100% Stock Portfolio
100% Stock Portfolio
If you were going to have a 100% stock investment portfolio, what Vanguard funds would you recommend?
I was thinking:
VFIAX - 25%
VIMAX - 25%
VSMAX - 25%
VTIAX - 25%
I understand some think 100% stock investment is crazy but I am willing to take the risk. Please don't beat me up too bad if you think I'm dumb.
Thanks.
I was thinking:
VFIAX - 25%
VIMAX - 25%
VSMAX - 25%
VTIAX - 25%
I understand some think 100% stock investment is crazy but I am willing to take the risk. Please don't beat me up too bad if you think I'm dumb.
Thanks.
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Re: 100% Stock Portfolio
Looks fine to me. I am 100% equities, but I am starting to worry about how I'll feel in a crash and am considering adding some bonds and maybe even a small bit of gold. Just something slightly or non-correlated might bring some comfort.johtaf wrote: ↑Fri Mar 12, 2021 7:40 am If you were going to have a 100% stock investment portfolio, what Vanguard funds would you recommend?
I was thinking:
VFIAX - 25%
VIMAX - 25%
VSMAX - 25%
VTIAX - 25%
I understand some think 100% stock investment is crazy but I am willing to take the risk. Please don't beat me up too bad if you think I'm dumb.
Thanks.
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle
Re: 100% Stock Portfolio
I don't know what those tickers are, but the suggestion would be total US stock market and perhaps also an allocation to international stock market. I would not recommend any other choices because they are not necessary and make things complicated and confusing.
The consensus on the forum regarding what fraction of one's stocks should be international is from 0% to 50% or maybe more than that.
Oh, I see two of those funds are small and midcaps. I would not take that tilt until you understand it well enough that you don't have to ask. There is a book on it: https://www.amazon.com/Your-Complete-Gu ... 179&sr=8-1 That is not a recommendation to do it or not to do it.
The consensus on the forum regarding what fraction of one's stocks should be international is from 0% to 50% or maybe more than that.
Oh, I see two of those funds are small and midcaps. I would not take that tilt until you understand it well enough that you don't have to ask. There is a book on it: https://www.amazon.com/Your-Complete-Gu ... 179&sr=8-1 That is not a recommendation to do it or not to do it.
Re: 100% Stock Portfolio
I think I'm a situation where I have to go 100%, I'm 44 and I'm behind. Nervous about doing it but I have talked to soo many people that believe in 100% stock portfolio and has rewarded them well
Re: 100% Stock Portfolio
Use a Target-Date Fund instead. No need to over-complicate un-necessarily. Retail Investors can get into behavioural problems doing the rebalancing themselves like the temptation to buy more of the fund that is doing well recently and to sell the fund that is not doing well recently. Even Bogle-heads aren't immune to this as evidenced by the "Why International" threads that keep popping up here.
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Re: 100% Stock Portfolio
VFIAX = Vanguard 500 Index Fund Admiral Sharesdbr wrote: ↑Fri Mar 12, 2021 7:48 am I don't know what those tickers are, but the suggestion would be total US stock market and perhaps also an allocation to international stock market. I would not recommend any other choices because they are not necessary and make things complicated and confusing.
The consensus on the forum regarding what fraction of one's stocks should be international is from 0% to 50% or maybe more than that.
Oh, I see two of those funds are small and midcaps. I would not take that tilt until you understand it well enough that you don't have to ask. There is a book on it: https://www.amazon.com/Your-Complete-Gu ... 179&sr=8-1 That is not a recommendation to do it or not to do it.
VIMAX = Vanguard Mid-Cap Index Fund Admiral Shares
VSMAX = Vanguard Small-Cap Index Fund Admiral Shares
VTIAX = Vanguard Total International Stock Index Fund Admiral Shares
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Re: 100% Stock Portfolio
That is a very heavy mid and small cap tilt and very heavy U.S. tilt.
If that's what you desire, then so be it. If you think U.S. mid and small caps will outperform U.S. large and international equities or otherwise add more diversification, then there's your justification for the tilt.
I happen to disagree. I like some bonds and I like more of a market cap equity portfolio. I have a slight U.S. tilt for no reason than I'm more comfortable with it. My equities are 65% Total U.S. market and 35% Total International market.
