Asking for portfolio feedback

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
Katoswims
Posts: 48
Joined: Fri Nov 06, 2020 8:44 pm

Asking for portfolio feedback

Post by Katoswims »

Hello All,

We've had some financial updates since my last post. Here is a synopsis of our current situation.
We would love any feedback, advice or comments. Please let me know if I need to provide more specifics.
We feel blessed. I only post because I still feel that we could solidify our position, or get complacent and somehow "blow it".
Thanks for your thoughts !


Emergency Funds: 120,000
Debt: 104,000 Lake Lot
Tax Filling Status: Married filing jointly – two minor dependents (20 & 16); eldest son (23yr) seems to be independent and doing well
Tax Rate: 32 to 35% Federal, 0 state
State: Texas
Ages: He 59 & Her 57
He-not working.
She- working and earning $250,000 average.
Desired Asset Allocation: 30% Stocks, 70% Bonds/Fixed

Current Retirement Assets- Total Investible Assets = $4,721,380
Taxable Cash
$110,000 -2.3%

Her IRA:
Cash $36,200- .77%
FXNAX $109,145-2.3%
FSKAX $19,400-.41%

Her 401K:
FXNAX $290,009-6.1%
FXAIX $277,000-5.9%

His IRA:
CORE Money Market -$105,500- 2.2%
FBNDX $105,333-2.2%
FSKAX $32,100- .68%
FXNAX $95,900-2.0%
FZILX $ 50,600- 1.1%
FZROX $305,600- 6.48%
Fidelity Stock SMA - $791,800 managed (expense ratio .40)- 16.77%
Fidelity Bond SMA- $1,751,800 managed (expense ratio .63)- 37.11%

His Roth IRA:
FSKAX $77,800- 1.65%

Annuities:
Her Mass General Fixed Annuity: pays 2%
$407,093- 8.64%
His Mass General Fixed Annuity: pays 2%
$152,600- 3.3%

MegaCorp RSU’s:
$3,500- < 1%

College Funds
• 20yr old has approximately 2 years remaining for master’s degree.
He has tuition covered and $29,000 in his 529.
• 16yr old has 4 years of In-State tuition covered.
She has $63,000 in her 529.

Two questions:
1) How are we looking in a macro sense?
2) Should we payoff the lake lot with taxable cash?
Any feedback will be appreciated! Thanks
pkcrafter
Posts: 15461
Joined: Sun Mar 04, 2007 11:19 am
Location: CA
Contact:

Re: Asking for portfolio feedback

Post by pkcrafter »

Need fund names.


Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.
Finridge
Posts: 1096
Joined: Mon May 16, 2011 7:27 pm

Re: Asking for portfolio feedback

Post by Finridge »

pkcrafter wrote: Mon Apr 12, 2021 10:17 pm Need fund names.


Paul
Agreed, I think it would be really, really helpful if the OP edited their post to add in the fund names. Not everyone has all the ticker symbols memorized.
HomeStretch
Posts: 11416
Joined: Thu Dec 27, 2018 2:06 pm

Re: Asking for portfolio feedback

Post by HomeStretch »

+1 to adding fund names

What is the interest rate on the lake lot mortgage? Do you intend to hold it as is, build on it or sell it?

Your desired equity allocation is 30%. Is your actual portfolio equity % at 30% now? Your prior thread had your actual equity allocation at <15%.

Consider opening and contributing to a Roth IRA for Her to start the 5-year clock on initial Roth IRAs. If your income is too high for direct Roth contributions, she could rollover her traditional IRA into her 401k (assuming the plan accepts rollovers in). This would allow her to do a backdoor Roth without being subject to pro-rated taxes. BH wiki page on Backdoor Roth:
https://www.bogleheads.org/wiki/Backdoor_Roth

Is your 2021 Federal marginal tax rate still 32-35%? Your spouse’s income of $250k less the standard deduction puts you in the 24% bracket. Is your investment income subject to tax > $100k per year?

Your last thread had monthly spending at $16k. Does your spouse’s salary cover all expenses now (including income taxes and healthcare) or are you withdrawing from your portfolio (which includes spending investment income)?

Have you estimated retirement income and retirement expenses? Have you estimated your expected annual withdrawal rate from your portfolio?

Are there advisor fees on the Fidelity SMA investments in addition to the ERs of 0.40-0.63%? With 70% of the SMA investments in bonds, are you generating enough yield after taxes and fees/ERs to keep up with inflation? With one spouse retired in your late 50s with a low portfolio equity allocation of 30% and the higher investment costs of a managed portfolio, it would be concerning in my opinion if your portfolio (excluding reasonable withdrawals) is not set up to at least keep up with inflation over your retirement horizon.
Topic Author
Katoswims
Posts: 48
Joined: Fri Nov 06, 2020 8:44 pm

Re: Asking for portfolio feedback

Post by Katoswims »

Here is an attempt to make our situation more transparent. I've added details based on your feedback. Thanks again for taking the time to reply !

