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Background: Early/mid 30's. No student debt. Specialty. Student loans paid off. ~1mil NW and above average salary so doing well there. Into year 3 as attending at the same job right out of training. Family life stable with wife and 2 kids (no more planned). No plans to move again in the future as near family, etc...
Previous Asset Allocation (been that way for years since making IPS): 90/10 stocks to bonds (60 US/30 international with slight tilt to SCV and REIT). Have stuck to that plan for about 4 years through end of residency and early attending life. Had never been through a bear market though with long run up of stock market. Also traditionally kept 3-6 months of living expenses in Efund (Ally bank), usually closer to 6 months.
What changed:
-Been through first bear market (coronabear) and didn't have any panic selling despite loss of income during the period. Actually shifted more from bonds to stocks at the low point to maintain allocation.
-Bought the "forever" house in July as timing was right with job/life despite bear market. House is fantastic (walk to work in suburbs), neighborhood is great, and cost was fantastic as well (mortgage < 1x/income in MCOL area). Got a mortgage putting 20% down with great rate and no points: 15 year fixed at 2.625% (the 15 year fixed rather than 30 won't stretch our budget so we went that route to be debt free sooner).
Question/thoughts: WCI always says to be more conservative until going through first bear market. Now that I've done that and have our house purchased, I was considering a few things and wanted to get opinions from people smarter than I.
-AA: was considering making AA 100/0 stocks to bonds. I realize 100/0 and 90/10 doesn't change a whole lot in the grand scheme of things but with low expected bond rates it seems silly to invest there now that I have a mortgage which I elected to pay off sooner (15yr vs 30 yr fixed). Or does it still make sense to keep bonds in one's portfolio.
-Efund: now that we're homeowner's, the EFund surely will have to get increased for unexpected items that break in the home. For those who transitioned from renter's, how much did they increase their E-funds after buying. For instance, if you previously kept 6 months living expenses, did you now have 9 months...or did you add an extra % amount to what your possibility monthly spend would be. There will naturally be a higher monthly outflow for us as 15yr mortgage in nicer home > previous rent we were paying but it's the unexpected costs that are now variable since we're the new landlords essentially.
-Mortgage: along the lines of the potential AA change and removing bonds, would you throw more money at the loan to payoff even sooner? For reference, we're comparing taxable account investing vs additional mortgage payoff as I already max out all other tax advantaged space and have no other debts.
Appreciate the advice.
Previous Asset Allocation (been that way for years since making IPS): 90/10 stocks to bonds (60 US/30 international with slight tilt to SCV and REIT). Have stuck to that plan for about 4 years through end of residency and early attending life. Had never been through a bear market though with long run up of stock market. Also traditionally kept 3-6 months of living expenses in Efund (Ally bank), usually closer to 6 months.
What changed:
-Been through first bear market (coronabear) and didn't have any panic selling despite loss of income during the period. Actually shifted more from bonds to stocks at the low point to maintain allocation.
-Bought the "forever" house in July as timing was right with job/life despite bear market. House is fantastic (walk to work in suburbs), neighborhood is great, and cost was fantastic as well (mortgage < 1x/income in MCOL area). Got a mortgage putting 20% down with great rate and no points: 15 year fixed at 2.625% (the 15 year fixed rather than 30 won't stretch our budget so we went that route to be debt free sooner).
Question/thoughts: WCI always says to be more conservative until going through first bear market. Now that I've done that and have our house purchased, I was considering a few things and wanted to get opinions from people smarter than I.
-AA: was considering making AA 100/0 stocks to bonds. I realize 100/0 and 90/10 doesn't change a whole lot in the grand scheme of things but with low expected bond rates it seems silly to invest there now that I have a mortgage which I elected to pay off sooner (15yr vs 30 yr fixed). Or does it still make sense to keep bonds in one's portfolio.
-Efund: now that we're homeowner's, the EFund surely will have to get increased for unexpected items that break in the home. For those who transitioned from renter's, how much did they increase their E-funds after buying. For instance, if you previously kept 6 months living expenses, did you now have 9 months...or did you add an extra % amount to what your possibility monthly spend would be. There will naturally be a higher monthly outflow for us as 15yr mortgage in nicer home > previous rent we were paying but it's the unexpected costs that are now variable since we're the new landlords essentially.
-Mortgage: along the lines of the potential AA change and removing bonds, would you throw more money at the loan to payoff even sooner? For reference, we're comparing taxable account investing vs additional mortgage payoff as I already max out all other tax advantaged space and have no other debts.
Appreciate the advice.
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