Portfolio Review Request

[Sheryl]

I’m suffering analysis paralysis and hoping for some thoughts on where to go from here. I’m looking more for a “tune-up” than a “makeover,” but any suggestions and comments would be appreciated. I think there is too much money in cash, especially sitting around in checking and savings accounts, but I’m not sure what to do with it.  Sometimes it feels like stuff is too spread around, but I like the diversity, generally.  If I break out the percentage in the blended funds,  I am at 59% Stock, 12% Bonds and 29% Cash.  I also will be getting a fairly nice lump of cash ($80k or so) from my mom’s estate in the next couple months that needs to go somewhere.   

Here’s what I’ve got – hope the format is readable and understandable.  The first number is the percentage of my total portfolio in that fund or account.

Retirement Accounts:
Fidelity IRA:
     3.4  FASMX   Asset Manager
     3.7  FMAGX    Magellan

Old Simple IRA (Franklin Templeton):
     4.3  TEDMX   Developing Markets
     6.2  TEMFX   Foreign Fund
     7.4  TEMIX    Mutual European

New 401(k):
     10.2  FTGTX  Franklin Templeton Growth Lifestyle

Fidelity Roth
     2.7  CASH

Taxable Accounts:
Stocks:
     0.7   MDT    Medtronic
     3.7   MMM   3M
     0.8   KMG    Kerr-McGee
     1.2   TM       Toyota
     0.1   TIVO    TIVO
     0.6   CVX     Chevron-Texaco
     0.8   CASH

Vanguard:
     5.3   VFSTX   Short Term Investment Grade (Bonds)
     8.3   VGSTX   Star Fund

Fidelity
     8.3   FCNTX   Contrafund
    12.7  FLPSX    Low Priced Stock

Checking (at 1.2%)
    10.4

Savings (at 4%)
     7.6

EE Savings Bonds
     1.7

Thanks for reading!

 

[LOL!]

Thanks for letting us take a look at what's in the sanctum inner sanctorum.

In the February issue of Smart Money James Stewart uses his monthly column to describe his annual tune-up of his portfolio. You might read that column for some inspiration.

I invest in stocks and enjoy it, but I learned some years ago that having a sub-2% amount in any single stock is just a waste. The amount in the stock is so low that it isn't going to affect your overall return on its own. Also, if the stock has lost money, then it becomes an orphan that you never look at again.

So my simple recommendation is to ditch all your stocks except MMM based on the percentage you have in them. I would probably ditch MMM as well because it appears to have done nothing in 2 years.

With the proceeds, I would purchase a small-cap value fund say at Vanguard or an ETF.

 

[JPatrick]

Ah yes, my old Fidelity friend!
It's really difficult to review a portfolio without knowing the person, goals, risk tolerance, favorite color, yada yada.
So I'll just comment on a few of your funds.
FMAGX--Been yesterdays fund for many yesterdays.  Yup, doing some new stuff now, but you'd be better off with a S&P 500 or one of the other funds noted below.  I made lots of money on this on in the 80's, but the 80's are long gone.
FASMX--Take a look at FBALX and compare performance and risk.  I'd switch.
TEDMX--Mark is a fine manager, but lately he is not keeping up.  Had lots of this, but I switched it all to VEIEX and FEMKX.  Both are cheaper /better.
FCNTX--I have lots of this and consider it to be one of the best funds in the world (today)
FLPSX--Still like this one, but considering moving more to FCPGX and FCPVX.
Other Fidos I have bought/added to in the last 3 months are--
FFTYX---FEXPX---FLPSX--FPBFX--FICDX--FSCOX
I noticed you have some oil stocks, so I guess you have considered FSELX and FSESX.  Both jewels especially if you have an energy crystal ball
Good Luck!

 

[brewer12345]

I won't comment on the individual stocks, except to say that I assume you have done and continue to do your due diligence and monitoring of them.

You paying more than 1% on any fund? If so, I would get rid of it and find something similar but cheaper. Heck, Schwab's no rock-bottom on fund prices, but even they offer a decent balanced fund for 50 BP (SWBGX).

I see no exposure to foreign bonds or commodities. I understand that some people are not eager to add commodities, but at least some foreign bond sshould be included. Check out GIM or PFUIX/PFUDX.

 

[mb]

Sheryl,

You mention that this is only a "tune up" and you mention several possible changes, e.g. to decrease cash, but it seems to me that you should take a step back and decide what you want your portfolio to look like after the tuneup.  Some questions to ask yourself along with a few comments:

- What is your risk tolerance?  Is it consistent with you asset allocation?
- What asset allocation do you want?
- Do you want to look at other asset classes that you currently don't have, e.g. REITS (I know that it may not be a good time for REITS but I'm just using it as an example)
- Regarding number of funds:  I don't see a lot of overlap in the funds but I'm not familiar with their holdings
- You have bonds in the balanced and life-style funds but other than that the only bond exposure is short term corporate.  Is that what you want?
- Based on your tax bracket does it make sense to have you taxable bonds in tax deferred accounts?
- Similarly, does it make sense to use Munis instead of taxable bonds in you taxable portfolio
- What about TIPs?
- Agree with LOL!'s comments on effect of small holdings.  The majority of my money is in index funds but I do have a small self directed IRA that I trade in. As much for entertainment purposes as anything else and since it is in an IRA I don't have to be concerned with the taxes each year.
-Your foreign holding seem to be weighted toward Europe?  Are you trying to avoid Japan?
-I try to put managed funds in tax deferred accounts (which I sometimes sell) and use index funds (which I never sell) or other tax efficient funds in taxable accounts
-Consider $ cost averaging if the $80k is a significant percent of your portfolio and you are nervous about investing it all at once (just a strategy to sleep better at night)

Good luck!

