Help with investing

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Topic Author
Scooterd
Posts: 11
Joined: Wed Jul 21, 2021 2:30 pm

Help with investing

Post by Scooterd »

I am new to this forum. I am interested in an 80 20 % portfolio. If I had 205k ( cash)to invest what would be a good allocation and funds.

Emergency Fund: I have five months in my emergency fund

Debt: I have no debt. I am a renter

Tax Filing Status: Single

Tax Rate: Federal 22 % NJ 6.37

Residence New Jersey

Desired allocation 80 % stock 20 % bonds

The total size of the portfolio is $ 288,000

Current retirement assets

Cash: 205,000

Roth: Schwab

10,000 dollars

Baba 49.44 %
Facebook 49.56 %

Taxable Account
$73,363.61
ATT 1.9 %
APPL 14.3%
CMCSA 2.2 %
XOM 4.1 %
Dis 4.75 %

Cash 205,000


I am 55 I will have a pension and social security that will equal 5200 a month
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retired@50
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Re: Help with investing

Post by retired@50 »

Welcome to the forum. :happy

Have you spent any time reading about the Boglehead Investment Philosophy?

Here's a link: https://www.bogleheads.org/wiki/Boglehe ... philosophy

I can tell from some of the ticker symbols you've provided, it appears you're invested in individual stocks. Many Bogleheads prefer to use broadly diversified total stock market index funds. Do you have any interest in this approach?

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
Topic Author
Scooterd
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Joined: Wed Jul 21, 2021 2:30 pm

Re: Help with investing

Post by Scooterd »

Yes. I am looking for an 80 20 three-fund approach. Can you help?
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retired@50
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Re: Help with investing

Post by retired@50 »

Scooterd wrote: Sat Jul 24, 2021 2:59 pm Yes. I am looking for an 80 20 three-fund approach. Can you help?
Sure, that part seems pretty straightforward, just buy three ETFs. The challenge comes in dealing with taxes on the investments you currently hold.

Maybe these wiki links will help.

This wiki page is referring to selling one mutual fund to buy another, but the same ideas will hold for selling your individual stock positions. You'll have short-term or long-term gains (or losses) which might create a tax cost to switching. If you don't do your own income taxes, this might raise some questions.
https://www.bogleheads.org/wiki/Paying_ ... itch_funds

Here is the wiki page on setting up a three fund portfolio.
https://www.bogleheads.org/wiki/Three-fund_portfolio

As a sample, you could do something like this:
US Total Stock Market fund - 55%
International Stock Market Index - 25%
US Total Bond Market Fund - 20%

You'll just need to identify the most suitable funds or ETFs at your broker.

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
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BolderBoy
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Re: Help with investing

Post by BolderBoy »

Scooterd wrote: Sat Jul 24, 2021 2:59 pmYes. I am looking for an 80 20 three-fund approach. Can you help?
What I would do is use a two-fund approach in your taxable account using VTSAX (stock fund) and VWIUX (bond fund). Over time I'd sell the individual stocks you have and buy more VTSAX and VWIUX in the proportions needed to achieve your 80/20 AA.

This suggestion is a shot-in-the-dark based on the info you provided. This is essentially what I do in my own taxable account.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect
livesoft
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Re: Help with investing

Post by livesoft »

Scooterd wrote: Sat Jul 24, 2021 2:59 pm Yes. I am looking for an 80 20 three-fund approach. Can you help?
Sell all your individual stocks and buy Vanguard LifeStrategy Growth fund VASGX. It is an 80:20 index fund portfolio that is essentially the 3-fund portfolio with an insignificant bit of an international bond index fund.
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Topic Author
Scooterd
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Re: Help with investing

Post by Scooterd »

I will contribute about $ 2,500 a quarter. Do I use the same percentage when I contribute to the funds?
wetgear
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Re: Help with investing

Post by wetgear »

Scooterd wrote: Sat Jul 24, 2021 3:54 pm I will contribute about $ 2,500 a quarter. Do I use the same percentage when I contribute to the funds?
Contribute in the percentage that moves the total percentage back to 80/20. In months where no growth or losses happened that will be 80/20 also but in months where stocks grew more than bonds contribute more to bonds to move the percentages back. If stocks declined in value that month buy more of them.
Topic Author
Scooterd
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Re: Help with investing

Post by Scooterd »

Awesome. Thank you!
Topic Author
Scooterd
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Re: Help with investing

Post by Scooterd »

Ok. I think I have a better understanding of the three-fund portfolio. I will invest 55 percent in VTSAX. I will put 25 percent into an international fund and 20 percent in a bond fund. Which Vanguard bond fund and international would be best to choose? Thanks again.
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retired@50
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Re: Help with investing

Post by retired@50 »

Scooterd wrote: Mon Jul 26, 2021 12:43 pm Ok. I think I have a better understanding of the three-fund portfolio. I will invest 55 percent in VTSAX. I will put 25 percent into an international fund and 20 percent in a bond fund. Which Vanguard bond fund and international would be best to choose? Thanks again.
The default Boglehead selection for International stock is VTIAX, the Vanguard Total International Stock Index Fund.

