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looking for portfolio advice/critiques
Old 01-12-2020, 05:46 PM   #1
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looking for portfolio advice/critiques

42 years old here. Fully maxed out emergency fund. Maxes out 401K and Roth and HSA. 10 years left on the mortgage, no other debt.

401K is split 40/40/20 with 40 long term mid cap growth. 40 mid cap value index and 20 in international fund. Most of my money is in the 401K and I am not too worried about the distribution or choices.

My Roth is a mess. Right now I have 30K available to invest, money in FIHFX, FZROX, GBTC (it's a flyer. I am totally loosing money on it), QLD, VSMAX and VTSAX. The breakdown is 15% in cash, 2% in FIHFX, 25% in FZROX, less than 1% in the flyer, 18% in QLD, 30% in VSMAX and 8% in VTSAX. I hope to retire in 8 years if everything works out according to plan. 55 worst case scenario. I want to be heavily involved in stocks to make the money grow faster. I understand the ricks involved and have a healthy emergency fund. I think that I probably have too many stocks/mutual funds in this account. Any ideas as to how I can truncate this?

I also have non-tax advantaged accounts. One w fidelity. 10K ready to invest, money in DIS, F, FZROX, T , V and VSMAX. I really want to get out of stocks but at the same time the returns are too tempting to completely overlook. For this account the breakdown is 13% cash, 5% in Disney, 8% in Ford, 7% in FZROX, 9% in AT&T, 29% in Visa and 28% in VSMAX.

Any thoughts or general advice? I know that people who chase high returns get burned which is why most of my money is in index funds and mutual funds. Thanks.
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Old 01-12-2020, 06:26 PM   #2
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1. 40% equity is quite low for your age. DW and I were close to 100% at that age.

2. The phrase "index fund" doesn't guarantee that you won't be burned. Betting on sectors (like "mid cap value") is riskier than buying the total market.

3. The Roth does look like a train wreck. One total market fund and one international fund, your choice of mix, is preferred by many here. 90% of DW and my funds are in either VTWAX or a pair of US/international total market funds.

4. Read "The Bogelheads Guide to Investing" with an eye towards a three fund portfolio. https://www.amazon.com/Bogleheads-Gu...dp_ob_title_bk

5. You don't want to chase high returns yet you say "the returns are too tempting to overlook." Cognitive dissonance, I think it is called.

William Bernstein's comments on investing for retirement:
“Make no mistake about it: The object of this particular game is not to get rich – It’s to not get poor.”

and

“Do you think that by choosing a portfolio of only a few stocks that you hope will score big, you are maximizing your chances of becoming wealthy? Indeed you are, but you are also maximizing the chances of a retirement of cat food cuisine
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Old 01-12-2020, 06:59 PM   #3
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Originally Posted by OldShooter View Post
1. 40% equity is quite low for your age. DW and I were close to 100% at that age.
Not sure where you're getting 40% equity ... maybe you are misinterpreting his 40/40/20 allocation - it is 100% equity funds, not 40% equity.

Quote:
401K is split 40/40/20 with 40 long term mid cap growth. 40 mid cap value index and 20 in international fund.
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Old 01-12-2020, 07:04 PM   #4
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I wasn't a good investor when young. I have been burned. As I have gotten older I am a lot better investor. One thing I noticed in your Roth Ira, is you seem to overlap between FXROX and VTSAX. I would exchange FZROX for VTSAX.

In your Roth you have GBTC. Why? It's not enough to get rich on and if you put enough in it to make any money you put that money at great risk. It's not worth it IMO. Not even close. I would exchange it. I would exchange FIHFX in your Roth.

You have 18% in QLD and 30% in VSMAX. That's 48%. Too much small cap exposure. If you took VSMAX, GBTC and FIHFX and put them all in FDGFX it would go a long way towards reducing your risk of capital and still give you some possibility for growth.

So with all the changes, this is what I came up with for your Roth.
18% QLD
15% cash The market looks expensive, so hold that cash for now
33% FDGFX
33% VTSAX

I have not even begun to look at your other accounts but you didn't ask for advice about 401k anyway. But at least this gives you some idea of how you could change your ROTH. Of course you can certainly keep what you have like it is, after all it's your money.
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Old 01-12-2020, 07:06 PM   #5
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Originally Posted by AreWeThereYet0 View Post
42 years old here. Fully maxed out emergency fund. Maxes out 401K and Roth and HSA. 10 years left on the mortgage, no other debt.

401K is split 40/40/20 with 40 long term mid cap growth. 40 mid cap value index and 20 in international fund. Most of my money is in the 401K and I am not too worried about the distribution or choices.

My Roth is a mess. Right now I have 30K available to invest, money in FIHFX, FZROX, GBTC (it's a flyer. I am totally loosing money on it), QLD, VSMAX and VTSAX. The breakdown is 15% in cash, 2% in FIHFX, 25% in FZROX, less than 1% in the flyer, 18% in QLD, 30% in VSMAX and 8% in VTSAX. I hope to retire in 8 years if everything works out according to plan. 55 worst case scenario. I want to be heavily involved in stocks to make the money grow faster. I understand the ricks involved and have a healthy emergency fund. I think that I probably have too many stocks/mutual funds in this account. Any ideas as to how I can truncate this?

I also have non-tax advantaged accounts. One w fidelity. 10K ready to invest, money in DIS, F, FZROX, T , V and VSMAX. I really want to get out of stocks but at the same time the returns are too tempting to completely overlook. For this account the breakdown is 13% cash, 5% in Disney, 8% in Ford, 7% in FZROX, 9% in AT&T, 29% in Visa and 28% in VSMAX.

Any thoughts or general advice? I know that people who chase high returns get burned which is why most of my money is in index funds and mutual funds. Thanks.
Since you say most of your money is in 401k and that's obviously going to be a significant amount more than the Roth with $30k plus the taxable $10k, I think you're doing well for someone your age. 10 years left on the mortgage and no other debt - good job.

Stick with it - it looks/sounds good.
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Old 01-14-2020, 06:44 PM   #6
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FWIW I used to mess around a bit with different funds, and a few stock picks. But I've evolved to the simplicity of a target date fund for the Roth IRA, and a three fund portfolio in the 401k (actually four funds in the TSP: G,C,S,I if you're familiar with the government employee plan). Discipline is easier with simplicity, for me.
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