You have 2/3 of your U.S. equities NOT in the largest 80 or so%. Put another way, the largest 80% of the U.S. market is only 33% of your U.S. market portfolio.
I also disagree with going 100% stocks because you're behind. Save more, spend less is more important when you're behind.
If that's what you desire, then so be it. If you think U.S. mid and small caps will outperform U.S. large and international equities or otherwise add more diversification, then there's your justification for the tilt.
I happen to disagree. I like some bonds and I like more of a market cap equity portfolio. I have a slight U.S. tilt for no reason than I'm more comfortable with it. My equities are 65% Total U.S. market and 35% Total International market.
You have 2/3 of your U.S. equities NOT in the largest 80 or so%. Put another way, the largest 80% of the U.S. market is only 33% of your U.S. market portfolio.
I also disagree with going 100% stocks because you're behind. Save more, spend less is more important when you're behind.
Re: 100% Stock Portfolio
You should make decisions like this by understanding the possible consequences and then investing in a way consistent with your objectives. You can use models (FireCalc is an example of one and there are several others that people might suggest) to see what happens to different asset allocations over time. The result is a statistical range of results. All-stock portfolios can be expected to grow to greater wealth than portfolios that are more conservative but the range of possible outcomes can be very wide and the path along the way can have wild ups and downs. Note that being ten years in to one of the greatest periods of growth in the stock market ever can create an impression that all stocks is the way to go that may turn out to be highly misleading. Still, it is probably accurate that if you need to take risk, then you need to take risk.
Re: 100% Stock Portfolio
VQNPX (Vanguard Growth and Income Fund Investor Shares) over mid and small caps?Triple digit golfer wrote: ↑Fri Mar 12, 2021 7:56 am That is a very heavy mid and small cap tilt and very heavy U.S. tilt.
If that's what you desire, then so be it. If you think U.S. mid and small caps will outperform U.S. large and international equities or otherwise add more diversification, then there's your justification for the tilt.
I happen to disagree. I like some bonds and I like more of a market cap equity portfolio. I have a slight U.S. tilt for no reason than I'm more comfortable with it. My equities are 65% Total U.S. market and 35% Total International market.
You have 2/3 of your U.S. equities NOT in the largest 80 or so%. Put another way, the largest 80% of the U.S. market is only 33% of your U.S. market portfolio.
I also disagree with going 100% stocks because you're behind. Save more, spend less is more important when you're behind.
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Re: 100% Stock Portfolio
100% stock can be crazy or completely sensible depending on your individual circumstances. Not enough information in your post to comment. I don’t know what these stock tickers are, it’s best to include the fund names.johtaf wrote: ↑Fri Mar 12, 2021 7:40 am If you were going to have a 100% stock investment portfolio, what Vanguard funds would you recommend?
I was thinking:
VFIAX - 25%
VIMAX - 25%
VSMAX - 25%
VTIAX - 25%
I understand some think 100% stock investment is crazy but I am willing to take the risk. Please don't beat me up too bad if you think I'm dumb.
Thanks.
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Re: 100% Stock Portfolio
Or more simply, all VTSAX (total US market) for the domestic portion.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
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Re: 100% Stock Portfolio
Vanguard Total World Stock (VTWAX) over all of it.johtaf wrote: ↑Fri Mar 12, 2021 8:02 amVQNPX (Vanguard Growth and Income Fund Investor Shares) over mid and small caps?Triple digit golfer wrote: ↑Fri Mar 12, 2021 7:56 am That is a very heavy mid and small cap tilt and very heavy U.S. tilt.
If that's what you desire, then so be it. If you think U.S. mid and small caps will outperform U.S. large and international equities or otherwise add more diversification, then there's your justification for the tilt.
I happen to disagree. I like some bonds and I like more of a market cap equity portfolio. I have a slight U.S. tilt for no reason than I'm more comfortable with it. My equities are 65% Total U.S. market and 35% Total International market.
You have 2/3 of your U.S. equities NOT in the largest 80 or so%. Put another way, the largest 80% of the U.S. market is only 33% of your U.S. market portfolio.
I also disagree with going 100% stocks because you're behind. Save more, spend less is more important when you're behind.
Or if you prefer a U.S. tilt, a split of Vanguard Total Stock (VTSAX) and Vanguard Total international (VTIAX) in your desired ratio.