Emergency Funds: 120,000
Debt: 104,000 Lake Lot – interest rate 5.5%. Will be paid off 8/2034 currently.
Tax Filling Status: Married filing jointly – two minors dependents (20 & 16)
Tax Rate: 32 to 35% Federal, 0 state
State: Texas
Ages: He 59 & Her 57
He-not working.
She- working and earning $250,000 average.

Desired Asset Allocation: 30% Stocks, 70% Bonds/Fixed
Current AA: 32.99% Stocks, 49.71% Bonds, 11.94% MYGA (annuity), Cash 5.27%, RSU’s< 1%

Current Retirement Assets- Total Investible Assets = $4,721,380

Taxable Cash
$110,000 -2.3%

Her IRA:
Cash $36,200- .77%
Fidelity US Bond Index (exp 0.02) = $109,145-2.3%
Fidelity Total Market Index (exp 0.02) =FSKAX $19,400-.41%

Her 401K:
Fidelity US Bond Index (exp 0.02) = $290,009-6.1%
Fidelity 500 Index Fund (exp 0.02) = $277,000-5.9%

His IRA:
CORE Money Market =$105,500- 2.2%
Fidelity Investment Grade Bond Fund (exp 0.45) = $105,333-2.2%
Fidelity Total Market Index Fund (exp 0.02) = $32,100- .68%
Fidelity US Bond Index (exp 0.02) = $95,900-2.0%
Fidelity Zero International Index Fund (exp 0.00) = $ 50,600- 1.1%
Fidelity Zero Total Market Index (exp 0.00) = $305,600- 6.48%
Fidelity Stock SMA = $791,800 managed (expense ratio .40)- 16.77% -The Fidelity Managed Stock portfolio is outpacing the S&P 500 YTD by 1.3% including fees.

Fidelity Bond SMA= $1,751,800 managed (expense ratio .63)- 37.11% - The Fidelity Managed Bond portfolio is lagging the Bloomberg Barclays Aggregate Bond index by -1.17% including fees.

His Roth IRA:
Fidelity Total Market Index (exp 0.02) = $77,800- 1.65%

Annuities:
Her Mass General Fixed Annuity: pays 2%
$407,093- 8.64%
His Mass General Fixed Annuity: pays 2%
$152,600- 3.3%

MegaCorp RSU’s:
$3,500- < 1%

College Funds
• 20yr old has approximately 2 years remaining for master’s degree.
He has tuition covered and $29,000 in his 529.
• 16yr old has 4 years of In-State tuition covered.
She has $63,000 in her 529.

Two questions:
1) How are we looking in a macro sense?
2) Should we payoff the lake lot with taxable cash?
Any feedback will be appreciated! Thanks
User avatar
retired@50
Posts: 12821
Joined: Tue Oct 01, 2019 2:36 pm
Location: Living in the U.S.A.

Re: Asking for portfolio feedback

Post by retired@50 »

Katoswims wrote: Tue Apr 13, 2021 9:23 am Here is an attempt to make our situation more transparent. I've added details based on your feedback. Thanks again for taking the time to reply !

Emergency Funds: 120,000
Debt: 104,000 Lake Lot – interest rate 5.5%. Will be paid off 8/2034 currently.
...
2) Should we payoff the lake lot with taxable cash?
Any feedback will be appreciated! Thanks
Yes. Payoff the lake lot.

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
User avatar
dogagility
Posts: 3237
Joined: Fri Feb 24, 2017 5:41 am

Re: Asking for portfolio feedback

Post by dogagility »

Katoswims wrote: Mon Apr 12, 2021 9:33 pm His IRA:
CORE Money Market -$105,500- 2.2%
FBNDX $105,333-2.2%
FSKAX $32,100- .68%
FXNAX $95,900-2.0%
FZILX $ 50,600- 1.1%
FZROX $305,600- 6.48%
Fidelity Stock SMA - $791,800 managed (expense ratio .40)- 16.77%
Fidelity Bond SMA- $1,751,800 managed (expense ratio .63)-
37.11%
I would transfer all assets from the separately managed accounts to index funds. The expense ratio is costing you 13K/year... for likely no higher return.
Make sure you check out my list of certifications. The list is short, and there aren't any. - Eric 0. from SMA
Topic Author
Katoswims
Posts: 48
Joined: Fri Nov 06, 2020 8:44 pm

Re: Asking for portfolio feedback

Post by Katoswims »

retired@50 wrote: Tue Apr 13, 2021 9:25 am
Katoswims wrote: Tue Apr 13, 2021 9:23 am Here is an attempt to make our situation more transparent. I've added details based on your feedback. Thanks again for taking the time to reply !

Emergency Funds: 120,000
Debt: 104,000 Lake Lot – interest rate 5.5%. Will be paid off 8/2034 currently.
...
2) Should we payoff the lake lot with taxable cash?
Any feedback will be appreciated! Thanks
Yes. Payoff the lake lot.

