Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 05-20-2012, 02:03 PM   #21
Dryer sheet wannabe
Hud3's Avatar
 
Join Date: May 2012
Location: Nevis, West Indies
Posts: 22
A Bird in Hand,

Simplifying is a good idea. Since you're mostly with Vanguard, they can make it easy for you to do that.

Vanguard has a program to help you figure out the right mix of specific funds to meet your financial goals. First you fill out an online questionnaire to establish your risk profile. Then you select a ratio of stock and bond funds to match that profile (mine is 50% bonds and 50% stocks). These tools are available on their website at no charge.

Once having done that, you can work with one of their financial analysts who will work up a personal financial plan for you which includes suggestions as to just what funds you need to diversify your holdings across the various parameters--large/mid/small cap, value/growth, foreign, emerging mkts, etc. If you have less than $50K invested, this part costs $1,000. If $50K to $500K invested, it will cost $250. If you have more than %500K, it's free.

I've found this service to be excellent for my personal situation. Others may like a more hands-on approach, but I don't like to spend a lot of time analyzing and dealing with my investments. This approach allows me to sit back and simply monitor how things are doing as often or as infrequently as I choose. Once or twice a year, at my request, a Vanguard financial adviser will recommend changes to re-balance the portfolio. They'll even make the changes if I want.

Simple and effective. We've been doing this for 11 years and it's working.
__________________

__________________
Hud
Hud3 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 05-21-2012, 07:44 PM   #22
Recycles dryer sheets
A Bird In Hand's Avatar
 
Join Date: May 2012
Posts: 121
Quote:
Originally Posted by Lisa99 View Post
We consolidated from over 20 FA-managed funds down to five total funds that we self-manage today in Vanguard and two 401k accounts.
Quote:
Originally Posted by mystang52
Between DW and myself we had about 10 different 401K's due to job changes (and Lord knows how many different funds within them). I decided to consolidate, called Vanguard, and they made the process 99% painless, guiding me each step of the way. We are now down to 2 IRA's with Vanguard plus DW's current active 403B. Total of 5 different funds. I love that my financial life is now a lot simpler.
Quote:
Originally Posted by pb4uski
I think simple is better so I tend to consolidate things. We currently have 3 taxable investment accounts (hers, mine and ours, not sure why we bother and don't just consolidate these), 2 tIRAs, 2 Roths, 2 HSAs and 1 former employer deferred comp plan.
Nice! I've definitely been persuaded that consolidation is the way to go. My plan now is to roll our TIAA funds (sans traditional fund) into Vanguard and TSP (for G fund). Because of the traditional fund, for the foreseeable future we'll still have accounts at Vanguard, TIAA, and TSP. But our TIAA accounts will just have 1 fund (traditional), TSP will just have 1 fund (G fund), and the last step is to pare down the Vanguard funds to just a small handful. Which brings me to...

Quote:
Originally Posted by Hud3
Vanguard has a program to help you figure out the right mix of specific funds to meet your financial goals. First you fill out an online questionnaire to establish your risk profile. Then you select a ratio of stock and bond funds to match that profile (mine is 50% bonds and 50% stocks). These tools are available on their website at no charge.
Thank you! I can't believe I didn't notice this feature before. I'm going to run through this and see what it suggests. Does it recommend specific funds after you answer the questions? Well, I'll find out for myself soon enough.

Quote:
Once having done that, you can work with one of their financial analysts who will work up a personal financial plan for you which includes suggestions as to just what funds you need to diversify your holdings across the various parameters--large/mid/small cap, value/growth, foreign, emerging mkts, etc. If you have less than $50K invested, this part costs $1,000. If $50K to $500K invested, it will cost $250. If you have more than %500K, it's free.
Hmmm...it would cost me $250 at the moment. In a couple years I should be up to $500k at Vanguard, so perhaps I'll wing it until then. Thanks again for this information. I found it very helpful.
__________________

__________________
A Bird In Hand is offline   Reply With Quote
Old 05-21-2012, 08:37 PM   #23
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,620
The Vanguard folks are only going to recommend 3 funds:
1. Total US Stock Market index fund,
2. Total International Stock Market index fund, and
3. Total US Bond Market index fund.

Save your $250.
__________________
LOL! is offline   Reply With Quote
Old 05-21-2012, 08:57 PM   #24
Recycles dryer sheets
A Bird In Hand's Avatar
 
Join Date: May 2012
Posts: 121
Quote:
Originally Posted by LOL! View Post
The Vanguard folks are only going to recommend 3 funds:
1. Total US Stock Market index fund,
2. Total International Stock Market index fund, and
3. Total US Bond Market index fund.
Seriously? Regardless of years 'til retirement, risk tolerance, etc. -- they'll just offer that boilerplate suggestion?
__________________
A Bird In Hand is offline   Reply With Quote
Old 05-21-2012, 10:55 PM   #25
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,439
Quote:
Originally Posted by A Bird In Hand View Post
Seriously? Regardless of years 'til retirement, risk tolerance, etc. -- they'll just offer that boilerplate suggestion?
It is pretty close to true. The reality is that by changing the mix of these three funds you can cover a lot of situations.
__________________
pb4uski is online now   Reply With Quote
Old 05-22-2012, 07:41 AM   #26
Recycles dryer sheets
A Bird In Hand's Avatar
 
