I wonder if you guys could give some advice about this preliminary portfolio. I'm trying to draw one up for retirement.....it's still some time off......but I could use some more perspective and ideas on this. I would like to keep the number of funds down to a dozen or less, if I could:
VWINX - 40%
GLRBX - 20%
PONDX - 5%
DLTNX - 5%
FUSVX - 10%
PRBLX - 5%
FSCRX - 5%
GLFOX - 5%
FMIJX - 5%
What would you change? Funds? Percentages? Or both???
God bless
the Pudd
Comments
What percentage you plan to draw (and will SS kick in before or after you start, which could affect weightings), are you looking to leave an estate (which would argue for more equity, since that's invested for a longer lifetime), etc.?
So here are a few comments and observations on the edges:
- This is weighted about 50/50 - including 30% in equity funds, 40% in Wellesley (1/3 equity), 20% in Golden Rainbow (1/2 equity). Might be okay for a shorter time frame portfolio, but for 30+ years, a tad more equities might be in order, especially given the low yields in bonds now and likely for several years.
- It's somewhat light on foreign exposure (about 8% of portolio), though not exceedingly so (i.e. as a percentage of equity, it's about 1/6).
- The domestic funds are very diversified (except PRBLX), while the international holdings are highly concentrated (28 stocks in Lazard, 32 in FMI). Intentional or an artifact of the fund selection?
- Share classes. If you're buying through Fidelity (a reasonable guess, given two Fidelity funds), you might look at buying the TF institutional share classes. Especially for a retirement portfolio which you expect to be selling off (no fees). That saves you a lot in fees over the years.
Specifically: DBLTX ($5K min in an IRA), and if you've got over $250K in your portfolio (total), GLRIX ($50K min = 20% of $250K portfolio).
If you're not averse to having investments in multiple places, you could buy VWIAX directly from Vanguard ($50K min = 40% of a $125K portfolio). Scottrade appears to give you access (with $17 TF) to PIMIX with a $100 (not $100K) min.
Just some minor thoughts. All in all, a nice portfolio.
Thank you for your input. Will retire at 61. The company will pay me to leave. At 62, I will get pension and social security. All things paid: house, cars, college, etc. As far as an estate, what is left will go to an only child. We would like to leave him the house, for sure. After that, it's just gravy. As far as overseas, it is concentrated. Friday showed me that. I guess I should spread it out more.....maybe an index fund, but no more %-wise. Europe is a mess, and I don't see it getting better. I think soon it will be China again. I like home better.
As for right now, my 401k is with FIDO---also a brokerage account. The only fees I've paid were for Wellesley ($75.00). This portfolio is not all set up yet.....it's a build in progress.
As far as other houses, I really want to stay with FIDO. I like their website and understand it.
Risk tolerance is conservative. 3% would be fine. My wife works at the Post Office and will be working for about 4 years after I retire. She will get pension and SS, also, along with a 401k (Thrift Savings Plan - TSP).
So, all income I want to go to MM fund to be used to buy more shares or for spending as we see fit. This portfolio does not have to outlive me......a house is enough, I think, for now.
Also, I have WAVIX and PTIAX as two (2) that might go along also.
God bless
the Pudd
Derf
Also since you're such good shape, maybe go for a little more risk?
So ... if someone gave me this for myself, while keeping your goals partly in mind, I would (and this is not quite what you asked):
- sell GLRBX and put half and half in PONDX and DLTNX
- sell FUSVX and put all in PRBLX
- sell a slug (say a quarter to a third) of VWINX and put it in FSCRX, or some portion add to PRBLX if so much SC makes you nervous
- lv infra and foreign and all else as they are or become, and do not add to foreign.
GLRBX should stay. Why it has mid caps in there.....nothing else does. I would be missing that part of the market.....just saying.
I do like PONDX and DLTNX. Maybe cut overseas to add. I really like the S&P Index Fund. That has to stay for large cap diversity. I feel PRBLX is too narrow for all that cash. I do like cutting VWINX some for small caps. In the set up, could always add later as I get to be an old pfart. Thanks for making me think.
God bless
the Pudd
In retirement I am a big believer in serious simplifying and in true diversification. Nothing wrong with leaving as is. But if you backtest and compare 2/3/5/7/10y, and more, you may see that your diversification spirit has not really added much (if any) value.
I did not mention FLPSX, NICSX, or AKREX in lieu of GLBRX plus augmenting existing bond funds because I didn't want to add good MC choices; I think there is too much of that going-overboard 'add' spirit going around.
For example, I bet there is a lot of bond overlap w Vang, Pimco, DoubleL, and James.
PRBLX is not really narrow; again, look at what 40 or so good LC stocks has gotten you historically compared with 500.
You may have sleep@night and obsessing factors involved, of course; I do. But I am trying to boil my holdings down to DSEEX and PONDX, and some RE, with a little fooling around on the side in SC, MC, and foreign funds. Plus some foolish individual loser stocks.