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Need help with math - what is my AA?
Old 02-16-2017, 09:45 AM   #1
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Need help with math - what is my AA?

I'll be the first to admit that I'm not good at math calculations so I have a pretty basic question I need help with. What is my AA based on the info below?

My VG investments:

- VG Wellington - $640k
- VG Wellesley - $155k

VG Wellington has a portfolio composition of 65% stocks / 35% bonds. VG Wellesley has a composition of 39% stocks / 61% bonds.

So what is my stocks vs. bonds allocation based on my investments?

I'm wondering if I should move all my Wellesley investment into Wellington.

Thank you.
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Old 02-16-2017, 09:48 AM   #2
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It's roughly 60/40. I am surprised Vanguard doesn't show you this on your statement or online.
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Old 02-16-2017, 09:53 AM   #3
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It's roughly 60/40. I am surprised Vanguard doesn't show you this on your statement or online.
Oh my....you're right. I just clicked on the asset mix tab. I guess I'm dumb at more than just math calculations!

Thank you.
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Old 02-16-2017, 09:58 AM   #4
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Oh my....you're right. I just clicked on the asset mix tab. I guess I'm dumb at more than just math calculations!

Thank you.
LOL, sometimes there is TOO much information to absorb on a website.
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Old 02-16-2017, 10:00 AM   #5
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Your allocation to stock from Wellington is 0.65*640K, or $416K

Your allocation to stock from Wellesley is 0.39*155K, or $60.5K

(416 + 60.5)/ (640+155) = 59.93% stocks

What do you want your stock allocation to be?
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Old 02-16-2017, 10:23 AM   #6
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Originally Posted by Slow But Steady View Post
Your allocation to stock from Wellington is 0.65*640K, or $416K

Your allocation to stock from Wellesley is 0.39*155K, or $60.5K

(416 + 60.5)/ (640+155) = 59.93% stocks

What do you want your stock allocation to be?
Thank you for those calculations. As for your question, I suppose I'm okay with 60% stocks but I'd also be okay with 65%, which means I could move everything to Wellington if I wanted to. But is that really just an unnecessary waste of money (i.e., fees)? I realize there is no definitive answer but I'm curious to know opinions. (Btw, my retirement timeline is anywhere from 1 year to 4 years.)
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Old 02-16-2017, 10:30 AM   #7
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Originally Posted by Carpediem View Post
Thank you for those calculations. As for your question, I suppose I'm okay with 60% stocks but I'd also be okay with 65%, which means I could move everything to Wellington if I wanted to. But is that really just an unnecessary waste of money (i.e., fees)? I realize there is no definitive answer but I'm curious to know opinions. (Btw, my retirement timeline is anywhere from 1 year to 4 years.)
If the recent run-up in the stock market continues, you may end up at 65% in a short time, anyway. I'd just wait and see.
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Old 02-16-2017, 10:31 AM   #8
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Thank you for those calculations. As for your question, I suppose I'm okay with 60% stocks but I'd also be okay with 65%, which means I could move everything to Wellington if I wanted to. But is that really just an unnecessary waste of money (i.e., fees)? I realize there is no definitive answer but I'm curious to know opinions. (Btw, my retirement timeline is anywhere from 1 year to 4 years.)
Your age and whether you have a pension or other income would also come into play in any opinion we might offer.
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Old 02-16-2017, 10:55 AM   #9
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Your age and whether you have a pension or other income would also come into play in any opinion we might offer.
I'm 58 and DW is 57. Pension is a pathetic non-cola $3600 per *year* - not month. Income from rentals is approx $10k per year. Combined SS income at 70 will be approx $70k per year.
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Old 02-16-2017, 03:52 PM   #10
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There should be no fees to sell Wellesley and buy Wellington at Vanguard.. There will almost certainly be taxable cap gains if they are in a taxable account, though you may not have LTCGs taxed depending on your other taxable income.


Vanguard keeps the AA of those two funds relatively stable so even if the market runs up you won't likely get your AA to 65/35 by doing nothing.
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Old 02-16-2017, 03:54 PM   #11
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Don't use math because it is too hard. Instead, use morningstar instant X-ray tool:
Instant X-Ray Stock Fund Investment Portfolio Holdings Free Analysis Research Tool - Morningstar
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Old 02-16-2017, 05:26 PM   #12
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Don't use math because it is too hard. Instead, use morningstar instant X-ray tool:
Instant X-Ray Stock Fund Investment Portfolio Holdings Free Analysis Research Tool - Morningstar
WOW. This is great! Thank you!
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Old 02-17-2017, 04:06 PM   #13
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If the recent run-up in the stock market continues, you may end up at 65% in a short time, anyway. I'd just wait and see.
I'm not sure this would happen if all of the OP's money is in Wellington/Wellesley. Those 2 funds typically will rebalance internally and generally maintain their stated allocation within fairly narrow bands. For example, Wellesley will typically hold a Balanced allocation: 60%–65% bonds, 35%–40% stocks. And Wellington the inverse.
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Old 02-18-2017, 08:30 AM   #14
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Originally Posted by Carpediem View Post
I'll be the first to admit that I'm not good at math calculations so I have a pretty basic question I need help with. What is my AA based on the info below?

My VG investments:

- VG Wellington - $640k
- VG Wellesley - $155k

VG Wellington has a portfolio composition of 65% stocks / 35% bonds. VG Wellesley has a composition of 39% stocks / 61% bonds.

So what is my stocks vs. bonds allocation based on my investments?

I'm wondering if I should move all my Wellesley investment into Wellington.

Thank you.
Is VG Wellington and VG Wellesley the only investments you have? Reason I'm asking is as you probably know, AA should be your entire investments.

I used to have Wellesley (have since, just gone indexes). What I did to get my proper allocations calculated is to make a spreadsheet and divide the Wellesely investment into stock and bond portions. For example, say you had $10,000 in Wellesley, then the spreadsheet might have something like (60% in bonds, 40% in stocks for Wellesley):

Cash
VG Money Market - Non IRA ............. $1000
VG Money Market -IRA ......................$2000
-------
$3000

Bonds
VG Total Bond - non IRA.....................$3000
VG Total Bond - IRA....................... $4000
Wellesley - (bond portion)............... $6000
---------
$13,000

US Stocks
VG Total Stock - on IRA .....................$1000
VG Total Stock - IRA..........................$1000
Wellesley - (stock portion) ................$4000
--------
$6000
Int'l Stocks
VG Total Int'l Stock - on IRA .....................$1000
VG Total Int'l Stock - IRA..........................$1000
--------
$2000



Then from those subtotals, you can have the spreadsheet calculate the grand totals and percent allocations.
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Old 02-18-2017, 09:45 AM   #15
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Is VG Wellington and VG Wellesley the only investments you have?
Yes, W/W are the only investments in our portfolio. I think I'm too scared / unsure to venture beyond that.
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Old 02-18-2017, 10:05 AM   #16
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Yes, W/W are the only investments in our portfolio. I think I'm too scared / unsure to venture beyond that.
W/W are fine funds....the only criticism people might offer about you AA is your slight lack of diversification because they are not invested in the "whole market" and you don't have any international, but I don't think that's too much to worry about.

In W/W your asset allocation will stay the same if you do nothing as they will automatically rebalance.

You can project you retirement income by taking 4% of your W/W account balance and adding it to your pension, rental and SS income.
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