Changes to My Investments

Changes to My Investments

A few months ago I revealed what investments were in my retirement accounts. Those investments consisted of the Fidelity Contrafund, Vanguard Midcap Index Fund, Vanguard Small Cap Index Fund, Fidelity Balance Fund, Fidelity Growth Fund, Fidelity Spartan Index, and Dodge and Cox International Fund. The first four funds are choices in my 401k plan, the next two funds are in my 403b fund, and the final one is in my Roth IRA.

I recently decided to simplify my investments even further. I have mentioned here how I am convinced that index funds, at least for me, are the right way to go and I am slowly moving toward all of my investments to be housed in index funds.

Moreover, I am also quite comfortable with risk. I know that there will be ups and downs in the market. I have written about them here, here, and here. In my balance fund I have some bonds, not much, but it makes up about 5% of my portfolio. I have decided to go to 100% stocks. Now that is probably not the best thing to do, but I feel like I am already a decade behind and I need to increase my returns. So although I am already pretty aggressive I am going to get even more aggressive.

I don’t necessarily recommend that you have no bonds in your portfolio, but like I said I am comfortable with risk. I am comfortable with the ups and downs of the market. I believe that ten years from now my portfolio were to be bigger. And if I do ever decide to add bonds I would add a bond fund and not necessarily a balanced fund.

In the future I will add bonds to my portfolio to smooth the ride, but that probably won’t be for about 10 years or so. I could change, but as of right now I am comfortable with what I have.

The Changes I Made

I made two changes. First, I sold my Dodge and Cox International Fund and I replaced it with the Fidelity Spartan International Index Fund (FSIVX). Originally, I wanted to buy a Vanguard International Index Fund, but it would’ve actually cost me money to buy the fund. So I saved the money and just transferred the funds to a Fidelity fund that was similar in nature in terms of everything.

I sold the Dodge and Cox International Fund for two reasons. First, the fees were actually much more than the index fund. Second, the investing performance of the index fund was actually as strong as Dodge and Cox, if not stronger. Finally (I guess three reasons), the dividend yield on the index fund was higher. All three reasons made it clear for me to switch.

The second change I made was that I sold my Fidelity Balanced funds and I had the funds distributed to my Fidelity Contrafund. This eliminates the bonds in my portfolio, but as I mentioned I am comfortable with this move.

My Funds Now Are:

Fidelity Contrafund

Vanguard Midcap Index Fund

Vanguard Small-cap Index Fund

Fidelity Growth Fund

Fidelity Spartan Index Fund

Fidelity Spartan International Index Fund.

Ultimately, these moves bring me closer to having only index funds in my portfolio.

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