Join Date: May 2012
Posts: 121
Quote:
Originally Posted by pb4uski View Post
It is pretty close to true. The reality is that by changing the mix of these three funds you can cover a lot of situations.
I suppose so. Grrr, I'm suffering from analysis paralysis with my Vanguard funds. In theory it should be a fairly simple exercise of choosing my desired allocation in 3-4 funds, then exchanging my existing 15 funds for those. In practice, I have difficultly letting go of some of the managed funds I've had for a long time...PRIMECAP Admiral, Wellington, Wellesley, etc. Maybe this means I haven't researched enough yet to have adequate peace of mind about my decision. Or maybe I'm just over-thinking things here.
__________________
A Bird In Hand is offline   Reply With Quote
Old 05-22-2012, 07:46 AM   #27
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,115
Quote:
Originally Posted by A Bird In Hand View Post
I suppose so. Grrr, I'm suffering from analysis paralysis with my Vanguard funds. In theory it should be a fairly simple exercise of choosing my desired allocation in 3-4 funds, then exchanging my existing 15 funds for those. In practice, I have difficultly letting go of some of the managed funds I've had for a long time...PRIMECAP Admiral, Wellington, Wellesley, etc. Maybe this means I haven't researched enough yet to have adequate peace of mind about my decision. Or maybe I'm just over-thinking things here.
Maybe you'd be more comfortable doing it in steps rather than all at once?
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 05-22-2012, 07:51 AM   #28
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,463
Quote:
Originally Posted by A Bird In Hand View Post
I suppose so. Grrr, I'm suffering from analysis paralysis with my Vanguard funds. In theory it should be a fairly simple exercise of choosing my desired allocation in 3-4 funds, then exchanging my existing 15 funds for those. In practice, I have difficultly letting go of some of the managed funds I've had for a long time...PRIMECAP Admiral, Wellington, Wellesley, etc. Maybe this means I haven't researched enough yet to have adequate peace of mind about my decision. Or maybe I'm just over-thinking things here.
It is hard to change. Especially when you have many different investments, you risk focusing more on the positive performance of a few and not on the overall performance of the portfolio. One thing that has surprised me over the years is how so many members of different forums have similar investment results with very different portfolios. A simple portfolio should perform just as well and be much easier to manage.
__________________
MichaelB is online now   Reply With Quote
Old 05-22-2012, 08:52 AM   #29
Dryer sheet wannabe
Hud3's Avatar
 
Join Date: May 2012
Location: Nevis, West Indies
Posts: 22
I came up with 50% bonds and 50% stocks for my risk profile. Here's what the Vanguard analyst recommended for me...

50 % in Total Bond Market Index, and the rest in...

Strategic Equity
Morgan Growth
Total International Stock Index
Windsor II Fund
Total Stock Market Index
Explorer

plus the Money Market fund for cash.

The breakdown within the stock fund segment is done to emulate the broad market.

Their initial recommendation is a starting point for a discussion. For example, they recommended a different growth fund, but I liked Morgan Growth. We discussed it and the analyst felt that Morgan was a good choice, so that's what I did. You don't have to accept the recommendations at face value, and the discussions you will have are very informative.

This approach isn't for everyone, obviously. I am not someone who enjoys researching and picking individual stocks. I don't even like spending a lot of time researching mutual funds. That's why the Vanguard approach fits me so well. I don't have to even think about it but once a year, although I do check balances and performance regularly just to see how things are going.

We've been living on this diversified mutual fund portfolio approach (neither of us has a pension) for 11 years and it works fine for us.
__________________
Hud
Hud3 is offline   Reply With Quote
Old 05-22-2012, 09:22 AM   #30
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,620
The portfolio that Hud3 presented from Vanguard is typical of what Vanguard was recommending years ago. One can see that from past posts asking "Is this Vanguard recommended portfolio any good?"

Nowadays, Vanguard recommends almost exclusively the 3-fund portfolio also found inside their Target Retirement funds. One can see that from modern posts asking "Is this Vanguard recommended portfolio any good?"

As pb4uski wrote, different percentages of those 3 funds will be good for many different situations. Also note that the Vanguard Total International Index fund did not exist in its current incarnation until a couple of years ago, so one could even get this kind of 3-fund portfolio until the past couple of years.
__________________
LOL! is offline   Reply With Quote
Old 05-22-2012, 02:14 PM   #31
Recycles dryer sheets
A Bird In Hand's Avatar
 
Join Date: May 2012
Posts: 121
Thanks to everyone for all the advice.

Quote:
Originally Posted by REWahoo View Post
Maybe you'd be more comfortable doing it in steps rather than all at once?
That's just what I did. My Vanguard retirement plan is in 2 parts: one consisting of employer contributions and one consisting of my own contributions. I reallocated the former to PRIMECAP, Wellesley, and Wellington in roughly equal proportions. I have enough in these to qualify for Admiral shares, so expenses should be pretty low. The latter I reallocated to Total Stock Market Index Signal Shares (55%) , Total International Stock Index Fund Investor Shares (15%), and Total Bond Market Index Fund Institutional Shares (30%).

So now I have 6 funds instead of 15, and it makes a whole lot more sense to me. There was a lot of redundancy before, and there's substantially less now. It will also be interesting to see how the managed funds stack up against the index funds over time.
__________________

__________________
A Bird In Hand is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 01:59 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.