Evaluate My Portfolio: Concerns about advisor

[ctly8b]

Hi All,

I am 27 and am about to get married. I am at a point where I want a real evaluation of my current portfolio. I have an adviser, but I am low on the totem pole compared to his other clients and do not feel like I get a thorough explanation of my investments, or help with long term goals and life changes. I make approx. $55,000/ year, but I plan to go to dental school in 3 years so my contributions will reduce to next to nothing while I am in dental school.

I have a few funds that I contribute towards and would love your input and to learn from your experiences. The following are my assets and general questions:

401K:
18% - Franklin US Government Securities (Bond)
18% - Lord Abbett Income R-3 (Bond)
9% - Lord Abbett Total Return (Bond
28% Oppenh. International diversified (Equity)
27% Oppenh. Rising Dividends (Equity)

Trad. IRA:
Franklin templeton moderate target fund

Life and Annuity Insurance plan: Unsure on the holdings

- Am I too heavy in bonds?
- Are the funds too conservative?
- Should I consider adding any ETF's?

Any thoughts are appreciated! Thank you!!

 

[travelover]

Welcome, while you will get some good advice here, I'd also post over at Bogleheads. If you use their standard posting format, they can give you a comprehensive recommendation.

Bogleheads • View topic - Asking Portfolio Questions

 

[gcgang]

You are 27 years old, you are WAY too conservative, IMHO.

 

[seraphim]

What gcgang said. If you have no plans to use the funds in the next 10 years, go equities. They are your money makers. Bonds if you feel the need to reduce volatility; but again, why bother unless you plan to remove the money, or are concerned you'll be forced to remove money in the next ten years.

Look at Vanguard for your IRA - very low cost. Enough said.

Not sure what's available with your 401. I'm stuck with Oppenheimer for some post separation payments and they were the only contractual option. Would not be with them, otherwise. They chose the FA and the average Opp cost is over 1.5%. My entire portfolio average is only .11%. Please note the decimal point.

Check all your expenses. An FA is expensive. Learn about low cost indexing funds - it will save you a TON of money over the next 35 years, and your FA will offer you no better return over the long run.

And stop putting money into bonds. My ratio is 60stocks/40 bonds and I'm retired already. You have more bonds than I do, and I'm the one who should be concerned about maintaining the principal.

 

[seraphim]

Morningstar - with a free registration - has an excellent in-depth tutorial broken down in small segments.

 

[ctly8b]

Thanks for your input. I don't expect to touch the investments in the next 10 years (that's the plan, at least). I have somewhat flexible options in choosing funds for my 401K, but I am not sure what it would cost for me to change the distribution to other funds, so I am hesitant to do so.

What I could do would be to reduce my 401k contributions to the employer match (I currently contribute 5% above the match), and use that to fund a vanguard IRA fund.

 

[ctly8b]

Also, with Index funds, is it something that you can contribute to on a regular monthly basis, or are you better off investing a lump sum?

 

[pb4uski]

At your young age I was all equities since it wasn't money I was relying on and I had decades to recover if there was a decline. You're way too conservative.

I like the idea of reducing 401k to maximize the match and put additional saving in a Vanguard Roth IRA or tIRA.

 

[pb4uski]

Also, with Index funds, is it something that you can contribute to on a regular monthly basis, or are you better off investing a lump sum?

Either is fine but it is easier to dollar-cost average (DCA) since you can set up regular contributions and forget it.

 

[seraphim]

If you already have a lump sum to rollover, or cash to contribute, I don't see any reason to hold the cash or intentionally spread out the deposits. I'd put them to work for me immediately, since we're discussing funds. Then set up automatic deposits for future contributions.

 

[padlin00]

Have you ever taken a Risk Evaluation to see how much risk you can handle? Here's the one from the Vanguard site. https://personal.vanguard.com/us/FundsInvQuestionnaire Try it out and see what it says you should do.

I've heard young folks should have a high percentage in equities as the investment horizon is long and there is plenty of time to make up any early losses. Makes sense as long as one can handle the inevitable losses that happen without loosing sleep or selling when they should be holding.
The idea is to keep the equity portion to a level that does not cause one to lose sleep or worry. As one gains experience with downturns one learns their pain threshold and can adjust the AA accordingly.

I also suggest you join the Bogleheads and post in the "Help with Personal Investing" forum using the format you'll find in the 2nd post "Asking Portfolio Questions". There is more to it then just showing what you currently are invested in.