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hegemony

Hegemony's private parts (taxable account edition)

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Our taxable account portfolio is relatively streamlined compared to our retirement accounts. (see https://creditboards.com/forums/index.php?showuser=767)

 

I am including cash accounts (high yield savings like Alliant & CDs) which gives a result that shocked me a bit. I didn't realize how heavily weighted in subprime cash we are in our taxable accounts. I'm excluding non-liquid assets such as real estate from this list and percentages. In the near future I'll start a thread with our overall percentages including retirement, taxable, real estate, and other investments.

 

The investment is followed by the percentage of our taxable account portfolio; an asterisk denotes we are adding new money monthly to this investment. Note that due to rounding the percentages may not sum to 100%.

 

investment

Subprime Cash 58.7%

VFIAX* 10.2%

VTMSX* 4.9%

FPMAX* 4.5%

MINDX* 4.5%

FPMAX* 4.5%

FSEVX* 3.2%

FSEMX* 3.2%

AAPL 2.4%

VWLTX* 2.2%

MCHDX 1.3%

other individual stocks <1.0%

 

Regarding our cash holdings, the weighted mean APY is 1.2%

Edited by hegemony

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Not sure where you're investing at, but unless your contribution is large enough, transactions of dollar average on a monthly basis can sum up to quite a bit. Have you looked into Motif Investing? I do a monthly contribution for everything in my portfolio at $4.95/m.

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stocks are via Fidelity; I rarely trade if my gains are short term as taxes are not fun right now. The mutual funds are direct from Vanguard, Fidelity, and Matthews.

 

I do plan to get cash to under 40% this year, probably into VFIAX

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You said those with asterisks are contributed monthly; are you paying online commissions of those contributions or are you just trading Fidelity funds at Fidelity, Vanguard at Vanguard?

 

I break my taxable investments to:

 

5% P2P lending notes.

15% Traditional savings/CD

70% Investment in equities, mostly ETFs following Harry Browne's philosophy (https://en.wikipedia.org/wiki/Fail-Safe_Investing). Dollar average monthly; rebalance semi-annually.

10% Derivatives market, primarily seeking alpha via options, with little to no concerns on tax complications

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You said those with asterisks are contributed monthly; are you paying online commissions of those contributions or are you just trading Fidelity funds at Fidelity, Vanguard at Vanguard?

 

I break my taxable investments to:

 

5% P2P lending notes.

15% Traditional savings/CD

70% Investment in equities, mostly ETFs following Harry Browne's philosophy (https://en.wikipedia.org/wiki/Fail-Safe_Investing). Dollar average monthly; rebalance semi-annually.

10% Derivatives market, primarily seeking alpha via options, with little to no concerns on tax complications

no commissions buying MFs.

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Our taxable account portfolio is relatively streamlined compared to our retirement accounts. (see https://creditboards.com/forums/index.php?showuser=767)

 

 

<snip>

 

 

Heg - was that supposed to be a link to a thread? It's your user profile. Curious to see what you're doing with your retirement accounts

 

p.s. love the Rasputin and Little D pic

Edited by JeffeVerde

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I figured this can go here (mostly because I'm looking for your input, Hege), but can become it's own thread if necessary.

 

 

I've finally hit enough liquidity that I'd like to start taking steps into a bit more risk than the typical online savings account where everything is now. I'm looking into starting with 5-10k into a new Vanguard account that is separate from my roll-over 401k and IRA accounts.

 

Initial thought is to choose a mutual fund with low to moderate risk. I shouldn't need to pull out funds anytime soon but would like to do so, quickly, if needed. This is a departure for me as most of my savings are tired up in IRAs and 401k funds.

 

 

Perhaps the Vanguard Total Bond Market Index fund fits the bill to start? I can always diversify in the future and move these to the admiral class funds once it grows to that point. Or perhaps this one doesn't make sense with the impending increase in interest rates?

