Help me with my retirement funds

[Deleted]

In the interest of diversification, I have stayed invested in some funds for probably too long.  They have been complete dogs for many years, but I feel like the minute I them things will change and I'll regret it.  Just looking for some input on whether or not I keep them and if not, what I should switch to?  I want to keep things as simple as possible.

Background, I have about 450K in retirement accounts.  Of that, half (225K) is S&P 500 Index and 127K is in FLPSX (this fund has been very good to me over the years).  Then I have another 34K in a large company growth fund (SBLYX), no complaints with that one.

Now the dogs!

15K FIGRX - Fidelity International Discovery.  I've had this FOREVER and it always seems like it's worth about the same.

11K - VEMAX - Vanguard Emerging Markets Index.  Bought 5 years ago for 10K.

36K - Vanguard Total Bond Market Index.  I've lost money on this the last 10 years or however long I've held it. 

So, any advice on what to do with these?  Keep?  Sell? 

[justme]

This is what I have personally (based on holdings not contribution rates)

About 64% in Vanguard Target funds. A small chunk in 2050 but the vast majority is in 2055, and I have some in 60 and 65. (I tend to move my contributions over as the new ones come out, but leave what I have)

VSGIX - Small cap growth and is about 12%

VINIX - Large blend 12% (though this fund has pretty much followed the S&P 500, but no access in my current 401k to that)

VTSNX - Total International Stock 8%

TPLGX - Large cap growth ~2% (actually has been beating the S&P500 for the last 5 years, maybe I should be putting more in here!)

VMVAX - Mid-cap value 1.75%

VMGMX - Mid cap growth 0.3%

The target funds have some bond and cash holdings so I don't do any outside of the funds. That mix works out to:

61%  domestic stock
30% foreign stock (wondering if I need to adjust my contributions to decrease this amount)
6% bonds
3% other/short term/cash



So I think the International stock I have is doing better than yours. Bonds have sucked for a long time - I'm not sure you can find one that's going to do any better. That's mostly why I only have it because that's what the Target Funds do. Not sure about the emerging market funds - I don't have access to one so I haven't looked at it, I just split it between small/mid/large because I don't have access to a S&P500 or Total Stock Market fund. 

[Deleted]

I'm tempted to go 100% S&P 500 with the exception of the FLPSX. 

Probably stupid thing to do at age 50 though.

[myrrh]

Apr 4, 2019 10:58:51 GMT -5 minnesotapaintlady said:

I'm tempted to go 100% S&P 500 with the exception of the FLPSX. 

Probably stupid thing to do at age 50 though.

So you have about 86% domestic, 6% international, and 8% bonds. I think if you have less than 10% of something it's not going to affect your results much at all, so if you don't like international feel free to . Plus the FIGRX has a somewhat high expense ratio, so I'd definitely that. Do you have Vanguard Total International available? Anyway, whether you exchange it for more international or domestic is your call. John Bogle would have agreed with you as he did not like international. Lots of other people (including me) like the idea of international stocks, because the US isn't the entire economy. Plus it makes rebalancing a little more interesting.



Moving to 100% S&P 500 wouldn't be the worst choice in the world, but it does have risk - you have to remember it could drop 50% the exact time you plan to retire. Bonds aren't there for growth, they are for stability. I'd increase bonds a little because I view bonds as taking money off the table that I don't need to risk as I get older - maybe during rebalancing you increase your bond holdings a few percentage points a year?
I've been doing that for the past five years and I'm finally to 15% bonds. 

[justme]

If you've been losing money in the Bond fund since you put money into it, you could move it to a money market account if available. Not crazy rates, but I think they're up around 2% now. 

[Deleted]

Apr 4, 2019 16:11:38 GMT -5 myrrh said:

Apr 4, 2019 10:58:51 GMT -5 minnesotapaintlady said:

I'm tempted to go 100% S&P 500 with the exception of the FLPSX. 

Probably stupid thing to do at age 50 though.

So you have about 86% domestic, 6% international, and 8% bonds. I think if you have less than 10% of something it's not going to affect your results much at all, so if you don't like international feel free to . Plus the FIGRX has a somewhat high expense ratio, so I'd definitely that. Do you have Vanguard Total International available? Anyway, whether you exchange it for more international or domestic is your call. John Bogle would have agreed with you as he did not like international. Lots of other people (including me) like the idea of international stocks, because the US isn't the entire economy. Plus it makes rebalancing a little more interesting.



