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  • Help Choosing Investments

    January marked my 1 year anniversary at work. I'm 33, engaged, no kids and live in a townhome that runs me 1850/month. I paid off all loans in my first year (~160k) and invested the remainder of my money but I'm new to investing and didn't have much rhyme or reason for the way I invested. Had read WCI book and some on the website. Essentially looked for low expense ratios and went from there. Would greatly appreciate any recommendations as well as some help with a few specific questions listed below.

    I know I need an IPS. I have a makeshift one written down, but haven't solidified it because upcoming marriage will likely change things a bit. I have my goal allocation listed below. I front load and max out the 403 and 457. I do a backdoor Roth IRA. I don't spend much at all and drive a car from the early 90s (love it). Any remaining money at the end of the month gets put into the taxable account. I don't have a goal contribution amount because I invest whatever is leftover.

    403b 

    DFA US Core Equity 1 (DFEOX) – 21,684 (.19% + .20% admin fee)

    Vanguard Mid Cap Value (VMVAX) – 20,959 (.07%)

    Other Options:

    Oakmark Global Select (OAKWX)– 1.22%

    Oppenheimer International Growth (OIGIX) – .70%

    Nuveen Real Estate Securities R6 (FREGX) – .87%

    Franklin Small Cap Value (FRCSX) - .66%

    JP Morgan Small Cap Growth (JGSMX) - .83%

    Janus Henderson Small Cap Value (JDSNX) – .88%

    Lord Abbott Developing Growth (LADVX) - .60%

    Vanguard small cap index (VSCIX) - .05% + .20% admin fee

    Great West T. Rowe Price Mid Cap Growth (MXYKX) - .68%

    Vanguard Mid Cap Growth (VMGRX) - .36%

    Vanguard Mid Cap Index (VMCIX) - .05%

    T. Rowe Price Growth (PRUFX) - .52%

    T. Rowe Price Value (TRPIX) - .64%

    Black Rock High Yield Bond (BRHYX) - .54%

    Loomis Sayles Bond (LSBNX) - .58%

    Prudential Global Total Return (PGTQX) - .58%

    Putnam Convertible Securities (PCGYX) - .84%

    TCW Total Return Bond I (TGLMX) - .60% + .10% admin fee

    Vanguard GNMA Admiral (VFUX) - .11%

    Vanguard Short Term Investment Grade Admiral (VFSUX) - .10% + .20% admin fee

    457 

    Vanguard Information Technology (VITAX) – 10,753 (.10%)

    Vanguard Small Cap Index (VSCIX) – 13,147 (.05%)

    Other options - Same as 403b with additional funds below

    Black Rock Latin America (MDLTX) – 1.65%

    T. Rowe Health Sciences (THISX) - .66%

    T. Rowe Media & Telecom (TTMIX) - .67%

    Great West T. Rowe Price Mid Cap Growth (MXYKX) - .68%

    Calvert US Large Cap Core (CSXAX) - .70%

    Roth IRA – Vanguard

    Vanguard REIT Index Admiral (VGSLX) – 17,470

    Vanguard Total International Admiral (VTIAX) – 26,088

    Vanguard Total Stock Market Admiral (VTSAX) – 21,269

    Taxable – Vanguard

    Vanguard Municipal MMF (VMSXX) – 10,000 (Emergency fund)

    VTIAX – 26,952

    VTSAX – 59,116

    Apple (AAPL) – 1,754

    Total - 229,200

    Morning Star Box – not including MMF or REITs

    20 21 21

    11 10 7

    4 4 3

    Over weighted in Mid Cap and under weighted in Large Cap.

    Target Allocation – 90% stocks, 10% REITs

    - Stocks 70% US, 30% International (25% emerging markets)

    Current Allocation – 92% stocks, 8% REITs

    Stocks – 74% US, 26% Foreign (20% emerging markets)

    Questions

    1. In the 403b should I be using the vanguard mid cap value or switch to the vanguard mid cap index? Do I even need mid cap at all? I picked it because I was afraid to dump all my money into the DFA fund when most on WCI advocate for VG funds. Unfortunately no total stock market or international market available.

    2. Right now I plan on 90% stocks and 10% REITs. When I start adding bonds to my portfolio are any of the bond options in the 403b reasonable choices?

    3. I plan on adding Vanguard Emerging Markets (VEMAX) to the mix. I believe this is reasonable in a taxable account as well?

    4. I need to figure out the disbursement options for the 457 if I leave my job before retiring. If 1 time immediate disbursement, I’m assuming I should stop contributing and instead place that money in taxable account?

    5. In the 457 I have Vanguard Info Tech (VITAX). Despite it having an exceptional year I should likely exchange this fund for something that is not isolated to a sector? DFEOX, VSCIX, or some other index?

    6. I need to start saving for a down payment on a house. Where is the best place to put this? MMF, CDs, invested in taxable?


    Thanks for the help and all the great info on the site.

     

     

     

     

  • #2
    Looks good to me. Don’t worry about not having an IPS. Certainly don’t put writing one ahead of starting to investing.

    I don’t think any of those bond offerings in the 403b are great, so I would put any bonds you want to add in one of your other accounts. Emerging market is fine in taxable. Midcap is fine in your 403b. I would go with index, but it hardly matters.

    I like to keep it simple and avoid fund proliferation, so I would dump the tech fund in favor of something more broadly diversified.

    Keep cash you need in the next couple years for a down payment in high yield savings accounts or CDs. I would dump the Vanguard MMF for a high yield savings account. $10k seems kind of low for an emergency account.

    Comment


    • #3




      Looks good to me. Don’t worry about not having an IPS. Certainly don’t put writing one ahead of starting to investing.

      I don’t think any of those bond offerings in the 403b are great, so I would put any bonds you want to add in one of your other accounts. Emerging market is fine in taxable. Midcap is fine in your 403b. I would go with index, but it hardly matters.

      I like to keep it simple and avoid fund proliferation, so I would dump the tech fund in favor of something more broadly diversified.

      Keep cash you need in the next couple years for a down payment in high yield savings accounts or CDs. I would dump the Vanguard MMF for a high yield savings account. $10k seems kind of low for an emergency account.
      Click to expand...


      Thanks for the reply.

      Will swap the VG mid cap value for the mid cap index fund and get rid of the tech fund in favor of one of the other VG funds or the DFA core equity fund.

      The E-fund is modest, but it was difficult for me to dump thousands into an E-fund and have it sit there meanwhile having minimal money in the market. With minimal fixed expenses, currently single, and covered with disability and umbrella insurance I couldn't really imagine a scenario where I would need more than 10k + my next paycheck. Will work to build the fund as money becomes available.

      I was using the MMF as a savings account because I saw WCI mention he was doing the same. Will open a high yield savings account and probably split money between the 2 for a downpayment on a house.

      Thanks again.

      Comment

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