Hello,
Emergency funds: Three to four months of expenses
Debt: - None
Tax Filing Status: Married Filing Jointly
Tax Rate: 24% Federal, 9.3% State
State of Residence: CA
Age: 29
Desired Asset allocation:
I am starting to invest - So far we are planning to invest total of $4K on an average every month and split it based on above. I will also have my stocks vest at the end of the year (~50K) and will be investing those in these funds.
Investing spit Identified -
1. VTSAX - 65% (US total market)
2. VEXAX - 15% (US extended market)
3. VXUS - 5% (international market)
4. VEMAX - 5% (Emerging market)
5. PRBLX - 5 % (ESG - Investing for conviction)
6. TQQQ - 5% (leverage short term)
Current retirement assets
None
Taxable - None
His 401k - None
His Roth IRA at Vanguard - None
His Rollover IRA at Schwab - None
Her SIMPLE IRA at Fidelity - None
Her Traditional IRA at Vanguard - None
_______________________________________________________________
Note: Total percentage of all the above accounts together (not each account individually) should equal 100%.
Questions:
Please let me know your thoughts and suggestions. Thanks!
Portfolio Review
Portfolio Review
Last edited by vainsingr on Thu Jul 29, 2021 5:10 pm, edited 1 time in total.
Re: Portfolio Review
Use #1 and 3. Skip the rest.
Feed it and don’t touch it. With conviction. See what I did there?!?
Edited because I didn’t pay enough attention.
Feed it and don’t touch it. With conviction. See what I did there?!?
Edited because I didn’t pay enough attention.
Last edited by Enjoy11 on Thu Jul 29, 2021 5:50 pm, edited 1 time in total.
Re: Portfolio Review
One of the main principles of Boglehead philosophy is that you should invest in the market into broad based index funds (which you appear to meet with your selection), but also avoid picking one sector or another as a winner and tilt towards it (which is what I think you are violating).
If you are investing in a total stock market index, and on top of it investing into the extended market index, you are essentially strongly tilting towards mid-cap and small-cap. Implicitly placing a bet that mid-caps and small-caps will outperform the large-caps in the long run. Are you strongly convinced enough to place that bet for years long? Or will you bail out if they start lagging the broad market index returns, reflected by the total stock market index?
Ditto with the total international market index and the emerging markets. Emerging markets are already contained in VXUS according to their market weight. Why do you want to place additional bet on the EM?
Similarly, (5) and (6). Are you going to be convinced enough to keep plowing money into ESG investments and leveraged Nasdaq index? Especially TQQQ is meant to be for short-term trading, not hold forever.
I'd say simplify, just hold VTSAX and VXUS. 80% to 20%. Done.
If you are investing in a total stock market index, and on top of it investing into the extended market index, you are essentially strongly tilting towards mid-cap and small-cap. Implicitly placing a bet that mid-caps and small-caps will outperform the large-caps in the long run. Are you strongly convinced enough to place that bet for years long? Or will you bail out if they start lagging the broad market index returns, reflected by the total stock market index?
Ditto with the total international market index and the emerging markets. Emerging markets are already contained in VXUS according to their market weight. Why do you want to place additional bet on the EM?
Similarly, (5) and (6). Are you going to be convinced enough to keep plowing money into ESG investments and leveraged Nasdaq index? Especially TQQQ is meant to be for short-term trading, not hold forever.
I'd say simplify, just hold VTSAX and VXUS. 80% to 20%. Done.
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Re: Portfolio Review
1. VTSAX and 3. VXUS are sufficient.
Is there a reason you are using a mutual fund for the US Total Stock Market (TSM) and an ETF for the International TSM? It’s fine to do so, but I was expecting to see either mutual funds (VTSAX/VTIAX) or ETFs (VTI/VXUS).
Is there a reason you are using a mutual fund for the US Total Stock Market (TSM) and an ETF for the International TSM? It’s fine to do so, but I was expecting to see either mutual funds (VTSAX/VTIAX) or ETFs (VTI/VXUS).
Re: Portfolio Review
Extended market seems to give high returns, so I'm more inclined towards it at this point.lakpr wrote: ↑Thu Jul 29, 2021 5:10 pm One of the main principles of Boglehead philosophy is that you should invest in the market into broad based index funds (which you appear to meet with your selection), but also avoid picking one sector or another as a winner and tilt towards it (which is what I think you are violating).
If you are investing in a total stock market index, and on top of it investing into the extended market index, you are essentially strongly tilting towards mid-cap and small-cap. Implicitly placing a bet that mid-caps and small-caps will outperform the large-caps in the long run. Are you strongly convinced enough to place that bet for years long? Or will you bail out if they start lagging the broad market index returns, reflected by the total stock market index?
Ditto with the total international market index and the emerging markets. Emerging markets are already contained in VXUS according to their market weight. Why do you want to place additional bet on the EM?
Similarly, (5) and (6). Are you going to be convinced enough to keep plowing money into ESG investments and leveraged Nasdaq index? Especially TQQQ is meant to be for short-term trading, not hold forever.
I'd say simplify, just hold VTSAX and VXUS. 80% to 20%. Done.
PRBLX is something my wife wants to invest for moral values like clean energy etc.
Re: Portfolio Review
PRBLX = Parnassus Core Equity Fund (for the benefit of those who are reading this thread later), has a very high expense ratio of 0.84%
Vanguard has cheaper ESG ETF, ESGV for an expense ratio of 0.12%.
https://investor.vanguard.com/etf/profile/fees/esgv
Re: Portfolio Review
Thanks. Will look into this.lakpr wrote: ↑Thu Jul 29, 2021 5:32 pmPRBLX = Parnassus Core Equity Fund (for the benefit of those who are reading this thread later), has a very high expense ratio of 0.84%
Vanguard has cheaper ESG ETF, ESGV for an expense ratio of 0.12%.
https://investor.vanguard.com/etf/profile/fees/esgv
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- Joined: Thu Apr 23, 2020 12:44 pm
Re: Portfolio Review
Welcome to the forum.
Do you have access to employer-sponsored retirement plans (401k, 403b, etc)? If so, is there an employer match?
In your tax brackets, I would prioritize maxing employer-sponsored plans and Roth IRAs for both of you, before doing any taxable investing.
Only after maxing those buckets would I invest in a taxable account in things like VTSAX and VTIAX. Those are all you need, especially since you're new investors.
See these wiki articles for background information that might be helpful:
Bogleheads investing philosophy
Prioritizing Investments
Three-fund portfolio
Do you have access to employer-sponsored retirement plans (401k, 403b, etc)? If so, is there an employer match?
In your tax brackets, I would prioritize maxing employer-sponsored plans and Roth IRAs for both of you, before doing any taxable investing.
Only after maxing those buckets would I invest in a taxable account in things like VTSAX and VTIAX. Those are all you need, especially since you're new investors.
See these wiki articles for background information that might be helpful:
Bogleheads investing philosophy
Prioritizing Investments
Three-fund portfolio