Moving to 100% S&P 500 wouldn't be the worst choice in the world, but it does have risk - you have to remember it could drop 50% the exact time you plan to retire. Bonds aren't there for growth, they are for stability. I'd increase bonds a little because I view bonds as taking money off the table that I don't need to risk as I get older - maybe during rebalancing you increase your bond holdings a few percentage points a year?
I've been doing that for the past five years and I'm finally to 15% bonds. 

Actually FLPSX is almost 40% international stocks, so that's another 50K or so there in International.  


I wouldn't mind the bonds so much if they were increasing at even a minimal rate, but I did redo the math today and I was ignoring dividends and just going on the NAV of the fund which is down $200 in the 10 years.  Adding dividends I'm up a few thousand, which is still pretty blah for 10 years, but not as horrible as I thought.  

I think I will for sure the FIGRX.  I'd have to trade for another Fidelity fund because it's in an IRA there, but I'm sure they probably have an International Index that is better than this.  I've had it so long.  I'll bet 20 years or more.     Meanwhile the FLPSX went from 22K to 127K in less time than that.  

[Deleted]

Apr 4, 2019 10:51:03 GMT -5 justme said:

This is what I have personally (based on holdings not contribution rates)

About 64% in Vanguard Target funds. A small chunk in 2050 but the vast majority is in 2055, and I have some in 60 and 65. (I tend to move my contributions over as the new ones come out, but leave what I have)

Are you really that far from retirement or are you choosing a higher date so it's more aggressive?  I've decided to go with one of the Fidelity Freedom Funds for the FIGRX money.  I'm normally not a big Target date fund fan because the fees are so high on some of them, but the one I was looking at was only 0.14%  I can live with that.  I was thinking 2035.  I'll be 66 then and the rest of my portfolio is pretty aggressive already.

[Deleted]

I set mine at 110-age in stock and the rest bonds, ignore the noise and call it a day.  accounts as follows:

Taxable
VTWAX Vanguard Total World Stock
VWIUX Vanguard Intermediate Term Tax exempt

Tax Advantaged
VTWAX Vanguard Total World Stock
VBTLX Vanguard Total Bond Market

The Vanguard Total Bond Market doesn't look as bad when you take into account total return, I don't auto-reinvest so I am forced each month to look at my asset allocation and manually invest the interest from it.

[Deleted]

Apr 5, 2019 8:32:44 GMT -5 @aj said:

I set mine at 110-age in stock and the rest bonds, ignore the noise and call it a day.  accounts as follows:

That would be 40% bonds for me.  Ugh.  I know the rules of thumb and conventional wisdom, but I do hate those bonds!  LOL

[Deleted]

Apr 5, 2019 8:36:23 GMT -5 minnesotapaintlady said:

Apr 5, 2019 8:32:44 GMT -5 @aj said:

I set mine at 110-age in stock and the rest bonds, ignore the noise and call it a day.  accounts as follows:

That would be 40% bonds for me.  Ugh.  I know the rules of thumb and conventional wisdom, but I do hate those bonds!  LOL

Definitely stinks during times when you see the stock market soaring and the bonds languishing.

I looked at it like this, where could I set my asset allocation so I am comfortable with it and not tempted to tinker with it....

At first I was 120-age in stock but I still had a bad feeling, I moved it to 110-age several years ago and am comfortable with it. I think it is different for everyone and you just have to find your comfort spot, you just don't want to tinker with it all the time.

[justme]

Apr 5, 2019 8:22:41 GMT -5 minnesotapaintlady said:

Apr 4, 2019 10:51:03 GMT -5 justme said:

This is what I have personally (based on holdings not contribution rates)

About 64% in Vanguard Target funds. A small chunk in 2050 but the vast majority is in 2055, and I have some in 60 and 65. (I tend to move my contributions over as the new ones come out, but leave what I have)

Are you really that far from retirement or are you choosing a higher date so it's more aggressive?  I've decided to go with one of the Fidelity Freedom Funds for the FIGRX money.  I'm normally not a big Target date fund fan because the fees are so high on some of them, but the one I was looking at was only 0.14%  I can live with that.  I was thinking 2035.  I'll be 66 then and the rest of my portfolio is pretty aggressive already.

