific Gr R6-International Funds-RERGX
Vanguard Developed Markets Index Inv- International Funds- VDVIX
Lord Abbett Developing Growth I-Small Cap Funds-LADYX
Vanguard Extended Market Idx-Mid Cap Funds-VEXMX
Vanguard 500 Index Investor-Large Cap Funds-VFINX
Vanguard Index Trust -Total Stock Market-Large Cap Funds-VTSMX
Vanguard Windsor II-Large Cap Funds-VWNFX
Vanguard Balanced Index Inv-Balanced Funds-VBINX
Dodge & Cox Income-Bond Funds-DODIX
Vanguard GNMA INV-Bond Funds-VFIIX
Vanguard Total Bond Market Index-Bond Funds-VBMFX
Vanguard Prime Money Market Inv-Money Market Funds-VMMXX
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Update:
Went ahead and split the Roth contribution up as 3000 Diversified Equity, 2500 Health Care Fund. I also exchanged a bit of the Mid-Cap taxable to Wellington since the Roth contributions are equity funds, and will be exchanging the RERGX for the lower ER VDVIX within my 401k. Leaving the Fidelity account alone.
I'm also leaning towards exchanging the STAR fund for a Vanguard small cap, and moving the overpriced small cap in my 401k to the Vanguard Balanced to compensate.
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Am I counting right, 19 different holdings?
That is a lot, when many of those are already indexes. I would try to get down to 3-5 holdings across everything. Generally easier to manage, easier to re-balance, etc. You aren't gaining that much by having so many funds, and you have a much harder time keeping your allocation on track.
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Your 401k's (both old and new) are goofy. In one 401k you hold two different target retirement funds and in the other a balanced fund, yet also invest in other random funds in both accounts. That is a lot of unnecessary overlap and complication.
Depending on what your desired AA is, your old 401k should probably only be one fund (one of those target retirement funds), and ditto with the new 401k (the vanguard balanced fund). Or, if the new 401k has the right funds (and I see at least an S&P 500 and extended market index fund), you could make your own portfolio of low cost index funds.