How I invested my money in 2016

First, a bit of (short) investing history.

I invested $1,000 into a Roth IRA during my third year of residency (2015). This account is at Vanguard and I initially invested all of it in their 2045 Target Retirement Fund. I had no idea how to invest my money but I knew that Vanguard was a good place to start.

My first (and current) attending job (started September 2015) gave me access to a 403(b) and a 457(b) plan. They have a limited fund list, but have some low cost Vanguard funds. Again, I still had no idea how to invest, but luckily, they automatically selected a Vanguard Target Fund based on your age. I managed to contribute close to $16K for 2015. I did not really understand what a 457(b) was and read some “bad” things about it, so I decided to figure that out later.

In 2016 I maxed contributions to the 403(b) ($18,000) and started receiving a generous employer match (about $16.5K in 2016). Takes time to fully vest but I am currently 20% vested. I almost maxed out the 457(b) plan as well – about 16.5K (more in an upcoming post about how and why I ultimately decided to use this).  I also funded both my 2015 and 2016 Roth IRA via the backdoor, although I fell a little short for my 2015 contribution at $4,000.

I read more about index funds and how to create an asset allocation. After tinkering with things a few times, I finally “set it and forget it:”

• 55% US stocks:
  • VIIIX: Vanguard Institutional Index Fund Institutional Plus Shares 0.02%
  • VIEIX: Vanguard Extended Market Index Fund Institutional Shares 0.12%
• 20% International stocks:
  • VFWSX: Vanguard FTSE All-World ex-US Index Fund Institutional Shares 0.11%
• 10% Small cap value:
  • VISVX: Vanguard Small-Cap Value Index Fund 0.2%
• 8% REITs:
  • VGSIX: Vanguard REIT Index Fund Investor Shares 0.26%
• 7% Bonds:
  • VBMPX:  Vanguard Total Bond Market Index Fund Institutional Plus Shares 0.05%

I hold the small cap value and REIT fund in the Roth IRA. The rest are in the 403(b) and 457(b). I have yet to open a regular old taxable account.

How did I do? Well, turns out it's not that easy to really know:

This is a screenshot from Personal Capital. I use this to get a nice “overview” of my investments and it has some nice graphics and tools to play around with. On the upper left you'll see the “You Index.” This is NOT the actual portfolio performance though, it's the performance if you had held your funds from the starting point of the graph. It's still useful as a rough guide though. You'll also notice that the S&P 500 finished at 9.54%, but this doesn't take into account dividends re-invested. The S&P 500 finished at 11.96% with dividends re-invested.

This is a screenshot from my 403(b) plan. 17.59% ! But I checked this on 1/9/16, so it's not exactly all of 2016 but close enough. My 457(b) returned 8.4%. My Vanguard account's return was 11.8%. My best guess is that overall, based on portfolio % (the bulk of my money is in my 403b), I clicked in around 14%. But the range is probably 13-15%. Not bad for a very new investor.

My allocation will likely change in 2017 (planning on getting rid of the bonds, for example) and I'm going to switch to ETFs in the Vanguard account.