Help me market-time/rebalance please :)

[dvalley]

With the market up (yay!) I want to rebalance, get rid of things that likely won't perform well in the future.

Quick background: I'm only about 1/3rd of the way to my FI goal and looking at about 10yrs before I reach that mark (hopefully). My AA target is about 90/10 or thereabouts but I just picked that a couple of years ago because I want to grow the portfolio as aggressively as possible given my goals and short timeframe, I'm not averse to changing it if that's the general consensus.

Attached is what my portfolio looks like as of this morning; a few of these(individual stocks and vanguard admiral funds) are in my brokerage so that will generate a taxable event if i sell those.

 

[COcheesehead]

There are aggregating tools, Fidelity has one, Personal Capitol is another, that will bring all these accounts together and give you a clearer picture of where you stand. The Fidelity one will also you show you over or under weights and potential problem spots. With what you have shared it is hard to get a clear picture.

 

[audreyh1]

With the market up (yay!) I want to rebalance, get rid of things that likely won't perform well in the future.

Quick background: I'm only about 1/3rd of the way to my FI goal and looking at about 10yrs before I reach that mark (hopefully). My AA target is about 90/10 or thereabouts but I just picked that a couple of years ago because I want to grow the portfolio as aggressively as possible given my goals and short timeframe, I'm not averse to changing it if that's the general consensus.

Attached is what my portfolio looks like as of this morning; a few of these(individual stocks and vanguard admiral funds) are in my brokerage so that will generate a taxable event if i sell those.

I just hope you realize that:

1. Getting rid of things that won't perform well in the future is not rebalancing
2. No one knows which things won't perform well in the future.

I understand consolidating funds. And picking an AA you think will work for you is important. And I think you need to decide what categories of stocks you want in your 90% equities and rebalance to that.

Wow - aggressive as possible, short time frame - doesn't sound good. Aggressive investing actually requires a long time to realize, because in the short term it can eat your lunch and you need to be able to wait it out and stay invested for maybe even a decade to see the benefits (i.e. a pretty good chance equities will be higher in 10 years). OK - looks like you are willing to give it 10 years. That meets the minimum timeframe for aggressive investing at least.

 

[exnavynuke]

First, I'm assuming you own a home (outright or mortgage on it still, either way). If that's the case, I think your real estate exposure seems really high.

Second, I'm not a fan of target date funds in a portfolio unless they're used as the only thing in a portfolio. If you're astute enough to pick funds, having a fund changing it's AA on you constantly over time seems like more of a hindrance than a help.

+1 to the advice to put your funds in something that can easily analyze your assets as a whole though. I use personal capital and USAA for my tools as I don't have a Fidelity account.

 

[dvalley]

Thanks guys- @COcheesehead the screenshot I posted is from Personal Capital. I know where I stand today I want to know which of these are red-flags as we move forward. Can I convert some of these to dry-powder for the next opportunity be it stocks, real-estate etc.

@audreyh1- yes ma'am! agreed. I'm just looking for the smart folks here to give me a quick check over like if there's anything in my portfolio that's waiting to tank. REITs? MidCap stuff etc. I'm good with 10yrs but it's about all I'm willing to give it (ok +/- OMY).

So any red flags you guys see on there? anything I should change?

 

[dvalley]

@exnavynuke - yes I have a mortgage of about $287k (house worth about $600k these days).

The target fund is my old 401k with limited options. REIT was my idea of being a lazy landlord, but I do feel I might have over-exposure to REIT and mid-cap funds. As the interest rates rise the housing market demand should cool off? but then rent market might pick up so REIT might still be a good idea?

 

[COcheesehead]

Thanks guys- @COcheesehead the screenshot I posted is from Personal Capital. I know where I stand today I want to know which of these are red-flags as we move forward. Can I convert some of these to dry-powder for the next opportunity be it stocks, real-estate etc.

@audreyh1- yes ma'am! agreed. I'm just looking for the smart folks here to give me a quick check over like if there's anything in my portfolio that's waiting to tank. REITs? MidCap stuff etc. I'm good with 10yrs but it's about all I'm willing to give it (ok +/- OMY).

So any red flags you guys see on there? anything I should change?

If you already use PC, look for out of balance positions. There is no way to predict the future and if anyone tells you so, they don't know either.