Regards,
Thanks. I will be doing that.
Topic Author
Katoswims
Posts: 48
Joined: Fri Nov 06, 2020 8:44 pm

Re: Asking for portfolio feedback

Post by Katoswims »

dogagility wrote: Tue Apr 13, 2021 11:07 am
Katoswims wrote: Mon Apr 12, 2021 9:33 pm His IRA:
CORE Money Market -$105,500- 2.2%
FBNDX $105,333-2.2%
FSKAX $32,100- .68%
FXNAX $95,900-2.0%
FZILX $ 50,600- 1.1%
FZROX $305,600- 6.48%
Fidelity Stock SMA - $791,800 managed (expense ratio .40)- 16.77%
Fidelity Bond SMA- $1,751,800 managed (expense ratio .63)-
37.11%
I would transfer all assets from the separately managed accounts to index funds. The expense ratio is costing you 13K/year... for likely no higher return.
Thanks. I will possibly follow your advice, though I'm going to let this "experiment" play out at least until yearend. It's also my understanding that while bonds show declines, they pay out in full if held for the duration. This is new to me so I could be wrong.

Fidelity Stock SMA = $791,800 managed (expense ratio .40)- 16.77% -The Fidelity Managed Stock portfolio is outpacing the S&P 500 YTD by 1.3% including fees.

Fidelity Bond SMA= $1,751,800 managed (expense ratio .63)- 37.11% - The Fidelity Managed Bond portfolio is lagging the Bloomberg Barclays Aggregate Bond index by -1.17% including fees.
User avatar
dogagility
Posts: 3237
Joined: Fri Feb 24, 2017 5:41 am

Re: Asking for portfolio feedback

Post by dogagility »

Katoswims wrote: Wed Apr 14, 2021 1:04 pm
dogagility wrote: Tue Apr 13, 2021 11:07 am
Katoswims wrote: Mon Apr 12, 2021 9:33 pm His IRA:
CORE Money Market -$105,500- 2.2%
FBNDX $105,333-2.2%
FSKAX $32,100- .68%
FXNAX $95,900-2.0%
FZILX $ 50,600- 1.1%
FZROX $305,600- 6.48%
Fidelity Stock SMA - $791,800 managed (expense ratio .40)- 16.77%
Fidelity Bond SMA- $1,751,800 managed (expense ratio .63)-
37.11%
I would transfer all assets from the separately managed accounts to index funds. The expense ratio is costing you 13K/year... for likely no higher return.
Fidelity Stock SMA = $791,800 managed (expense ratio .40)- 16.77% -The Fidelity Managed Stock portfolio is outpacing the S&P 500 YTD by 1.3% including fees.

Fidelity Bond SMA= $1,751,800 managed (expense ratio .63)- 37.11% - The Fidelity Managed Bond portfolio is lagging the Bloomberg Barclays Aggregate Bond index by -1.17% including fees.
A few things. One year of outperformance means little. Actively managed funds are overwhelmingly unlikely to outperform their index (after fees) over extended periods. This can be seen in SPIVA reports.

I'm not familiar with these Fidelity SMA projects. Are you paying a management fee (in addition to the expense ratio)?
Make sure you check out my list of certifications. The list is short, and there aren't any. - Eric 0. from SMA
Topic Author
Katoswims
Posts: 48
Joined: Fri Nov 06, 2020 8:44 pm

Re: Asking for portfolio feedback

Post by Katoswims »

dogagility wrote: Wed Apr 14, 2021 3:25 pm
Katoswims wrote: Wed Apr 14, 2021 1:04 pm
dogagility wrote: Tue Apr 13, 2021 11:07 am
Katoswims wrote: Mon Apr 12, 2021 9:33 pm His IRA:
CORE Money Market -$105,500- 2.2%
FBNDX $105,333-2.2%
FSKAX $32,100- .68%
FXNAX $95,900-2.0%
FZILX $ 50,600- 1.1%
FZROX $305,600- 6.48%
Fidelity Stock SMA - $791,800 managed (expense ratio .40)- 16.77%
Fidelity Bond SMA- $1,751,800 managed (expense ratio .63)-
37.11%
I would transfer all assets from the separately managed accounts to index funds. The expense ratio is costing you 13K/year... for likely no higher return.
Fidelity Stock SMA = $791,800 managed (expense ratio .40)- 16.77% -The Fidelity Managed Stock portfolio is outpacing the S&P 500 YTD by 1.3% including fees.

Fidelity Bond SMA= $1,751,800 managed (expense ratio .63)- 37.11% - The Fidelity Managed Bond portfolio is lagging the Bloomberg Barclays Aggregate Bond index by -1.17% including fees.
A few things. One year of outperformance means little. Actively managed funds are overwhelmingly unlikely to outperform their index (after fees) over extended periods. This can be seen in SPIVA reports.

I'm not familiar with these Fidelity SMA projects. Are you paying a management fee (in addition to the expense ratio)?
I totally agree that one year means little. Expense ratio includes all fees. No added fees. I was primarily attracted by the bond side of these accounts. The stock account really is an experiment, which will likely end with the result you mention over the long term. We are tightening up AA and expenses, just not as fast as some would like ! I don’t mind critique of strategy. Part of what I enjoy about this site. Thanks
Post Reply