As featured in The Wall Street Journal, Money Magazine, and more!
     

My Investment Holdings

This article was written by in Investing. 9 comments.


I was wondering how my investments were doing this year, so I whipped up a table. It appears my managed funds have generally outperformed my index fund. Some notes:

* My 401(k) was recently rebalanced (it’s automatic on a quarterly basis).
* The YTD Return is annualized based on either the most recent information or the end of the third quarter.
* I’m locked into my company stock until the next open trading window.
* The Sharebuilder account was created with the $50 Sharebuilder Bonus
* I’m open to comments.

Here’s the table:

Fund Type Value Exp.
Ratio
YTD
Return
Index
Company 401(k)
American Century Income & Growth [BIGRX] Large Cap Value $4,264.66 0.68 5.27 4.87
Jennison U.S. Emerging Growth Fund [PEGZX] Mid Cap Growth $2,558.79 0.95 16.02 4.87
Dryden International Equity Fund [PJIZX] Intern’l Stock $4,264.64 1.77 9.02 8.49
Jennison Growth Fund ClZ [PJFZX] Large Cap Growth $3,411.72 0.81 14.00 4.87
Jennison Equity Opportunity Fund ClZ [PJGZX] Mid Cap Blend $2,558.79 0.87 4.70 4.87
My Company Common Stock Fund Company Stock (Large Cap) $4,905.20 N/A 22.16 N/A
Roth IRA
TIAA-Cref Equity Index Fund [TCEIX] Large Cap Blend Index $9,444.72 0.26 5.82 4.87
Scottrade Brokerage
Investment Co of America [AIVSX] Large Cap Value $3,581.66 0.57 5.54 4.87
Sharebuilder Brokerage
iShares Telecomm Index ETF [IYZ] Communications $44.05 N/A -0.14 N/A

Updated February 18, 2014 and originally published December 28, 2005. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

Email Email Print Print
avatar
Points: ♦127,480
Rank: Platinum
About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 9 comments }

avatar jim

Emerging market funds have been great the last two years and the auto-rebalancing every quarter is a really nice feature of your 401(k).

The only thing I’d do different is, at 29, perhaps you put a higher percentage is small/mid cap or emerging mkt funds. Overall it seems like a high percentage of your retirement savings is in large cap funds. I’d also buy a ton of google. :)

avatar Luke Landes ♦127,480 (Platinum)

My company offers a small cap account, and I invested in it for a few months before I realized it was an annuity fund (even though it’s called a “Small Company Stock Account,” so I stopped investing in that fund. It has performed quite well, though. The little bit that was in that account was redistributed in the latest rebalancing. I’d like a small cap fund if the company offered something a little less costly and not an annuity.

avatar rabhison

Which index did you use to compare your funds? I was surprised to see that your index fund beat your index — if you used the S&P 500, maybe using a total market index (such as the DJ Wilshire 5000) would be more fair. Since small-caps have outperformed large-caps, the total market has outperformed the S&P 500.

Also, I’ve heard that TIAA-CREF has been trying to increase management fees (see for example this Morningstar article. I don’t know if your index fund is one of those targeted for an expense hike, but if it is and the hike is significant, you may want to consider transfering to a Vanguard or Fidelity IRA. (Incidentally, Vanguard charges an extra $10 a year for their index funds if the balance is below $10k, thus conceivably wiping out any cost advantage due to a lower expense ratio.)

