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Hello, new here and feel lost..
Old 03-28-2015, 06:00 PM   #1
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Hello, new here and feel lost..

Hello everyone.

I'm Mike , 50 years old, just divorced , adult children , and inherited a modest chunk of cash when my parents passed away rip. Not enough money to retire on now, but enough to retire a little earlier hopefully.. I work for a university and make about $50k yearly.

I feel like I could have done a much better job of investing it. Why be so conservative with such a long time line? My moms adviser helped me out with vanguard funds after her death, but when I asked to invest a little more aggressively, he fired me! This was four years ago..

What made it worse is the mentality he left me in, since I really did respect his opinions and knowledge. He kept mentioning china and the market turmoil they could create as the reason my portfolio was as conservative as his at the age of 76. But now looking back since 09, I really did miss the train on this last bull market considering the market volatility we are seeing lately..

Anyway.. Can I ask for fund advice here?

Where's what Iv got as of now..

11.2% VTSAX Total Stock Market Index Fund Admiral

7.5% VTIAX Total International Stock Index Fund Admiral

5.8% VINEX International Explorer Fund

23.9% VBIAX Balanced Index Fund Admiral

37.8% VBTLX Total Bond Market Index Fund Admiral

13.8% VMMXX Prime Money Market Fund

40% stocks 47% Bonds and 13% MM. Another $50k cash in the bank for home renovations..

3.8% of the above in a roth VTTVX Target 2025 Fund. And 23% of the above in a Tiaa/cref retirement account through work.



I want to simplify my portfolio to three or so funds, VTSAX VTIAX and maybe VBTLX or VBIAX. But be at least 80% equities since I don't need this money soon. Maybe in ten years, but I also have my Tiaa/cref.

So is my, "set it and forget it plan", VTSAX, VTIAX and VBTLX or VBIAX, a reasonable plan for someone who has a had time trusting a new financial adviser? And am I NOW in a good position if we have a market correction?

Frankly, I feel lost.. I know my heavy VBTLX position will lose value when interest rates start to rise, so I feel I need to sell soon. But I still have cold feet buying equities right now..

Any suggestions would be greatly apprenticed.
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Old 03-28-2015, 06:18 PM   #2
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Welcome to the forum. Others will be along shortly to comment on your AA but it could be simplified down to three or four. Have you read Andrew Hallam's The Millionaire Teacher? It's a great primer on investing.

Nothing jumps out at me as being awful with what you're doing now though.
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Old 03-28-2015, 06:39 PM   #3
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welcome to the forum. Really you are talking about shifting your Stock/bond ratio... but not showing that you don't like what the advisor had picked. The VINEX really picked up the small/midcap foreign where the VTIAX is listed more as a large blend.
Right now the market is a bit confusing. Stocks are at somewhat high valuations and bonds are a concern because rates likely will rise. so which way do you run?

Probably the right thing to do now is take stock of what you have an need... some planning. What do you need your nest egg to do to make your retirement (early or not) work for you. Then how much growth do you really need? Then what is your risk tolerance and how much volatility can you stomach? Then work on determining the best allocation.

If bond rates go up fast... likely we will see problems with bond losses. If they go up slowly, it may not be as bad.
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Old 03-29-2015, 07:21 AM   #4
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You may be a bit conservative when looking in the year view mirror, but no disaster. Go slow with reallocation as bingybear says. But I am curious about how he "fired you." Was he advising you for free as a favor to your mother? If so, I can see him stepping back after giving you his initial point of view. The fact that he put you in a handful of VG index funds speaks to his good will - unless he charged you 1% of your inheritance to do it.
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Old 03-29-2015, 08:25 AM   #5
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Quote:
Originally Posted by rebar View Post
... 50 years old.... Anyway.. Can I ask for fund advice here? ... I want to simplify my portfolio to three or so funds, ... Any suggestions would be greatly apprenticed.
Hi rebar,
One thing you could do is replicate what the professions at Vanguard do in their Target Retirement funds. Here's a link that'll help find the right one: https://investor.vanguard.com/mutual...-retirement/#/

Click on the 48-52 age and "Target Retirement 2030" is suggested. The 'detailed fund profile' shows it's made up of 4 Vanguard funds (US & Int'l stocks, and US & Int'l bonds). I see this is currently 75% equities.
One could also just buy the fund and it'll automatically adjust allocations as you age if you'd rather not do it yourself.

As for market corrections: they happen. The market cycles between exuberance and fear. I haven't found anyone who can predict the market's future, so I choose to ignore it's gyrations. I've got many years of retirement to fund and know that the stock market is my best chance to keep inflation from eroding my portfolio.

I'd also suggest education. I like these 11 short Boglehead videos:https://www.bogleheads.org/wiki/Vide...ent_philosophy

Good luck!
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Old 03-29-2015, 08:55 AM   #6
Confused about dryer sheets
 
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Quote:
Originally Posted by Walt34 View Post
Welcome to the forum. Others will be along shortly to comment on your AA but it could be simplified down to three or four. Have you read Andrew Hallam's The Millionaire Teacher? It's a great primer on investing.

Nothing jumps out at me as being awful with what you're doing now though.
No I havent read that. Iv read a few others, but I still don't feel like I learned what I needed.

My port looks much different now. In the beginning, he had me in VBIAX , VFIJX GNMA Fund, and VWEAX High-Yield Corporate Fund. After he left, I didn't know when to get out of gnma and hy. I do like vbiax, I think.

Quote:
Originally Posted by bingybear View Post
welcome to the forum. Really you are talking about shifting your Stock/bond ratio... but not showing that you don't like what the advisor had picked. The VINEX really picked up the small/midcap foreign where the VTIAX is listed more as a large blend.
Right now the market is a bit confusing. Stocks are at somewhat high valuations and bonds are a concern because rates likely will rise. so which way do you run?

Probably the right thing to do now is take stock of what you have an need... some planning. What do you need your nest egg to do to make your retirement (early or not) work for you. Then how much growth do you really need? Then what is your risk tolerance and how much volatility can you stomach? Then work on determining the best allocation.

If bond rates go up fast... likely we will see problems with bond losses. If they go up slowly, it may not be as bad.
Yeah, how much and how fast rates rise are the variables. If they actually do. They have been going down since the 80's and there's only one way to go. Or is there?

If we have that correction monday Ill be in a good position. If the market flounders around with dismal returns like predicted and I don't get the signal Iv been waiting for, it will make reallocating difficult for me. I guess I can dca.

As far as what I need? Id like to manage my money where the dividends are all I need. Right now they are about 3k monthly. If I could increase that to 4k, I could do that and actually leave the money to my kids when I croak


Quote:
Originally Posted by donheff View Post
You may be a bit conservative when looking in the year view mirror, but no disaster. Go slow with reallocation as bingybear says. But I am curious about how he "fired you." Was he advising you for free as a favor to your mother? If so, I can see him stepping back after giving you his initial point of view. The fact that he put you in a handful of VG index funds speaks to his good will - unless he charged you 1% of your inheritance to do it.
No I paid him a percentage..
Leaving a needy client after investing his money without recommending a replacement? The least he could have done was explained to me what is plan was.. Because I know he would have dumped a few of the funds he bought with my money long before I did.
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