"Total" funds are great because you're making no bets on which sector, style, size, etc. will outperform. You're just owning the market exactly as it is. Anything else is a bet (maybe "bet" is not the right word, but you get the idea) that may or may not beat the market as it is. The market is the aggregate opinion of millions of investors. Do you know more than all the millions of investors do in the aggregate?
Re: 100% Stock Portfolio
Sorry.minimalistmarc wrote: ↑Fri Mar 12, 2021 8:08 am100% stock can be crazy or completely sensible depending on your individual circumstances. Not enough information in your post to comment. I don’t know what these stock tickers are, it’s best to include the fund names.johtaf wrote: ↑Fri Mar 12, 2021 7:40 am If you were going to have a 100% stock investment portfolio, what Vanguard funds would you recommend?
I was thinking:
VFIAX - 25%
VIMAX - 25%
VSMAX - 25%
VTIAX - 25%
I understand some think 100% stock investment is crazy but I am willing to take the risk. Please don't beat me up too bad if you think I'm dumb.
Thanks.
VFIAX = Vanguard 500 Index Fund Admiral Shares
VIMAX = Vanguard Mid-Cap Index Fund Admiral Shares
VSMAX = Vanguard Small-Cap Index Fund Admiral Shares
VTIAX = Vanguard Total International Stock Index Fund Admiral Shares
Re: 100% Stock Portfolio
Any reason that it has to be Vanguard's mutual funds? Not saying they are bad at all.
The fact you're already nervous about it that is not a good place to be. An hourly financial advisor may be best to consult with as they can help behavioral mistakes.
You may also want to consider an aggressive target date fund or life strategy fund to help reduce behavioral mistakes. It's a good starting place.
One fund portfolio discussion
viewtopic.php?t=287967
The fact you're already nervous about it that is not a good place to be. An hourly financial advisor may be best to consult with as they can help behavioral mistakes.
You may also want to consider an aggressive target date fund or life strategy fund to help reduce behavioral mistakes. It's a good starting place.
One fund portfolio discussion
viewtopic.php?t=287967
Last edited by jason2459 on Fri Mar 12, 2021 8:14 am, edited 1 time in total.
"In the short run, the stock market is a voting machine; in the long run, it is a weighing machine" ~Benjamin Graham
Re: 100% Stock Portfolio
Go with VT.
If you want lower costs, go with VTI + VXUS.
If you want lower costs, go with VTI + VXUS.
Stocks-80% || Bonds-20% || Taxable-VTI/VXUS || IRA-VT/BNDW
Re: 100% Stock Portfolio
Don't hunt around for answers by picking funds. For a 100% stock portfolio just holding US total stock market is fine. Shifting about 25% to international stock market would not be a mistake but won't ex ante* have a major effect on your results.johtaf wrote: ↑Fri Mar 12, 2021 8:02 amVQNPX (Vanguard Growth and Income Fund Investor Shares) over mid and small caps?Triple digit golfer wrote: ↑Fri Mar 12, 2021 7:56 am That is a very heavy mid and small cap tilt and very heavy U.S. tilt.
If that's what you desire, then so be it. If you think U.S. mid and small caps will outperform U.S. large and international equities or otherwise add more diversification, then there's your justification for the tilt.
I happen to disagree. I like some bonds and I like more of a market cap equity portfolio. I have a slight U.S. tilt for no reason than I'm more comfortable with it. My equities are 65% Total U.S. market and 35% Total International market.
You have 2/3 of your U.S. equities NOT in the largest 80 or so%. Put another way, the largest 80% of the U.S. market is only 33% of your U.S. market portfolio.
I also disagree with going 100% stocks because you're behind. Save more, spend less is more important when you're behind.
The suggestion for a target date fund is sensible but I would not use a balanced/blended fund in a taxable account because accumulation of gains leaves you trapped with a tax bill if you want to change later.
I personally would take the above suggestion and look at how I can spend less and save more. I would start looking at planning models like FireCalc and see where you can go from here with current assets, rate of contribution, and time.
*Ex ante means estimated results before the fact.
Re: 100% Stock Portfolio
100% in Vanguard Total World Stock ETF (VT) or the equivalent Mutual Fund.
