help with my portfolio

misnamed · 2017-02-27T08:11:05+00:00

Agree w/the other comment. First think stock/bond split, then US/international split, then think about what tilts you want to things like small cap, emerging markets, etc.... A starting point: age-minus-10 in bonds and 50/50 US/international stocks - tilt from there toward risk, home, etc... as desired.

misnamed · 2017-02-27T08:08:13+00:00

IMHO you're not asking exactly the right questions. First of all, the return ranges go off the charts pretty fast in your survey. Also, fees aren't usually flat but AUM for these things. I suspect on a flat-fee model you'd have a hard time sustaining this thing.

Mostly, though, I'm not looking for any particular rate of return - I'm looking for something that will create a reasonable baseline allocation, then rebalance for me (and keep me on some glide path) while keeping tax efficiency in mind.

misnamed · 2017-02-27T07:24:18+00:00

By the tie in to The Winter Solider it was one of my favorite shows.

I've had to tell a lot of people to hang in there for exactly that moment. So good.

misnamed · 2017-02-26T03:19:41+00:00

Bogleheads has a lot of threads/pages. See also tax gain harvesting.

misnamed · 2017-02-26T03:18:16+00:00

They are basically like Treasury bonds in terms of your total portfolio, so yes: they would replace other bond holdings. The catch is that rebalancing with EE bonds is hard (I bonds you can sell as needed, but EE you'll want to wait until they double in value after 20 years, so think of them like a long-term bond holding).

misnamed · 2017-02-25T03:09:25+00:00

Proportional weight to other non-CA holdings makes sense. Currently you're more tilted toward US than other countries - that strikes me as strange. Mostly, though, it's your exposure to USD that has me worried.

misnamed · 2017-02-25T03:06:22+00:00

Mostly for currency reasons. There's more than one way to get to 50%+ CAD (e.g. hedged stock indexes) but in a bond-light portfolio a lot of it will have to be done on the stock side, one way or another.

misnamed · 2017-02-24T06:07:23+00:00

starting out on a journey! in the end i wanna be standing at the beginning with you

misnamed · 2017-02-24T03:15:10+00:00

If you're looking to 'dump' it into a taxable account, consider Vanguard Intermediate-Term Tax Exempt as an alternative to Vanguard Total Bond (and certainly don't use a Target Retirement fund in taxable). Taxable bonds and high-turnover balanced funds will eat away your returns in taxable accounts by eating them away with (you guessed it!) taxes. Better to hold total-market stock funds and tax-exempt bond funds. Also see sidebar link.

misnamed · 2017-02-24T03:09:14+00:00

I've been wondering a lot lately at the tilt toward US that ex-US investors propose. I assume it's one of the following: (1) you read some books that suggest tilting US, but they were written for US investors, or (2) you are looking too much at recent data, and assuming that what did well in recent history will do well in the future.

Both, of course, are really dangerous games to play. If anything, you should tilt toward your home country/currency. I recommend a baseline of 50% in CAD - that is: stocks/bonds held in Canada and denominated in Canadian dollars. From there, diversify globally, not just toward the US.

Opinions will differ and your mileage my vary, but I'd start with 30% CA stocks, 20% CA bonds, then add global ex-CA either in proportions to market cap or just via total ex-CA funds, depending on what's available. In the end, you might end up with something like 40% CA stock, 20% CA bond, 40% ex-CA stock.

So figure out a stock/bond target, but also figure out a CA/ex-CA exposure ratio. Whatever you do, though: don't follow US investing advice designed for US-as-home-country investors or put too much weight on recent returns. Having a lot in USD will subject you to big currency swings not related to your own spending/saving market.

misnamed · 2017-02-24T03:05:02+00:00

Try to include full names (not just tickers), percentages and expense ratios to help us better help you.

It's in the sidebar. Maybe I need to make it more prominent. I'm still (and always) amazed, though, that people just assume we'll have tickers memorized. I mean I'm good but I'm not that good.

misnamed · 2017-02-22T22:08:18+00:00

Guess I was a little loose with language - I meant that an ENTJ tends to keep 'doing stuff' to fill up life. But yes, an ENTJ who stops doing stuff can definitely get bored.

misnamed · 2017-02-22T05:29:28+00:00

Let's not forget "while retaining a highly scientific mind"

misnamed · 2017-02-22T04:39:55+00:00

Hey hey hey guys Bob over here gets to design sheds. SHEDS! Me, I'm still on toilets.

misnamed · 2017-02-22T04:38:42+00:00

Lesson 3: how to build a sandwich

misnamed · 2017-02-22T00:39:52+00:00

Sure thing - happy to help. It really can't hurt to get professional help as long as you take some knowledge into the room with you. It's always possible they'll give bad advice, but if you have some feedback from here and Bogleheads you'll at least have some sense if you're getting similar input on all sides. That's the ideal scenario: what you see here and on Bogleheads and get from a professional are all aligned!

misnamed · 2017-02-21T20:14:52+00:00

Precisely - those age-based rules assume a more conventional trajectory of net worth, which can be misleading for outliers. And while I think it does make sense to talk with a professional, I also don't subscribe to the idea that you can't do it yourself with enough other inputs (from forums, web research and reading books).

