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Please Critique My Portfolio
Old 01-21-2015, 06:16 PM   #1
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Please Critique My Portfolio

I am planning to retire in 4 years so I am saving and investing as much as I can. The thread where the poster got fired by his FA had me thinking whether I am invested in the right funds and whether I might be duplicating. I am heavily into equities because I don't foresee needing any of the money in the near future. I have a real estate business that generates more than enough to live on including paying for HI. The only expenses I can foresee that I could potentially have to pay for is if my children decide to go to graduate school and pursue a field like medicine or law. If this happens I can comfortably fund it from my portfolio with a withdrawal rate under 4%. Here are the holdings in my portfolio right now. I also have about $500K in cash and I am trying to decide how to invest. I thought of several dividend paying stocks like 3M, Johnson & Johnson, AT&T etc but I seem to have settled on the idea of putting it in Vanguard S&P 500 ETF.

401K
Domestic Mid/Small cap equity
Vanguard prime cap (VPMAX)
International Equity
Domestic Large cap equity
Vanguard Capital (VHCAX)
Balanced fund

IRA
Vanguard Wellington

Taxable
Vanguard Dividend Growth
Vanguard Global Equity
Vanguard Small Cap Admiral Fund
Vanguard Total Stock Market Index

I have not included the 529 investments nor the funds invested in TRowe price for the children.

What do you think of my choices?
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Old 01-22-2015, 06:45 PM   #2
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Any suggestions?


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Old 01-22-2015, 07:27 PM   #3
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It seems like there would be some duplication of holdings, especially in the taxable portion. Have you run your holdings through Morningstar portfolio xray?

And I would probably hold my dividend stocks in the 401k versus the taxable account.
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Old 01-22-2015, 07:38 PM   #4
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Thanks Gumby for the Morningstar tip. Will check it out.


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Old 01-22-2015, 10:28 PM   #5
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We have some of our taxable accounts in the Vanguard Tax-Managed funds and have been pleased with that. Depending on your cost basis, you might try to move out of the funds that are generating dividends and CGs in your taxable accounts. Remember that your cost basis needs to include all of the reinvested dividends and CGs that you've already paid taxes on (Vanguard may have the correct info or not depending on how long ago the accounts were opened).
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Old 01-23-2015, 09:19 AM   #6
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Quote:
Originally Posted by Gumby View Post
It seems like there would be some duplication of holdings, especially in the taxable portion. Have you run your holdings through Morningstar portfolio xray?

And I would probably hold my dividend stocks in the 401k versus the taxable account.
Wouldn't that depend? Up to a point, LTCGs and divvies get preferential tax treatment, whereas withdrawals from a 401k are taxed as regular income.
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Old 01-23-2015, 03:26 PM   #7
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Quote:
Originally Posted by Letj View Post
I am planning to retire in 4 years so I am saving and investing as much as I can. The thread where the poster got fired by his FA had me thinking whether I am invested in the right funds and whether I might be duplicating. I am heavily into equities because I don't foresee needing any of the money in the near future. I have a real estate business that generates more than enough to live on including paying for HI. The only expenses I can foresee that I could potentially have to pay for is if my children decide to go to graduate school and pursue a field like medicine or law. If this happens I can comfortably fund it from my portfolio with a withdrawal rate under 4%. Here are the holdings in my portfolio right now. I also have about $500K in cash and I am trying to decide how to invest. I thought of several dividend paying stocks like 3M, Johnson & Johnson, AT&T etc but I seem to have settled on the idea of putting it in Vanguard S&P 500 ETF.

401K
Domestic Mid/Small cap equity
Vanguard prime cap (VPMAX)
International Equity
Domestic Large cap equity
Vanguard Capital (VHCAX)
Balanced fund

IRA
Vanguard Wellington

Taxable
Vanguard Dividend Growth
Vanguard Global Equity
Vanguard Small Cap Admiral Fund
Vanguard Total Stock Market Index

I have not included the 529 investments nor the funds invested in TRowe price for the children.

What do you think of my choices?
I don't see much rhyme or reason to your selections. You're all over the place with lots of duplicative ownership, IMO. You're tilted toward small cap and dividend stocks in your taxable, but also own TSM, which doesn't make sense. It's almost like you're trying to be a little bit of everything without being anything in particular.

I'd simplify the heck out of my holdings if I were you. Create a baseline investment in things like Total Stock Market, Total International, and then stray from there if you want to tilt toward small cap or dividend funds. There's no apparent strategy in your current allocations, IMO, and as others pointed out your selections aren't terribly tax efficient for someone with a longer investing horizon (dividend growth in your taxable account, for example).
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Old 01-23-2015, 07:20 PM   #8
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Thanks all for your very helpful responses. I will surely make some changes.


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