Re: 100% Stock Portfolio
My wife and I are more or less 100% VTWAX (total global market cap-weighted). We approximate it with other funds in our 401k accounts which don't offer VTWAX, but eventually, we will probably roll everything into VTWAX. It's simple. I like simple.
Re: 100% Stock Portfolio
Considering:
(a) You feel a need to take on risk to catch up because you are behind,
(b) You are nervous about the risk,
(c) You plan to invest in stock index mutual funds,
here's a suggestion.
Go something like 90/10 rather than 100/0. Keep the 10% in a purely liquid money market-type fund. If and when the market tanks significantly and you start to feel nervous and upset, take a couple of hundred bucks (or whatever) from cash and move it to one of your indexes. The market tumbles 2% more the next day? Repeat. There is no frequent trading limit for additions into index funds from money market funds (this is my experience, please verify for your specific fund choices). This means that in a downturn you can keep buying at bargain prices, and instead of feeling like a punching bag when the market goes down, you feel like a wise jungle cat on the prowl for a nice meal.
If you want a balanced fund that is very aggressive (greater than 80/20), without foreign bonds, and will rebalance automatically, then check out FFNOX - - Fidelity's Four-In-One index. The automatic rebalance of a balanced fund serves that "buy-low-sell high" rebalance function which can help you deal with the dangerous emotions stirred by market downturns by making you feel like a smart buyer instead of a hapless victim.
Best wishes. You are still young (trust me!!!!!!). Do the all you can to keep your work skills leading edge and add steadily to your responsibilities so that you maximize your intellectual capital, and at the same time keep investing regularly and you will do just fine and retire comfortably and happy.
(a) You feel a need to take on risk to catch up because you are behind,
(b) You are nervous about the risk,
(c) You plan to invest in stock index mutual funds,
here's a suggestion.
Go something like 90/10 rather than 100/0. Keep the 10% in a purely liquid money market-type fund. If and when the market tanks significantly and you start to feel nervous and upset, take a couple of hundred bucks (or whatever) from cash and move it to one of your indexes. The market tumbles 2% more the next day? Repeat. There is no frequent trading limit for additions into index funds from money market funds (this is my experience, please verify for your specific fund choices). This means that in a downturn you can keep buying at bargain prices, and instead of feeling like a punching bag when the market goes down, you feel like a wise jungle cat on the prowl for a nice meal.
If you want a balanced fund that is very aggressive (greater than 80/20), without foreign bonds, and will rebalance automatically, then check out FFNOX - - Fidelity's Four-In-One index. The automatic rebalance of a balanced fund serves that "buy-low-sell high" rebalance function which can help you deal with the dangerous emotions stirred by market downturns by making you feel like a smart buyer instead of a hapless victim.
Best wishes. You are still young (trust me!!!!!!). Do the all you can to keep your work skills leading edge and add steadily to your responsibilities so that you maximize your intellectual capital, and at the same time keep investing regularly and you will do just fine and retire comfortably and happy.
Re: 100% Stock Portfolio
This is a huge red flag about going 100% stocks. Just because it is right for other people does not mean it is right for you. If you are nervous, then 100% stocks is not right for you. Having some bonds will help you sleep at night and calm your anxieties and prevent you from panicking if and when a market crash comes. Unless you yourself are completely sure and not nervous about 100% stocks, then do not do it. Please strongly consider having part of your allocation in bonds, anywhere in the range of 10-30%.
Much less important than the stock/bond allocation, but also worth mentioning, is your proposed small-cap tilt. Can you justify why you want a quarter of your stocks in small-cap rather than going with the simpler, and widely recommended, total stock market index? For US equities I stick with total stock market index, VTSAX.
Re: 100% Stock Portfolio
I was 100% stocks until 5 years before retirement. It can be a roller-coaster ride.
In order to hold 100% stocks in a major downturn (like 2008) one has to be able to "go Spock" (Star Trek reference) and force your logic to over-ride your gut. Your emotions will be screaming "SELL!" and our intellect must be able to override those emotions. Very few individuals can do this when they see a portfolio loss of hundreds of thousands of dollars. My sister sold out just before the bottom in 2008/2009 and lost over a third of her portfolio value.
One thing that really helps is a small bond holding (say, 90/10) so one can rebalance into stocks after a large drop in stock value. It is a huge behavioral advantage to be able to "do something" when the market drops. For this reason alone I would not hold 100% stocks if I had it to do over again.
