Excel for holistic balancing of portfolio

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Timon0201
Posts: 98
Joined: Thu Oct 23, 2014 3:20 am

Excel for holistic balancing of portfolio

Post by Timon0201 »

I am very comfortable investing on my own when I look at my accounts individually or per group type (all taxable accounts/all retirement accounts, etc)

My one big downfall is struggling to view ALL my accounts (401k/ira/taxable, etc) as one big fund and then allocate in the most tax efficient manner.

I'm curious if there is a spreadsheet people use for these types of things and if you need to rebalance, how to do that.

I am debating getting an advisor just to deal with this aspect because, for my brain, it's the most complex part as contributions into the 401k vs my taxable accounts vary significantly so the unbalancing is constantly evolving.

Any guidance would be appreciated!
dcabler
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Location: TX

Re: Excel for holistic balancing of portfolio

Post by dcabler »

There appears to be a couple of parts to your question, but perhaps I'm misreading.
Tax efficient placement across different accounts
Once done, how to rebalance once that's done.

For the first one, I suggest reading the following BH wiki: https://www.bogleheads.org/wiki/Tax-eff ... _placement. I follow the suggestion there with all of my bond holdings in my tax advantaged accounts and my stock holdings in both tax advantaged and taxable accounts.

For the second one, I also suggest you go to the following BH wiki where there are some example spreadsheets for rebalancing near the bottom of the page: https://www.bogleheads.org/wiki/Rebalancing


The reality can be a little messy, but relatively easy to deal with via spreadsheets.
I have multiple accounts, but to keep things simpler when it comes to rebalancing, I mentally group accounts together when thinking about AA. If you do this, then how you group things really depends on your situation and the total dollar amount you have in each account, and into which accounts new money is being added.

1. My primary portfolio. This consists of a taxable brokerage account, my IRA, my wife's IRA, and my current 401K. It is the majority of my total investments.
Taxable brokerage account: Stock fund only
My IRA: Stock and bond
My wife's IRA: bond only
Current 401K: bond only. When I retire, this account will be closed and the proceeds rolled over to my IRA.

Because I have both stock and bond in my IRA, whenever a rebalance is called for in this portfolio, I can do so by buying or selling stock only in this account and avoid any taxable event. That makes the calculation for me very simple. The capacity to sell stock and buy more bonds is not unlimited, however. At some point, it's possible that I run out of stock holdings in my IRA after multiple rebalances that require me to sell stock to buy bonds. At some point in the not-too-distant future I'll start Roth conversions and will need to consider that as well.

2. A deferred comp account from a former employer. The amount in this account is well below 1% of my portfolio. So I just reflect a full AA of stock/bond in it and rebalance only within it whenever that's called for. It just isn't worth it to add the extra effort by making its holdings part of my primary portfolio given how puny the amount is. Besides, it's been in payout mode for 10 years with only one more payout to go next year, then it's liquidated and I don't have to think about it anymore and I can delete the entire section from my tracking spreadsheet. :D

3. My HSA. It is totally invested and I'm not currently using it to pay medical expenses. Again, to keep things simple, I mirror the same mix of stocks and bonds wholly within this account as I do in my primary portfolio from #1. Any rebalancing needed can be done wholly within this account.

Many ways to crack this nut - this is just an example of what one person (me) has chosen to do.

Cheers.
livesoft
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Re: Excel for holistic balancing of portfolio

Post by livesoft »

Timon0201 wrote: Fri May 07, 2021 2:46 am Any guidance would be appreciated!
I do not use a spreadsheet. Instead, I use the tools provided by my investment firms. They make it easy. Would you mind naming the firms you use, so that I might be able to guide you better?
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Topic Author
Timon0201
Posts: 98
Joined: Thu Oct 23, 2014 3:20 am

Re: Excel for holistic balancing of portfolio

Post by Timon0201 »

I'm in talks with vanguard PAS, but I am probably going with Rick ferri's 2nd opinion because once a plan is in place, I can handle it
Topic Author
Timon0201
Posts: 98
Joined: Thu Oct 23, 2014 3:20 am

Re: Excel for holistic balancing of portfolio

Post by Timon0201 »

dcabler wrote: Fri May 07, 2021 5:56 am
Many ways to crack this nut - this is just an example of what one person (me) has chosen to do
Thank you for your thorough reply! I will review!
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