MB

 

[cute fuzzy bunny]

Wow thats a lot of 3M.

Hope you're looking forward to writing off that Tivo on your capital losses sometime in the next couple of years. I know a bunch of their management. Biggest bunch of disconnected idiots I've ever seen in my life. Nice fellas most of the time, but I wouldnt put them in charge of a business.

Why the short term investment grade bond fund instead of a money market or cd?

I thought 'contrafund' and 'low priced stock' were expensive...havent owned them since i held them in my company 401k about a decade ago.

 

[Sheryl]

Thanks to all of you guys for your time and comments. They will be very helpful in getting me unstuck.

Regarding the stocks, LOL, I think you have a good point. Other then the 3M they are really what I consider "play money" something to dabble around with, but I don't consider them a major factor in my retirement.

I've been thinking about 3M and it came to me that 3M is just like my ex-boyfriend. We had a lot of really great years together, but eventually it became obvious we just were nto a good fit for each other anymore. Yet I kept hanging on, remembering the good years, and hoping things would go back to the way they were.... Finally I realized it was time to cut loose, and just remember the good times.


JPatrick - good point I know Magellan's got to go, but wasn't sure what to replace it with - I appreciate the suggestions you've put out there, and will review them a little deeper and pick one or two.

Brewer - Foreign Bonds and Commodities. good points. Yes there are a couple of those funds charging more then 1% - they have to go.

MB - No, I wasn't trying to avoid Japan -just a matter of entropy in that I bought those three foreign funds several years ago. Should I ditch Europe in favor of Japan or just balance them out?

() - yeah - TIVO is one big dog! Actually just a small dog for me - Its not the kind of thing I'd take a big risk in, but at the time (18 mos ago) it seemed to be going somewhere. I am saving it for when I need the loss.

Why the short term investment grade bond fund instead of a money market or cd?

That's a good question. I'm not really sure why. Just another thing that I bought because it seemed like I needed it.

Again.... thanks for all the comments - I've used them to make up a research list and an "action list" and get my butt in gear on these updates. I really am grateful for the helpful attitude that this board has.

 

[mb]

MB -  No, I wasn't trying to avoid Japan -just a matter of entropy in that I bought those three foreign funds several years ago.  Should I ditch Europe in favor of Japan or just balance them out?

Gosh, I don't know!

I have one international fund that is fairly well balanced between the major international markets and one emerging market fund because I think that growth rates will be higher there than in the developed world.

I guess that I would do it but that is only because I don't have a strong opinion on either Europe or Japan.  You have certainly been better off under weighting Japan over the last 15 years but we seem to be in one of those recurring periods where many people seem to think that performance will improve there.  Who knows if they are right this time?

Since it is tax deferred at least you can change it without tax consequences.

Sorry I can't give any better insight that that,

MB   

 

[Sheryl]

Oh, darn. I thought you had that secret crystal ball that is going to make us all rich.

 

[mb]

As soon as I figure it out you'll be the first to know

 

[cute fuzzy bunny]

Might want to hold off on harvesting that tivo loss for a bit. Cisco may be in the market to buy them to have access to their patents and brand for a move into the home market...would certainly spruce up the stock price a bit.

 

[Sheryl]

Thanks, I think. It only needs to come up about 30% for me to break even.

I didn't quite hit the 52-week high when I bought it, but darn close.

Oh well, it's jsut my play money, but real lessons learned.

 

[cute fuzzy bunny]

Their patent portfolio is pretty impressive. So is the brand value, although they've been totally unable to leverage it. Bet the price humps a lot more than 30%.

 

[Sheryl]

Well, I'll hang on for the ride. I really did think they had a head start in the market, and the generic factor going for them (as in people saying, "I'll TIVO that show," when they really just mean record it. But as you noted, they have not capitalized on anything they've got yet. Might as well wait and see.

It's not enough of a loss to really help my tax situation anyway.

Maybe I'll go out and buy one of the danged things just to help them out.

 

[cute fuzzy bunny]

Get the directv version. Its free and after tivo goes away you'll still get the "tivo service" aka program guide data. If you buy one of the 'standalone' devices, they're available for free or low cost after rebates, which tend to be fairly reliably paid. Go with the monthly service rather than the lifetime, for the aforementioned reasons...

Might want to keep an eye on the situation and sell on the speculative pop, if there is any. Deal might not go through. The morons at tivo will probably hold out for too much money or want cisco to change their name to tivo or some other foolishness.