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**New to investing. Need help with asset allocation/location

Bogleheads • View forum - Investing - Help with Personal Investments - www.bogleheads.org
Hello all,

I was hoping I could get your input on my asset allocation/location. I am new to all of this so apologies in advance if my verbiage sounds off. I have recently started putting money away and am now deciding how to invest it and would really appreciate any help. I have broken down the total amount I have saved below.

Quick background. I am relatively young (35 years old) with plans to retire in 30years. I am a high income earner in the highest income tax bracket with $7800 employer contribution in my 401k with plans to contribute my $18k before the year end. In our own account, I have done a "backdoor Roth conversion" for myself and my wife (total of $11k) and have an additional $7500 in a brokerage. I figured I'm mainly going to focus on ETF's given their tax efficiency. I want to start off with an aggressive portfolio and adjust as I get older. I welcome any comments to help me fine tune my plan. Thanks

In summary: total currently saved ($26k). With the $18k I will soon add to my 401k, I will be at $44k.

Asset allocation:

95% equites

a. 65% U.S.

i. 16.25% VTI (total market)

ii. 16.25% VYM (large value, high dividend)

iii. 16.25% VOT (mid growth)

iv. 16.25% VBR (small value)

b. 30% International

i. 20% VEA (developed)

ii. 10% VWO (emerging)

5% bonds

a. VTEB (municipal)

I feel like deciding on an asset allocation has not been as difficult as figuring out asset location. To simplify it for myself, I have tried to break it down into tax efficient and inefficient asset classes. My employer 401k plan does not have great funds in there but I have found a few worth considering. My biggest problem is not knowing which asset class is best put into the 401k.

My plan has NAESX which is a small blend Vanguard fund and two international funds that look appealing, Dodge and Cox International (which I believe is closed to new investors) and Pimco total return. Which should I consider in the 401k? Do international funds perform best in a taxable or tax-advantaged account? I know bonds are tax inefficient and are normally recommended in 401k/Roths but I will focus on municipal bonds and since they are slow growth and a smaller portion of my portfolio, I figured leaving them in a taxable account would be better to maximize the growth potential of other asset classes in the 401k. Anyways, I hope this does not sound too confusing. Would love to hear some input on both my allocation and what to emphasize in the 401k and Roth conversion accounts. Thanks

PK
Date: Oct 27, 2015   


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