VBMFX

 

 

Thoughts or advice?

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I would not put new money into bonds given the direction interests are going the next few years.

 

Other funds are at highs so there is risk to new money although there is also risk of FOMO.

 

Vanguard's S&P 500 index fund is a good option IMHO.

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I would not put new money into bonds given the direction interests are going the next few years.

 

Other funds are at highs so there is risk to new money although there is also risk of FOMO.

 

Vanguard's S&P 500 index fund is a good option IMHO.

 

Thanks, Hege. I think you're spot on with the interest rates and that's why this is even more cloudy for me to decide.

 

I have quite a bit of the 'untouchable' funds tied up into their index funds (both investment class as well as admiral). That might make a bit more sense even if it's potentially more volatile.

 

 

I just have to get over:

risk4_300.jpg

Edited by Big Bear

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since this is a taxable account, you might want to look at VTMSX

 

I was looking at that, and will dig into it deeper. I think it's okay on the tax front considering I'm talking very low five-figure (if not four-figure) balances. Edit: Scratch that...I had another fund open that I thought this was the same. I'll take a better look at this one, even though it's an admiral share fund.

 

Also looking at VBINX for that watered down risk factor over VFINX.

Edited by Big Bear

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FYI, decided to open with VFINX. Figure a bit more risk is acceptable for what should be funds that I can all but forget about (without actually forgetting about them).

 

Might ultimately supplement with VBINX, but honestly it might make more sense to grow and move to admiral shares like I have in my other accounts. Always fun to buy when things have grown so strongly for months on end though...hopefully that continues.

 

 

Thanks for allowing me to hijack, Hege, and again for sharing your experiences.

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I think a lot of it depends on your timeline Big Bear. It sounds like this is money that you haven't 100% committed to retirement or necessarily to long term growth, but that you would like to have on the back burner towards that purpose should that become preferred. If that's the case you may want to keep an eye on the tax effects as the account grows and be prepared to shift it to other funds as that makes sense.

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I think a lot of it depends on your timeline Big Bear. It sounds like this is money that you haven't 100% committed to retirement or necessarily to long term growth, but that you would like to have on the back burner towards that purpose should that become preferred. If that's the case you may want to keep an eye on the tax effects as the account grows and be prepared to shift it to other funds as that makes sense.

 

You're completely correct. These funds are not 100% committed to retirement but I also shouldn't need to touch them for any reason anytime soon. Time samples here should be in at least quarterly, if not more than annually time steps.

 

That's certainly unfamiliar territory I'm stepping into and will tread lightly. I assume, which could be an ill advised move on my part, that given the smaller amount of funds I'm playing with today I should be alright in the more traditional fund approach. As I start to accumulate, which won't be all that rapid as most of my disposable income is being used as a fire blanket to snuff out my remaining student loans, I'll reassess and move things accordingly (and of course ask more questions here). I'm much more comfortable and knowledgeable in the land of 401k and IRAs and this is a bit of a departure from that for several reasons.

Edited by Big Bear

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Hege, what do you think?

 

  • My wife and I are each currently maxing out our Roth IRAs into the Retirement 2035 Fund with Vanguard.
  • We are also each contributing $500/mo for our 403(b)'s into the Total Stock Market Index Fund with Vanguard.

Hopefully in 2018 or 2019, we will up the $500/mo to $1500/mo.

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Hege, what do you think?

 

  • My wife and I are each currently maxing out our Roth IRAs into the Retirement 2035 Fund with Vanguard.
  • We are also each contributing $500/mo for our 403(b)'s into the Total Stock Market Index Fund with Vanguard.

Hopefully in 2018 or 2019, we will up the $500/mo to $1500/mo.

 

do you plan to work until at least 59.5 years of age? If so, then IMHO maxing pretax vehciles such as the 403bs is a priority. Do you have a ROTH 403b option?

