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Judge my portfolio! Please!

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  • Judge my portfolio! Please!

    1st year Pulm/CC Fellow. Getting ready to consider reallocation for my employer 401(a), and wanted to know y'all's thoughts on risks, etc on my current allocation. Thanks in advance!

     

    5% stability of principal

    10% T Rowe Price Retirement 2050 fund

    10% Vanguard Wellington Fund Admiral Shares

    10% Vanguard Total Stock Market Index Fund Institutional Shares

    15% Vanguard Equity Income Fund Admiral Shares

    20% American Funds The New Economy Fund Class R6 (only large cap growth option with my plan)

    10% Vanguard Mid-Cap Index Fund Institutional Shares

    10% Vanguard Small-Cap Index Fund Institutional Shares

    10% Vanguard International Growth Fund Admiral Shares

  • #2
    Judgement: C

     

    All over the place, expensive, overlap, no plan.

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    • #3
      Recommendations then?

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      • #4
        Assuming these (above) are your only choices and you want to tilt small cap, how about this:

        20% Stable value fund

        50% Vanguard Total Stock Index

        10% Vanguard Small Cap Index

        20% Vanguard International Growth

        It's 80% Equity and 20% Fixed Income and the Equity is 75% US and 25% International

         

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        • #5
          Since you are talking tax protected space you can easily ditch that American fund.

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          • #6




            1st year Pulm/CC Fellow. Getting ready to consider reallocation for my employer 401(a), and wanted to know y’all’s thoughts on risks, etc on my current allocation. Thanks in advance!

             

            5% stability of principal

            10% T Rowe Price Retirement 2050 fund

            10% Vanguard Wellington Fund Admiral Shares

            10% Vanguard Total Stock Market Index Fund Institutional Shares

            15% Vanguard Equity Income Fund Admiral Shares

            20% American Funds The New Economy Fund Class R6 (only large cap growth option with my plan)

            10% Vanguard Mid-Cap Index Fund Institutional Shares

            10% Vanguard Small-Cap Index Fund Institutional Shares

            10% Vanguard International Growth Fund Admiral Shares
            Click to expand...


            Your t rowe price and american funds should be reallocated. They are easily replicable by shifting money to your other funds and are comparably very expensive. You could simplify by combining your small, mid and large fund into your total market fund.

            What does stability of principal mean? Is that bonds or cash or something. If its cash you should put it to work in some manner.

            Comment


            • #7
              Thanks! That’s helpful. The stability of principal is just a vita fixed account, on average has earned 3% over last 10-yr.

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              • #8
                Voya* not vita.

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                • #9
                  Is this the only money you have invested? What is your desired asset allocation overall? Are these the only funds available?

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                  • #10
                    Someone here came up with this idea so I cannot take credit

                    I'd put it all in Vanguard Total Stock Market Index Fund (its a retirement account, you're a 1st year fellow, don't think you'll be needing this money for a while)

                    I would spend the rest of fellowship perusing this forum, this blog, reading some of the books on the recommended reading list, reading some of the other personal finance blogs out there targeting doctors, high income professionals etc

                    Once you become an attending and have more money to invest, you'll have a better idea of what to do and I don't think you would regret parking your money in VTSAX in the meantime. And a better idea of what to do may not entail changing much as I'm sure many of us use VTSAX as one of the foundation (if not the sole) mutual funds in our portfolios.

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                    • #11
                      This is the only money I have invested. My hospital takes a mandatory 9% from my check, but matches around 13%. Which has led to a pretty sizable sum over my 5 years (so far of training.)

                      As far as asset allocation, I’ve been riding this pretty stock heavy grouping over a good market the last 5 years but it may be time to add some more stability.

                      For the most part, yes these are the only funds accessie. All others are actively managed. The only bond options are PIMCO real return fund and Metropolitan West Total Return Bond Fund.

                      After reading WCI (the book), I went through and just selected the funds with lowest expense ratios from each class: asset allocation, balanced, large cap value, large cap growth, mid cap, small cap, and global.

                      I think a goal allocation for me may be closer to 80% stock and 20% fixed income.

                      Comment


                      • #12
                        Yeah, I kind of agree with doing all VTSAX in that portfolio. Don't get too cute. What about your Roth IRA? I'd get something going in that and your taxable account as well.

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                        • #13
                          Married, sole income earner, with two kids. So there isn’t any more money to go towards IRA, etc right now.

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                          • #14
                            Compared to what you will have in the near future you have very little money.  I think asset allocation comes into play when you have lots of money.  VTSAX is fine for now.  You can add other stuff when you get to say $250-500K.  I am making an assumption because I don't know how much money you have.  Many people invest in just VTSAX, BND, and VTIAX.

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                            • #15
                              I'll disagree with many of the above thoughts.  If you are targeting, 80/20 you are probably a bit low on your bond allocation.  Otherwise, other than being very much focused on Large Cap Growth, your allocation isn't too bad.  I would reduce your American allocation and reallocate to the Vanguard total market but not totally eliminate the allocation.  I also don't think holding the T Rowe Target dated fund is a bad idea if you otherwise can't get any emerging market stock or international and emerging market bond exposure within your portfolio.  I know many on this forum are totally against active management and paying higher fees than Vanguard, but in cases like Emerging Markets Stocks or getting exposure to asset classes you couldn't otherwise invest in I think its worth it.

                              Now this is backward looking and you know what they say about past performance and all of that, but your portfolio would have had similar returns to VTSAX over the past 10 years but also would have had less volatility.

                               

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