My retirement portfolio (missing anything?)

[pletal]

Rose3408
You may still be confused. There is no magic answer. History does not and will not repeat itself when it comes to financial markets and returns. I have moved stuff here and rebalanced there, I have had enough of guessing. I am plugging in a 3% return before taxes. I will save until I can pull out a set amount a month for 40 years with nothing left after that time , unless I make over 3% . That will make me 90 years old. It works for me. As for financial gurus, Been through many, they think I am nuts, Kind of like that.

 

[clifp]

What was the question again? "Am I diversifying correctly?"

The answer to that question is "No, you are not diversifying correctly." There is no reason to have a sector fund such as that Health Science fund.

Without regard to the funds you now own, what is your desired asset allocation and how did you come up with that desired asset allocation?

Actually according to the M* Xray report she is well diversified. A sector fund isn't normally part of portfolio with so few funds, but the impact is pretty small. A 32% allocation to health care vs 12% of the overall market. It is 30%*25% of her portfolio = 7.5%. Plenty of us have a couple of stocks that add up to more than 10% of our portfolios.

My suggestion was to add the S&P 500, but I'm hard press to be too critical of 5 star fund, with 1,3,5, 10 year of performance 18.8%, 23.5%, 9.0%, and 14.5% and standard deviation of roughly the same as the S&P. PHLAX was ranked in the top 2% in its category over 10 years.
I am assuming that since it is in a 401k there is no load and if there is load I'd suggest Rose stop contributing new funds to it.

 

[tmm99]

Rose,

I am in a similar situation as you. I don't understand a lot of the stuff people are posting in this thread. I think I understand a lot of it conceptually, but putting it into action is another story.

Most people see the total portfolio as one big pie chart with all investment accounts combined, and decide on how they want to break up the pie into pieces (funds) depending upon what they are aiming for (agressive, conservative, tax deferred, etc). This, to me, is too difficult and confusing to do, because I have an old 401K's I cannot add any money to. I also have a current 401K I am putting a lot of money into every 2 weeks while Roth IRA (tax free) gets fed only once a year by a fraction of the amount of money that goes into my current 401K. You also have multiple retirement accounts like myself. And I believe that is why people are asking for more information so they can figure out the whole pie.

Besides that it is very confusing and difficult for me to try to figure out what funds to get to make one big pie chart (some accounts have few funds to choose from), if I made one pie chart with all my retirement accounts, and split it into different funds, some funds will get new money while some never will, and you did mention something similar in your post.

So what I decided to do was to look at each retirement account as a separate pie chart, and use similar asset allocation breakdown for each retirement account. If one asset allocation pie chart with all accounts combined is like one universe, mine is like having multiple universes, but each universe has same or similar asset allocations (depending upon what funds are available) as the other universes.

To determine asset allocations, I am using my version of Lazy Portfolio by combining some of the stuff I read in books and this link
Lazy Portfolios - Bogleheads

My current 401K moved to another brokerage firm with limited selections recently;, so I am going over the funds to figure out how I can match my current 401K to the asset allocations I want.

Overall, Anmorph post is very close to what I am doing. (2 and 3) except he is not mentioning to create multiple universes like I am doing.

I think his approach and my approach would make things easier to handle.

 

[growing_older]

In general, most advisers will want to make this sound complicated. The more dependent you are on their advice, the easier it is for them to sell you something. In reality, you just need a balanced portfolio with relatively low costs. Freedom 2020 (or whatever date you choose) will do that for you. Putting 100% in that one fund is sufficient. If you want to try to drive to lower costs by buying individual equity and bond funds (indexes recommended) you could consider that. It's a small step past the simplest one fund "portfolio" and may or may not outperform it. Beyond that, you could consider adding a sector (like you did with healthcare) but frankly you are moving beyond investing at that point and are attempting to predict which sectors will be net winners, which is borderline speculation.

If I were in your place, I would suggest 100% Freedom 2020. Set it and forget it. Stay the course. Avoid clever advisers and you deny them the opportunity to sell you something that benefits them.

I think Nords was genuinely trying to be helpful, and had no intention of pushing the buttons that apparently you are sensitive to. You would be well advised to mend that fence.

 

[Amethyst]

I am concerned that our new member, Rose, constantly accuses herself of being dumb and helpless (see quotes from Rose's posts, below).


Not the sharpest pencil here
I'm sorry for being such an ignoramus
I'm just not smart enough
since it's just little old me,
I did make one VERY big stupid mistake
you can send me a cyber slap here.


Realize that these quotes are taken out of context, yet even within the context of her posts, Rose is putting herself down. To invite a "cyber slap" is to be ready to see a "slap" where a slap was never intended. That, one suspects, is not the best frame of mind for learning new things. Suggest that Rose get in the habit of treating herself with greater respect; this may help her be in a better frame of mind to accept the well-intended and well-expressed advice she has received.


Just my gently intentioned $.02.



Amethyst

 

[travelover]

...........

If I were in your place, I would suggest 100% Freedom 2020. Set it and forget it. Stay the course. Avoid clever advisers and you deny them the opportunity to sell you something that benefits them.

I think Nords was genuinely trying to be helpful, and had no intention of pushing the buttons that apparently you are sensitive to. You would be well advised to mend that fence.

+1