That said, my advice is to split the difference: take your reading/research and bring it to the table in the meeting and see what they think about it. It helps if you know some things yourself going in so you can gauge their advice.

Probably the biggest thing they can help you think through is tax efficiency, since these funds being mostly in taxable accounts will have a big impact on taxation going forward! Consider, too, that part of your own 'job' going forward is to properly manage your existing net worth - small differences in how you treat this nest egg will amount to large differences in outcome, making it a very valuable way to spend your time.

Finally, I would suggest posting to the Bogleheads Forum - a lot of their participants are relatively high net worth individuals (also following smart passive investing strategies) so their experiences may be particularly helpful.

misnamed · 2017-02-21T07:51:05+00:00

OK, cool, that explains it! Yeah - I personally try to keep my harvesting simple (e.g. sell entire holdings versus just certain lots) but there's no one way to do it. The other thing to remember though is that you can tax gain harvest if you're between jobs or in a low income bracket for whatever reason. If you do go with Spec ID for shares, just make sure you keep really good track - fortunately if they are new since 2012 they should be 'covered shares' which means your brokerage should keep track for you.

OH and one thing to be really careful of: if Wealthfront is buying/selling but they only track what's in Wealthfront you could end up messing up your TLH with other buys/sells in other accounts (wash sales). I just saw this in a thread on Bogleheads and thought of our comment thread here: "I used Betterment a couple years ago. I had a 30 page 1099 B/DIV. It was absolutely insane." It's that kind of stuff I want to avoid personally ;)

misnamed · 2017-02-21T06:11:02+00:00

Good point re:100% long-term gains - yes, would wait for short to become long. But (you prob know this already) that means you may need to put a hold on an automatic trading/rebalancing they do (I'm not entirely sure what the settings/options are) - otherwise it will keep racking up games.

I am sort of neither here nor there on robo-traders and their tax benefits. I always worry that if they go under in the future or if you leave them they'll leave you with a huge pile of tax lots and associated headaches. That said, you could go for it - but I'd go all the way either way (i.e. use one robo-advisor for all taxable accounts or not at all). Also, with them doing things automatically for you, you could mess up your own attempts to tax-loss harvest/gain depending on your tax year (e.g. I'm not sure how it would work if you were trying to tax-gain harvest in a low-income year).

At a glance it looks to me like you're ~$105K in US and ~$15K in international, so around 85/25 w/in stocks. Maybe you put one of the numbers in wrong, though?

misnamed · 2017-02-21T05:53:05+00:00

The way to do that if OP wants in this case would be to tweak the ratio of Institutional Index and Extended Market. If market default ratio is something like 80%/20%, he could do more like 60%/40% for example, or even 50%/50%.

misnamed · 2017-02-21T05:51:07+00:00

American funds are notoriously expensive. Some carry massive loads and others just have high expense ratios. Given your other options the Vanguard funds are definitely the way to go. You can roll your own Total Market index and/or small-cap tilt between the Instutional Index and Extended Market funds. Beyond that you have Total International and Total Bond. That's a good 3-fund portfolio.

Others will say it's too much in bonds (easy to say when stocks are on a roll), but I'd start with 20% Total Bond, 40% Total International, 30% Institutional Index and 10% Extended Market or similar.

misnamed · 2017-02-21T05:45:30+00:00

Nice - clean, cheap, simple, diversified, tax-efficient. With Robinhood and Wealthfront I wonder: how's it going to feel maintaining those as your portfolio grows and has taxable gains? I'd personally find it easier to consolidate taxable in one place (maybe making the switch now before gains mount).

Personally, I think you're heavy in US relative to international. I would be especially careful of that since the US has had a pretty good run recently. The global market is only about 50% US. I use 50/50 and can see tilting up to, say 60% - Vanguard's white papers (and target funds) point to around that. Your current tilt is really really high.

With your income, you may be able to max out tax-advantaged accounts and then some, so consider things like an HSA or Series I And EE bonds (see sidebar link for the latter). Probably goes without saying, but: try to rebalance in tax-advantaged accounts to avoid realizing taxable gains.

When it comes to saving for the house: keep that in cash/CDs if it's a shorter-term goal.

misnamed · 2017-02-20T23:16:03+00:00

No problem! Odds are very high that advisor got a kickback (commission) from selling you that fund. It happens - I also started out in high-fee funds until I learned otherwise! Glad to hear you're mostly dealing with Schwab now - definitely no need to pay more than .2% ER on even a niche fund (or .1% on a total-market one).

So yeah, if you can sell it incrementally at 0%, that's great. If you are stuck at 15% for the foreseeable future, I'd just bite the bullet and make the switch. If you happen to have something with losses you can use to offset it, that's another possibility, though I know everything's high right now.

misnamed · 2017-02-20T23:06:14+00:00

Also in taxable accounts the taxation is less than great - much better to have qualified dividends and stock growth from an efficiency standpoint. On a personal note: I'm almost done taking my money out of Lending Club (final notes coming due)! Returns were OK, taxes were a hassle as was reinvestment (always money on the sidelines).

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