It's a combo of both. I'm only 33 so I'm a ways off. Vanguard has me on the cusp of 2045/2050. If you go by retiring at 65 or SS's FRA then that brings in 2055 as the one to use. But when you're 20 years out, their target funds are already 23% bonds and 10 years out is 38% bonds. At the moment that just feels way conservative to me so I've been putting it in the later ones to mitigate the large percentage of bonds automatically. That way, if I don't immediately move money around when I retire I won't be in a really stupid (I think) position). The 2015 fund is 60% bonds! That seems crazy conservative to me when you still have decades to live. Though I honestly haven't thought about retirement much beyond this staggered target fund "plan".

The Vanguard Target Dates are only 0.15% fees and they have most of their holdings in the Total Stock Market fund which for some reason my 401k doesn't include as an option independently. 

[Deleted]

My 401K is with Prudential and the options are bad.  I put  nearly all of my contributions into an S&P 500 index fund for that.   My IRAs are the only place I can diversify, but I'll probably never add to this Target fund...at least not much.  I try to go Roth for 100% of my IRA and this is Traditional.  It's just 15K that is going to sit there forever, but I'd rather it grew some! 

My Roth and another Traditional account are at Vanguard and that's where I do most of my investing.  I haven't added to my Traditional or Rollover at Fidelity in 17 years. 

[Value Buy]

Not sure about putting everything in an S&P 500 fund right now. That would be too much in one basket for me even at your age.
As far as the bond fund, I would leave it in place right now. You are young and have time on your side.
I really never liked international funds for the most part, because even if you pick a strong winner, your gains are subject to the value of the dollar.

Some funds, unless specifically stating they only invest in American companies have some international exposure anyway.

[Value Buy]

I did not check any of your funds, but our IRA accounts also have bond components attached to fund makeup, so I do have some bond exposure.
My father had a specific bond fund he was in, and the monthly dividend checks were always a fair amount for him and my mother to use to travel, etc. The nav did fluctuate, but he was not worried about selling at a market high or because the nav dropped as long as those monthly checks showed up. 

[Deleted]

Yeah.  I'm keeping the bonds.  Might even add some.  They don't make me quite as sick now that I've figured out total return. I dumped FIGRX this morning though and bought a target fund that is 11% bonds. 

Not so funny story.  I used to have a lot more bonds (like 30K or so) and "accidentally" sold them and bought stocks at the all time high price last September..  I had changed my 401K contributions to 100% S&P 500 and didn't realize the auto-rebalance was on.  A couple months later it sold off all my bonds to rebalance.     Lesson learned.  That feature turned OFF.

[Deleted]

I wish 401k’s went away and we could bring our IRA’s to our employer and get a direct deposit like a paycheck into our bank account.

I know your pain with the S&P 500 being the only good option in an employers 401k. Up until a couple years ago I had to balance it with my IRA to get to my desired asset allocation. I complained for a couple years and they finally added a Vanguard TIPS bond fund and a Vanguard Developed Markets International stock fund, not quite what I wanted but close enough to stop complaining.

I did find it funny the 401k provider asked me why I cared about the individual fund choices when over 90% of our employees never changed their initial .4% expense ratio target date funds that included a mish mash of 12 different mutual funds.

[Deleted]

Nobody cares about the fund choices here either.  I complain and they look at me like I have 2 heads.  I'm pretty sure most of the people working here don't get the twisted gut feeling I get when looking at the 1.78% expense ratios. 

[tallguy]

Apr 5, 2019 8:36:23 GMT -5 minnesotapaintlady said:

Apr 5, 2019 8:32:44 GMT -5 @aj said:

I set mine at 110-age in stock and the rest bonds, ignore the noise and call it a day.  accounts as follows:

That would be 40% bonds for me.  Ugh.  I know the rules of thumb and conventional wisdom, but I do hate those bonds!  LOL

That is why I set mine at age-minus-age in bonds and the rest in stocks.  When I rolled over my 401k into an IRA I tried for a couple of months to talk myself into some bond fund investing.  Couldn't do it, and all I managed to do was cost myself some returns by not going immediately into equities.