I have no idea why these specific holdings were selected. Our main discussion has been that I want the portfolio to earn 6-7% per year with the goal being to double in value every 10- 12 years. At one point in time, more dividend stocks were specifically purchased so that the account would generate more income. The discussion was that if at age 48 (when I stop receiving money from Social Security Survivor Benefits), I didn't want to work a full-time and part-time job I could have roughly 40K coming in from dividends. I don't think I will need quite that much. The thought was if I could leave it in to continue to grow, great, If you need to start withdrawals, there will be enough of a nest egg there for that to be possible on dividends alone.thanks for posting. I know that was a lot of work. I still don't know what percentages in each are owned, but it is what i expected. this is known by Don MacDonald as a hodgepodge portfolio the advisor has you in. It has ETFs, mutual funds, individual stocks, fixed income, high yield, growth and income funds, dividend stock funds, etc. In short, would you have picked these holdings yourself? If not, do you know why these holdings were selected?Individual Brokerage Account: 589K (originally funded with the 500K life insurance policy in 2021- no money has been added) It is allocated for 75% stocks, 15% bonds, 10% cash (I think this fluctuates based on when dividends are paid)
QIDPQINSURED BANK DEPOSIT PROGRAM
ABBVABBVIE INC COM USD0.01
AES AES CORP COM USD0.01
ARCCARES CAPITAL CORP COM
CADUXCION ARES DIVERSIFIED CREDIT I
CVX CHEVRON CORP NEW COM
DUK DUKE ENERGY CORP NEW COM NEW ISIN #US26441C2044 SEDOL #B7JZSK0
DVN DEVON ENERGY CORP NEW
FAGIXFIDELITY CAPITAL & INCOME
FAYZXFIDELITY ADVISOR MULTI-ASSET INCOME I
FCRIXFS CREDIT INCOME FUND CL I
FLBL FRANKLIN TEMPLETON ETF TR SENIOR LOAN ETF
FNDXSCHWAB FUNDAMENTAL US LARGE COMPANY INDEX ETF
FRFZXPGIM FLOATING RATE INCOME CL Z
FZFXXFIDELITY TREASURY MONEY MARKET FUND
HTGCHERCULES CAPITAL INC
IHDG WISDOMTREE TR INTL HEDGED QUALITY DIVID GROWTH FD
KO COCA-COLA CO
MOATVANECK ETF TRUST MRNGSTR WDE MOAT
MRK MERCK &CO. INC COM
PFE PFIZER INC
PHYZXPGIM HIGH YIELD CL Z
PM PHILIP MORRIS INTERNATIONAL INC COM NPV
PONPXPIMCO INCOME CL I2
PPL PPL CORP COM USD0.01
QDPLPACER FDS TR METAURUS US LRG CAP DIV MUTIPLER 400 ETF
QQQ INVESCO QQQ TR UNIT SER 1
SCHDSCHWAB US DIVIDEND EQUITY ETF
SPY SPDR S&P500 ETF TRUST TRUST UNIT DEPOSITARY RECEIPT
T AT&T INC COM USD1
TFC TRUIST FINL CORP COM
VZ VERIZON COMMUNICATIONS INC
3. What am I missing big or small picture?
for instance, do you know what HTGC HERCULES CAPITAL INC is? Had to look that one up. And VANECK ETF TRUST MRNGSTR WDE MOAT too. Anyway, he has you in the S&P500 but also SCHWAB FUNDAMENTAL US LARGE COMPANY INDEX ETF. Aren't they basically the same? In fact, looking the two up, SPY outperformed FNDX and had a higher sharpe ratio, so why hold FNDX?
There's a number of individual stocks but do you really want to own:
Verizon
AT&T
Truist
PPL
Philip Morris
Pfizer
Merck
Coca Cola
Devon
Duke
Astrazeneca
Aes
Ares Capital
Chevron
Why?
And these companies are already contained in the total market, so if you just own the total stock market you own them all in the proportions that are owned in the market. The only reason to own these individually is if these particular stocks will outperform the market. Will they? Can you know that now? No.
Not sure why the advisor would want you to hold income funds, dividend funds, high yield (junk bond) funds in taxable. That's not tax efficient. You'd hold more fixed income in retirement accounts and hold equities in taxable, but in a more diversified way. Diversification isn't based on the number of holdings you have individually. It's based on the number in totality. The global market contains around 12,000 stocks. VTWAX (or VT if you prefer) contains almost 10,000 companies.
If the advisor didn't explain his rationale for why he has this hodgepodge portfolio, you don't have a financial plan. You have a bunch of holdings. And it is a complicated portfolio, which makes you likelier to stay with him because the thought of unwinding this mess can have one just grin an bear it.
What do you think?
I definitely need to discuss the tax efficiency that you point out. Do you have any reading recommendations for wrapping my head around that concept? Tax efficiency is what I don't understand and something I want to have a better grasp of before I try to manage things myself.
Statistics: Posted by Makeitmakesense — Tue Aug 06, 2024 2:34 pm — Replies 35 — Views 3113