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  • Feedback on our allocations?

    My wife (35) and I (42) just started contributing to our 401k plan and have the following allocation. I have 100k in my IRA and 30k in her IRA that we will be rolling in to the new plan. Going forward her contributions will be higher (max allowed) than mine. Potentially looking at another 20 years in working and slightly geared the portfolio to growth. I have a taxable account separately that is 100% in individual stocks at this point and I did not follow any defined strategy for that account. We are planning on starting a 529 for our kids and have a mortgage, car loan. We are in the top tax bracket at this point with a effective fed tax rate of 31% and live in state with no state income taxes. Appreciate your feedback.

    VIGAX 20%

    VTIAX 15%

    VMGMX 25%

    VSGAX 25%

    VWEAX 15%

    Thanks

    HI.

  • #2
    You will receive more feedback if you'd name and characterize those funds.  I am too lazy to look them up myself.

    Comment


    • #3




      You will receive more feedback if you’d name and characterize those funds.  I am too lazy to look them up myself.
      Click to expand...


      I agree that jz is too lazy and so am I.

      Comment


      • #4

        I looked them up.  I own a couple of them.


        VWEAX hi yield corp bond fund.  This is also called a junk bond fund.  It will behave like a stock.  Go with BND.


        VIGAX   Growth index.


        VMGMX.  Midcap growth index.


        VSGAX. sm cap growth index.


        Vtiax. Total international index.  Great fund. I own it.


        The problem is what if value outperforms.  You need growth plus value.  Small cap value is the best performing sector.  You might want start with VTSAX.  Simply a total stock index, add VTIAX, and BND and you have a classic 3 fund portfolio.

        Comment


        • #5


          My wife (35) and I (42) just started contributing to our 401k plan and have the following allocation. I have 100k in my IRA and 30k in her IRA that we will be rolling in to the new plan. Going forward her contributions will be higher (max allowed) than mine. Potentially looking at another 20 years in working and slightly geared the portfolio to growth. I have a taxable account separately that is 100% in individual stocks at this point and I did not follow any defined strategy for that account. We are planning on starting a 529 for our kids and have a mortgage, car loan. We are in the top tax bracket at this point with a effective fed tax rate of 31% and live in state with no state income taxes. Appreciate your feedback. VIGAX 20% VTIAX 15% VMGMX 25% VSGAX 25% VWEAX 15% Thanks HI.
          Click to expand...



          why growth? it might not grow the most.


          and are you sure about your tax rate? im in cali with no mortgage and im not even close to 31% effective. 

          Comment


          • #6

            OP, start with something like...


             


            25% VBTLX (Vanguard Total Bond Index)


            25% VTSAX (Vanguard Total (US) Market Index)


            25% VTIAX (Vanguard Total International Index)


            25% VSIAX (Vanguard Small Value Index)


             


            Move the percentages up and down to suit your tastes and preferences, ending up at 100%


             

            Comment


            • #7



              OP, start with something like…


               


              25% VBTLX (Vanguard Total Bond Index)


              25% VTSAX (Vanguard Total (US) Market Index)


              25% VTIAX (Vanguard Total International Index)


              25% VSIAX (Vanguard Small Value Index)


               


              Move the percentages up and down to suit your tastes and preferences, ending up at 100%


               


              Click to expand...



              I do want something in Mid Cap as well. How about


              15% VBTLX (Vanguard Total Bond Index)


              20% VTSAX (Vanguard Total (US) Market Index)


              15% VTIAX (Vanguard Total International Index)


              25% VIMAX (Vangaurd Mid-Cap Index Fund)


              25% VSMAX (Vangaurd Small Cap Index Fund)


               



              Peds wrote:




              Click to expand…



              why growth? it might not grow the most.


              and are you sure about your tax rate? im in cali with no mortgage and im not even close to 31% effective. 


              Click to expand...



              Yes. Just filed taxes last week.


               


              Thanks


              HI

              Comment


              • #8

                Now you have corrected the value/growth problem and replaced it with a portfolio that is too heavily weighted to small and midcap funds.  Both VTSAX and VSMAX have some midcaps.  I would recommend you increase Vtsax and Vtiax and decrease the small and midcap.  Once you have a lot of money you can start tilting.

                Comment


                • #9






                  OP, start with something like…


                   


                  25% VBTLX (Vanguard Total Bond Index)


                  25% VTSAX (Vanguard Total (US) Market Index)


                  25% VTIAX (Vanguard Total International Index)


                  25% VSIAX (Vanguard Small Value Index)


                   


                  Move the percentages up and down to suit your tastes and preferences, ending up at 100%


                   


                  Click to expand…



                  I do want something in Mid Cap as well. How about


                  15% VBTLX (Vanguard Total Bond Index)


                  20% VTSAX (Vanguard Total (US) Market Index)


                  15% VTIAX (Vanguard Total International Index)


                  25% VIMAX (Vangaurd Mid-Cap Index Fund)


                  25% VSMAX (Vangaurd Small Cap Index Fund)


                   



                  Peds wrote:




                  Click to expand…



                  why growth? it might not grow the most.


                  and are you sure about your tax rate? im in cali with no mortgage and im not even close to 31% effective. 


                  Click to expand…



                  Yes. Just filed taxes last week.


                   


                  Thanks


                  HI


                  Click to expand...



                  It would not be my choice in allocation, but not unreasonable. Don’t take it from me. Read Larry Swedroe’s and Bill Bernstein’s books and then let us know where you landed.

                  Comment


                  • #10

                    I like the small/mid cap tilting. Remember that a total stock market index fund is cap weighted, and so will have much heavier positions in large cap stocks. Nothing wrong with a little "extra" placed in small and midcaps, both of which traditionally have outperformed large cap stocks. Bernstein comments on this in more than one of his books.


                    But make no mistake about it, this is a 'tilt' and we have no idea if the outperformance of small and midcaps will continue into the future.


                    I do this in my own taxable account at Vanguard where I own:


                     


                    Total stock market index admiral


                    Total international stock index admiral


                    Midcap index admiral


                    Tax managed small cap admiral


                    Intermediate term tax exempt admiral


                     


                    I try to put an equal amount into each of these funds every quarter, which approximates my overall desired asset allocation of 80%stock, 20% bond, but does indeed tilt towards small and mid

                    Comment

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