Thanks for sharing your portfolio with us!

avatar FMF

Looks like your company has done well this year based on its stock price. Any tips for the rest of us? ;-)

avatar Luke Landes ♦127,480 (Platinum)

The 4.87% index APY refers to the S&P 500. The Russell 1000 Index, possibly a better comparison for TCEIX, as a YTD return of 6.12% as of 11/30, whereas TCEIX is 5.82% (as above). The Russell 3000 — the index that the fund tries to match — YTD as of today is 6.02%.

avatar Karthik

Flexo,

I used Morningstar’s portfolio X-ray tool to look at your allocation. Here’s what it reported (you probably knew this), rounded up, excluding company stock:

US stocks 78%
Foreign stocks 18%
Cash 3%
Bonds
LV 27 LC 25 LG 22
MV 6 MC 6 MG 9
SV 2 SC 2 SG 1

OK, so here are my two cents:

1. You most definitely are overexposed to large caps, to the exclusion of midcaps and smallcaps. Now, mids and smalls may underperform in the near future simply because they have overperformed recently, but when you create a stable asset allocation, you’re trying to get out of the guessing game. My understanding of your earlier comment is that your company does not offer a decent small cap fund (not even an index fund?) – not surprising for a 401k. Which is why I’d plough your Roth money into a small cap fund. I prefer an index fund, but that’s my bias, because when I advise friends on passively managed portfolios, I want it to be passively managed, not just by me.

2. Your exposure to foreign stocks seems a little skimpy. I don’t know what your country exposure is. Foreign stocks includes Europe and Emerging Market. My preference would be 15% to Europe, 10% to emerging markets.

3. Yes, yes, I’ve heard that at 29, you should be in an all-stock portfolio. I just don’t buy it. Ben Graham, the father of Intelligent Investing, argued that you should always have 25% of each stocks or bonds, for insurance. Yes, much has been made of how great stocks are compared to bonds, but that’s easy to claim at the end of one of the greatest bull markets in history. If you were an investor in the 20s, you could have made the same mistake, only to suffer a horrendous crash and decades of mediocre stock performance.

4. You’ve got a phenomenal amount of your money in company stock. When the opportunity presents itself, I’d suggest offloading some of that stock. Your financial future is already significantly tied to that company, since hard times could put your earnings power in question. You don’t need to be too much more tied to your company than you already are. Of course, make some judgements about the relative value of the company stock and your qualifications to make such a judgement (can you sell us on the basis of fundamentals why we should buy the stock, for example). But even if these criteria seem extremely positive, I’d prefer to trim my position if I were you.

Well, those were my lengthy two cents! Finally, great job being aggresive enough to save so much at 29, and to have the humility to ask for advice!

Cheers,
Karthik

avatar guyincognito

TCEIX is artificially holding down its expense ratio by subsidizing it until July 2006 – see the following article:
link

Also, my broker told me to stay away from TIAA-CREF, not sure why though.

Moreover, rabhison above had a point: Vanguard will charge you $10 a year and has minimums of 3,000 to 10,000 just to get into most of their funds.

If anyone has a way to get a low cost Roth IRA besides Vanguard or Fidelity or using a fund like TCEIX (which does not have a minimum investment as long as one pays automatically but with the disadvantage of high expense ratio) without paying expensive commissions or service charges please post a comment.

avatar klauss

Flexo,

I relaize you just opened an account at sharbuilder, but I just ran accros a company called tradeking http://www.tradeking.com. It is a small company, but its platform is nice. $4.95 limit orders, no minimums. Here is there fee schedule. What do you think. The only thing I worry about with Sharebuilder is that to transfer out securities it is $50 and I would almost rather dollar cost every quarter rather than month to reduce commisions (after the $50 bonus) and I don’t think they will let you do it in those increments.
https://www.tradeking.com/PublicView/services/Services/commissionsPUB.tmpl

avatar Luke Landes ♦127,480 (Platinum)

Thanks for all the great thoughts here. I’m overly exposed to Large Caps without enough exposure to Mid and Small. I’ll adjust that this year, as it has been something I’ve been thinking about.

Klauss, I opened up a Sharebuilder account to take advantage of a free $50 offer. I’m just letting it sit (there are no inactivity fees) and (hopefully) grow. I’ll let “compounding” do its job and I’ll worry about fees for selling when that’s an option. Hopefully, at that time, the fee for selling will not eliminate gains.

Previous post:

Next post: