So while I was initially looking to introduce a few bond funds, I started to dig deeper. I realized a total portfolio overhaul was in order. Before I knew it, I was starting from scratch in both our Roth IRAs. Trading actively managed funds for even more index funds (actually LESS total index funds - our new portfolio gets us down to five funds total).
Because my 401(k) has few investment options (although good ones) the rework in that account has been minimal.
One of the tools I have used for years (but probably not given enough credence) is Financial Engines, which is a perk provided by my employer. Our new portfolio is almost entirely based on the tool's recommendations. I also have been using The Bogleheads' Guide to Investing
, as well as the Boglehead forums to validate and research the Financial Engines recommendations.
4 comments:
Would you choose to hold the same fund in 2 Roth IRAs, or do you consolidate them for simplicity? Especially now that Vanguard offers Admiral status for funds at $10k instead of $50k.
For a long time, this was our portfolio, because we wanted to get the lower ER of Admiral shares:
His 401(k):
- Total Bond Market Index
- REIT index
- Small Cap Value Index
- Total Stock Market Index
His Roth:
- Total Stock Market Index
My Roth:
- Total International Index
Taxable:
- Total Stock Market Index
For a long time, that worked, because we could meet our asset allocation plan. But we are exposed to very different levels of risk in our individual retirement accounts. And having only one fund each in our Roths limits how we can apply monthly contributions.
So if it were you, would you make sure you each held some TSM, TISM, REITS and bonds in your own accounts? Or would you vote for simplicity and consider it a family portfolio?
Thanks, Sarah
Since I'm redo-ing all of it, I consider it a family portfolio and am trying to minimize the number of funds held across the two accounts. As it grows and we rebalance, we might find ourselves holding the same fund across accounts again. As long as we are getting the cheapest expense ratios possible, I'm find with having the same fund in more than one account.
Two facts, as food for thought:
- Only 202 of the 500 biggest companies in the United States in 1980 were still in existence 20 years later.
- On December 29, 1989, Tokyo's Nikkei stock average reached its all-time peak of 38,915.87. Twenty years later, the Nikkei has never again reached that level — and, in 2009, reached a new low of 7,054.98.
I've been following your blog for a long time, and it's great to see your net worth go up. It would be much more relevant if we knew your starting point.
How much do you guys earn?
How much do you save as a percent of your salary?
How did you get the funds to buy your 4 plex?
Etc..
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