 

[exnavynuke]

@exnavynuke - yes I have a mortgage of about $287k (house worth about $600k these days).

The target fund is my old 401k with limited options. REIT was my idea of being a lazy landlord, but I do feel I might have over-exposure to REIT and mid-cap funds. As the interest rates rise the housing market demand should cool off? but then rent market might pick up so REIT might still be a good idea?

Here's how I look at it. Right now, you've got what, ~$4xxk in investments and ~$400k equity in your home as your primary assets. With that said, before you invest anything in real estate outside your home, ~50% of your net worth is already "invested" in real estate. That's half your AA in real estate before you buy a single REIT at all. Every % of your investment portfolio in real estate pushes you even more exposed to the real estate market. If you're comfortable with that much exposure to that one asset class that's fine, I'm not so I thought I'd bring it up to you in case you hadn't thought about it that way.

For the old 401k, I'd look at rolling it over if you can.

 

[dvalley]

Impressive reverse-math there! Yes, investments about $460k, equity in primary residence is about $310k, cash about $60k. However, my REIT is only about 10% of the overall protfolio. Also, typically I don't think of my primary residence as part of my overall investment or AA strategy but point well taken...thanks!

As for the rollover, I thought about it but leaving it as 401k I thought I could tap into it earlier than the IRAs.

What about exposure to US stocks percentage wise, particularly mid-cap?

 

[exnavynuke]

I don't think the age 55 exception applies if you don't leave the company you have the 401k with at 55 and I'm not aware of any other early withdrawal exceptions for 401k's only. If there's other exceptions I'm not aware of I'd love to know about them though.

As for AA otherwise, that's really a personal risk tolerance question or a timing question, and since timing is pretty much impossible it's really just personal risk tolerance thing.

 

[DrRoy]

I want to know which of these are red-flags as we move forward.

I'm just looking for the smart folks here to give me a quick check over like if there's anything in my portfolio that's waiting to tank.

So any red flags you guys see on there? anything I should change?

.
Audreyh1 gave great advice. Red flags? What's going to tank? Go buy a crystal ball cause nobody knows. I would put a damper on your expectations, and shift the narrow sector investments to broad index ETFs like SPY or VTI. Just an opinion.

 

[Totoro]

The advice you get here regarding individual investments and future performance is at most worth what you paid for it, likely much less

Anywho, here's mine:

• Simplify: VTIAX, VXUS, VTSAX, SDY don't make sense as a collective to me for example. And what is FFNOX doing there if you have the previous ones?
• VIMAX is highly correlated with VTSAX. Sometimes in the past it wasn't, but mid cap companies are currently richly valued. I ditched mine a few months back. Simplify?
• Same thing with bonds. If you want bonds, choose one fund. I'd personally stay (very) far away from long duration bonds until you get at least >5% on them.
• Most dividend ETFs/blue chips are very richly valued. I'd build that down. Many of them are at P/E multiples of 25 and higher. Your SDY looks like it is at 22, so might not apply.

Individual stocks:

• AAPL is a dangerous bet in my book. Tech companies can go down in flames very rapidly, especially hardware. Nokia anyone?
• No clue about AEP.
• BRK.B should be fine on a 10 year horizon. When Buffet dies prepare for a bumpy 5 year ride while the next generation settles in.
• PAYX: haven't looked at it, but is that a hobby? it's a very small amount in your portfolio. If it's play money, fine. 25 on such a big total won't make a difference.
• NTNX: no opinion. Given that is a cloud platform (technology software) and fairly recently IPO'd, I'm assuming you have in-depth knowledge here. If not, ditch it.

In addition, I'd wait with major buy moves in indexes until at least February next year. There may be volatile times ahead. Strong end of year rally, switch in US leadership etc ..

 

[LOL!]

Fom the pic posted, I cannot tell what the asset allocation is. You have just listed a bunch of ticker symbols and no dollar nor percentage allocated amounts. You stated you wanted about 90% equities and 10% bonds. OK, but what kind of splits between US and foreign? Large-, mid-, small-cap? Value, blend, growth?

I know Personal Capital can tell you all that, but I guess you don't use that part of PC? PC can tell if your asset allocation is on the "efficient frontier", too.

I feel hoodwinked into even look at this thread, doesn't everybody else feel the same way? But I now see about "impressive reverse math", somebody did some extracurricular activity on that.