The default Boglehead selection for US Bonds is VBTLX, the Vanguard Total Bond Market Index Fund.

Whether or not they are "best" for you, would be your decision. :wink: Maybe spend some time reading the fund description(s) linked below.

See links:
https://investor.vanguard.com/mutual-fu ... file/VTIAX

https://investor.vanguard.com/mutual-fu ... file/VBTLX

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
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ruralavalon
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Re: Help with investing

Post by ruralavalon »

It's good to see that you are debt free, and interested in using a very diversified three-fund type portfolio.



Scooterd wrote: Sat Jul 24, 2021 2:34 pm I am new to this forum. I am interested in an 80 20 % portfolio. If I had 205k ( cash)to invest what would be a good allocation and funds [emphasis added].

Emergency Fund: I have five months in my emergency fund

Debt: I have no debt. I am a renter

Tax Filing Status: Single

Tax Rate: Federal 22 % NJ 6.37

Residence New Jersey

Desired allocation 80 % stock 20 % bonds

The total size of the portfolio is $ 288,000

Current retirement assets

Cash: 205,000

Roth: Schwab

10,000 dollars

Baba 49.44 %
Facebook 49.56 %

Taxable Account
$73,363.61
ATT 1.9 %
APPL 14.3%
CMCSA 2.2 %
XOM 4.1 %
Dis 4.75 %

Cash 205,000


I am 55 I will have a pension and social security that will equal 5200 a month
Scooterd wrote: Sat Jul 24, 2021 2:59 pm Yes. I am looking for an 80 20 three-fund approach. Can you help?
Asset allocation.
Since you will have both a pension and Social Security benefits, an asset allocation of 80/20 at age 55 is within the range of what is reasonable in my opinion.



Additional information needed.
More information is necessary to answer your question about funds to use.

You said "Tax Rate: Federal 22 % NJ 6.37". It is important to make use of all available tax-advantaged accounts.

Is there a tax-advantaged plan offered at work like a 401k, 403b, 457b, SIMPLE IRA, SEP IRA or TSP? If so what funds are offered in the plan? Please give fund names, tickers and expense ratios. Also does the plan permit Roth contributions?

What fund firm or brokerage is your taxable brokerage account currently with?

About how many years until expected retirement? Do you have an estimate of your probable annual retirement living expenses?

How much in dollars do you currently contribute annually to to each account?

Please simply add this to your original post using the edit button (the pencil icon near the upper right corner of your), it helps a lot if all of your information is in one place.

Please use this format: Asking Portfolio Questions.



Fund selection.
In selecting funds to use strive for a combination of both broad diversification (to reduce risk) and low expense ratios (to increase your net returns).

In your Roth IRA at Schwab I suggest using Schwab Total Stock Market Index Fund (SWSTX) ER 0.03%, for both the current $10k balance and new contributions.

What funds to choose in your taxable account will depend where that account is located, and on what funds are available there commission free. What to funds choose in any work-based plan will depend on what funds are offered in the plan.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
yobyot
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Re: Help with investing

Post by yobyot »

Scooterd wrote: Sat Jul 24, 2021 2:59 pm Yes. I am looking for an 80 20 three-fund approach. Can you help?
Why three funds? How about 80% ITOT/VTI and 20% AGG/BND (if you can stand the stench of bonds; to me they are like that revolting smell of cooked road-kill). That's a portfolio you don't have to worry about -- and it costs nearly nothing to own.

Ignore the pundits who tell you you need "international exposure." That's a loser over the next 20 years.

Congrats on the $5200 pension benefit. To the extent that it's more SS than anything else, you can't buy better longevity insurance.
My retirement portfolio is so incoherent a famous advisor yelled at me and then declined. We'll still have more than enough.
TheDDC
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Re: Help with investing

Post by TheDDC »

Scooterd wrote: Sat Jul 24, 2021 2:59 pm Yes. I am looking for an 80 20 three-fund approach. Can you help?
You have no bonds now, just cash. Why would you want to kill future returns even more by adding in bonds? I personally use a two fund approach - VTSAX (Total US) and VTIAX (Total Intl). If you have a pension this is even more of a question...

-TheDDC
Rules to wealth building: 75-80% VTSAX piled high and deep, 20-25% VTIAX, 0% given away to banks.
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ruralavalon
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Re: Help with investing

Post by ruralavalon »

yobyot wrote: Mon Jul 26, 2021 3:28 pm
Scooterd wrote: Sat Jul 24, 2021 2:59 pm Yes. I am looking for an 80 20 three-fund approach. Can you help?
Why three funds? How about 80% ITOT/VTI and 20% AGG/BND (if you can stand the stench of bonds; to me they are like that revolting smell of cooked road-kill). That's a portfolio you don't have to worry about -- and it costs nearly nothing to own.

Ignore the pundits who tell you you need "international exposure." That's a loser over the next 20 years.

. . . . .
You must have a functioning crystal ball or time machine. I don't :( .
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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