 

On those specific investments, I am not a fan of target date funds as they tend to be very conservative and hold a lot more in bond funds than I am comfortable with. The TSM index is fine, but even more vanilla than S&P500 index. :)

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I think a lot of it depends on your timeline Big Bear. It sounds like this is money that you haven't 100% committed to retirement or necessarily to long term growth, but that you would like to have on the back burner towards that purpose should that become preferred. If that's the case you may want to keep an eye on the tax effects as the account grows and be prepared to shift it to other funds as that makes sense.

 

also regarding timeline, if you plan to retire (or switch careers to something more fulfilling like I'm planning on) before the age of 59.5 then it is essential to make sure you have enough money invested outside of retirement vehicles.

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Hege, what do you think?

 

  • My wife and I are each currently maxing out our Roth IRAs into the Retirement 2035 Fund with Vanguard.
  • We are also each contributing $500/mo for our 403(b)'s into the Total Stock Market Index Fund with Vanguard.

Hopefully in 2018 or 2019, we will up the $500/mo to $1500/mo.

 

do you plan to work until at least 59.5 years of age? If so, then IMHO maxing pretax vehciles such as the 403bs is a priority. Do you have a ROTH 403b option?

 

On those specific investments, I am not a fan of target date funds as they tend to be very conservative and hold a lot more in bond funds than I am comfortable with. The TSM index is fine, but even more vanilla than S&P500 index. :)

 

 

I will receive full pension benefits from TRS at 54.

 

In the next year or so, we will be able to up the 403(B) savings to $1500/mo each.

 

I do believe that a Roth 403(B) is an option. However, we are looking to lower our current tax liabilities more than anything else, right now.

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Hege, what do you think?

 

  • My wife and I are each currently maxing out our Roth IRAs into the Retirement 2035 Fund with Vanguard.
  • We are also each contributing $500/mo for our 403(b)'s into the Total Stock Market Index Fund with Vanguard.

Hopefully in 2018 or 2019, we will up the $500/mo to $1500/mo.

 

do you plan to work until at least 59.5 years of age? If so, then IMHO maxing pretax vehciles such as the 403bs is a priority. Do you have a ROTH 403b option?

 

On those specific investments, I am not a fan of target date funds as they tend to be very conservative and hold a lot more in bond funds than I am comfortable with. The TSM index is fine, but even more vanilla than S&P500 index. :)

 

 

I will receive full pension benefits from TRS at 54.

 

In the next year or so, we will be able to up the 403( B) savings to $1500/mo each.

 

I do believe that a Roth 403( B) is an option. However, we are looking to lower our current tax liabilities more than anything else, right now.

 

check the roth 403b options as some require you to vest for 5 years before you can withdraw your contributions without penalty... so starting it even with $25 a month can start the vesting clock.

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Hege, what do you think?

 

  • My wife and I are each currently maxing out our Roth IRAs into the Retirement 2035 Fund with Vanguard.
  • We are also each contributing $500/mo for our 403(b)'s into the Total Stock Market Index Fund with Vanguard.

Hopefully in 2018 or 2019, we will up the $500/mo to $1500/mo.

 

do you plan to work until at least 59.5 years of age? If so, then IMHO maxing pretax vehciles such as the 403bs is a priority. Do you have a ROTH 403b option?

 

On those specific investments, I am not a fan of target date funds as they tend to be very conservative and hold a lot more in bond funds than I am comfortable with. The TSM index is fine, but even more vanilla than S&P500 index. :)

 

 

I will receive full pension benefits from TRS at 54.

 

In the next year or so, we will be able to up the 403( B) savings to $1500/mo each.

 

I do believe that a Roth 403( B) is an option. However, we are looking to lower our current tax liabilities more than anything else, right now.

 

check the roth 403b options as some require you to vest for 5 years before you can withdraw your contributions without penalty... so starting it even with $25 a month can start the vesting clock.

 

 

Great advice! Thank you!

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