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  • portfolio feedback

    I am trying to make some changes to my portfolio and would love to get your feedback on my portfolio and the location of the assets
    so far i have been using the fidelity freedom funds 2045 fund (FFKGX) (ER 0.64) in my 401k and 457 at fidelity.
    I also have roth IRA account for myself and my wife, plus a taxable account at Vanguard. I want to take the money out of the Fidelity freedom funds and use the low cost index funds. I would appreciate your feedback regarding my plan


    Age: 40
    Desired Asset allocation: 80% stocks / 20% bonds
    Desired International allocation: 33% of total stocks

    I would like the following allocation

    REIT Vanguard REIT index fund 7.5% (ER 0.12) (as total stock market has 3% REIT, this will get me around 10% REIT overall)

    Remaining 72.5% of stocks are divided as follows

    US stocks 48.5% of total portfolio will be invested in vanguard total stock market index fund (0.04) or Fidelity Total Stock market index FSTVX (ER 0.045)

    24% international stocks will be invested in Vanguard Total international stock market index fund (0.11)

    For 20% Bonds I will use Vanguard total Bond market institutional index fund (available in 401k/457, ER 0.04)

    Now regarding the location of the different funds in different accounts, here is what I am thinking

    REIT index fund goes in the ROTH IRAs

    Extra REIT amount which did not fit into ROTH IRA goes into 401K ( I can use fidelity brokerage link to access fidelity REIT index fund FSRVX ER 0.09)

    457 will hold the Vanguard total Bond market index institutional

    401 K will hold the following funds
    – Vanguard total Bond market index fund institutional VBTIX (ER 0.04)
    – Amount left will be invested in Fidelity Total Stock market index fund FSTVX (ER 0.045)

    HSA (small balance) will be invested in Vanguard REIT index institutional (ER 0.10 + 0.396 (extra fee charged by health equity) total ER 0.496)

    what do you think about this portfolio?

    is it ok to invest all the bond allocation into the Vanguard total bond market fund?

    I appreciate your feedback


  • #2
    Confused about this post.  Seems to be a repost of a current thread with slightly different numbers for stock/bond allocation.


    • #3
      You could start by dissecting the target date fund into its components and just holding those for a fraction of the price.


      • #4

        You could start by dissecting the target date fund into its components and just holding those for a fraction of the price.
        Click to expand...


        Why are you paying 64 basis points when you could be paying 10?


        • #5
          That is exactly the reason to move away from the target date fund to index fund.

          Can you plz provide any feedback regarding the portfolio so that i can move away from the target date fund


          any suggestions/feedback would be welcome



          • #6
            It looks like FFKGX is approx 65% US stock, 30% Foreign stock (20% developed mkt, 10% emerging mkt), and 5% bonds.

            I know Schwab index ETFs best (Vanguard has excellent ones too) so that's what I will suggest if you want to replicate the TDF:

            • SCHB 50% (US total stock market index)

            • SCHA 15% (US small cap stock index)

            • SCHF 20% (Foreign developed market stock index)

            • SCHE 10% (Emerging market stock index)

            • SCHZ 5% (US aggregate bond index)

            The blended ER on that allocation will be well under 10 basis points.


            • #7
              thanks for your reply but my goal is not to replicate the target date fund

              goal is to come up with a suitable portfolio using low cost index funds so that i can move away from the target date retirement funds

              can you plz provide any feedback regarding the portfolio plan i have outlined in the original post

              i welcome any feedback/suggestions



              • #8
                Just shift the ETFs to whatever floats your boat on allocation.  Everyone here has their own favorite flavor, but ultimately getting into those kind of weeds on % allocation is your decision.

                Personally, 80 stock with 33 international / 20 bonds - is kind of weird mix of aggressive yet conservative at age 40 -- like you think Europe / China / or emerging markets (very wide range of what international represents) is more stable that the US?    vs 20% bonds is conservative (vs going junk bond investing).

                It's hard to give feedback on allocation of portfolio beyond general basics and broad strokes. -- like strategies of lower fees and options of current portfolio.



                • #9
                  I am assuming that you may not have access to all the stock funds in the tax deferred accounts managed by the institution. If you have, then you can reduce your total US stock market allocation to 30% to increase some small cap stocks. It will come with more growth potential but with more volatility.

                  In the Vanguard taxable account, you don't have to have any bonds. You can have tax managed stock accounts as well as some international stock funds for foreign tax credit.


                  • #10
                    I dont understand why you think it is weird mix of aggressive but conservative

                    vanguard currently recommends currently 40% international stocks. I am using 33%. I have seen numbers from 20 to 40% being recommended.

                    for the bonds, i chose 20%. WCI and other ppl recommend atleast 20 to 25%. I was using 10% but then after reading different forums thought that may be i am too aggressive.

                    I am interested in hearing your thoughts


                    • #11
                      I do have access to other stock funds through the brokerage link option in my 401 k.

                      However because my retirement accounts are much smaller as compared to my taxable account, when i ran numbers for even a 10% small value tilt, i realized that i will run out of tax protected space within the next year or 2 and then will have to either hold muni's in the taxable account or small value in the taxable.

                      so i thought may be i should keep it simple and just use total stock market instead in the taxable and keep the bonds and REIT index in the retirement accounts.

                      Does that sound a reasonable way of thinking about it?  I would appreciate your input