Can anyone weigh in on the is portfolio / asset allocation strategy? Background - TC: 180, - 40 years to retirement, in 20's. - risk-seeking, - buy-and-hold strategy, - knowledgable enough to avoid basic mistakes (e.g. selling in a down-market, picking stocks vs. index funds). Portfolio ($200K) - 37.5% US stock market (VTI) - 37.5% US tech index fund (VGT) - 22% international stock market (VTIAX) - 3%% bonds (BND)
Youâre super duper overweighted in the tech sector.
Its ok, but overweight in VGT (assuming you have unvested FB RSU which gives you even more exposure -- are you ok with >50% of your portfolio tied to tech along with your job?) If you are targeting ~1/3 decrease VGT to ~15%. Remember VTI has tech exposure also. Why VTI and VTIAX when you can buy VT? Recommend change: 82% VT, 15% VGT, 3% BND, ? FB RSU
VT is pretty heavily weighted in international stocks.
Thanks for the advice. I'm less bullish on international stocks (have followed Jack Bogle's thoughts here), so I've chosen to avoid VT to better control my exposure. My plan is generally to sell FB RSU and allocate it to index funds. I think I'm comfortable with (a reasonable) overweighting in techâI've seen 10% long-term returns on VGT vs. 7% on VTI. I'm willing to stomach the volatility for 20+ years of holding for a higher long-run return.
You can probably retire in your early 50s with your current trajectory
22% international is also too much. VTI already has enough international exposure.
Super high risk portolfio weighted heavly in stocks. Increase Bonds percentage to stabilize it more, also include some oil and gold to shield from hard stock crash. You can also add 3-5% in bitcoin or ethereum. Also International stocks come with high fees so decrease that. So many things are wrong here đ©
Bonds are becoming a riskier asset while consistently performing worse than stocks. OP has a 40 year time horizon and youâre telling them to increase their exposure to bonds? Iâd recommend VTSAX + VTIAX, maybe 70/30 but feel free to adjust for your own risk tolerance and thoughts on US vs. international.
Bonds will not be used for market gains, anyone can obviously tell bonds returns are much lower than stocks. The purpose of bonds is to adjust for risk so that when the economy takes a down turn, the losses will be much more controlled. Just because the timeline is 40 yrs, doesn't mean that heavy stock portfolio is the best.
Yeah, given youâre mostly invested in funds, after deciding on risk/allocation, you should also use some sort of portfolio x-ray tool (at least a few available online for free-Morningstarâs comes to mind but your brokerage probably offers one too) to examine your overlap for a more accurate picture of what youâre actually holding and if your allocations are actually on target.
Too much tech
All in TSLA. đ€źWell. Thatâs what I did with 1/3 of my dough when I was 29. When they built their second super charger đ€«