In order to hold 100% stocks in a major downturn (like 2008) one has to be able to "go Spock" (Star Trek reference) and force your logic to over-ride your gut. Your emotions will be screaming "SELL!" and our intellect must be able to override those emotions. Very few individuals can do this when they see a portfolio loss of hundreds of thousands of dollars. My sister sold out just before the bottom in 2008/2009 and lost over a third of her portfolio value.
One thing that really helps is a small bond holding (say, 90/10) so one can rebalance into stocks after a large drop in stock value. It is a huge behavioral advantage to be able to "do something" when the market drops. For this reason alone I would not hold 100% stocks if I had it to do over again.
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
Re: 100% Stock Portfolio
If you had to do it over again, would you have held 90/10?David Jay wrote: ↑Fri Mar 12, 2021 9:51 am I was 100% stocks until 5 years before retirement. It can be a roller-coaster ride.
In order to hold 100% stocks in a major downturn (like 2008) one has to be able to "go Spock" (Star Trek reference) and force your logic to over-ride your gut. Your emotions will be screaming "SELL!" and our intellect must be able to override those emotions. Very few individuals can do this when they see a portfolio loss of hundreds of thousands of dollars. My sister sold out just before the bottom in 2008/2009 and lost over a third of her portfolio value.
One thing that really helps is a small bond holding (say, 90/10) so one can rebalance into stocks after a large drop in stock value. It is a huge behavioral advantage to be able to "do something" when the market drops. For this reason alone I would not hold 100% stocks if I had it to do over again.
Vanguard Target retirement funds hold 90/10 in the early stages I think.
Stocks-80% || Bonds-20% || Taxable-VTI/VXUS || IRA-VT/BNDW
Re: 100% Stock Portfolio
OP,
You made a fundamental mistake. You cannot reach your goal with 100% stock. So, it won't matter at all. In fact, you would most likely to be wipe out in the coming recession with 100% stock.
This can be proven mathematically.
A) What is your annual expenses?
B) What is your annual savings?
C) What is the size of your emergency fund?
Provide us with (A) to (C) and I can show you why this is true.
The only way for you to reach your number is with a higher saving rate. And, if you have a high enough saving rate, you do not need 100% stock. The AA would be irrelevant.
KlangFool
You made a fundamental mistake. You cannot reach your goal with 100% stock. So, it won't matter at all. In fact, you would most likely to be wipe out in the coming recession with 100% stock.
This can be proven mathematically.
A) What is your annual expenses?
B) What is your annual savings?
C) What is the size of your emergency fund?
Provide us with (A) to (C) and I can show you why this is true.
The only way for you to reach your number is with a higher saving rate. And, if you have a high enough saving rate, you do not need 100% stock. The AA would be irrelevant.
KlangFool
30% VWENX | 16% VFWAX/VTIAX | 14.5% VTSAX | 19.5% VBTLX | 10% VSIAX/VTMSX/VSMAX | 10% VSIGX| 30% Wellington 50% 3-funds 20% Mini-Larry
Re: 100% Stock Portfolio
I currently split 50/50 Total Stock and Total International, but if I could do it all over again I would just hold 100% VTWAX (total world) and be done with it. Simplicity is worth the slightly higher ER I think, if only because it protects you from the temptation to tinker and market time.
70% Global Stocks / 30% Bonds
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Re: 100% Stock Portfolio
If you're 100% stocks, I don't think it matters much to split 25% among certain tilts. Should just go with VT or VTSAX in my opinion.
Re: 100% Stock Portfolio
+1KlangFool wrote: ↑Fri Mar 12, 2021 10:40 am OP,
You made a fundamental mistake. You cannot reach your goal with 100% stock. So, it won't matter at all. In fact, you would most likely to be wipe out in the coming recession with 100% stock.
This can be proven mathematically.
A) What is your annual expenses?
B) What is your annual savings?
C) What is the size of your emergency fund?
Provide us with (A) to (C) and I can show you why this is true.
The only way for you to reach your number is with a higher saving rate. And, if you have a high enough saving rate, you do not need 100% stock. The AA would be irrelevant.
KlangFool
I was 100/0. I moved to 80/20. The 20% bonds covers a little over 4 years of expenses. My goal is to hit 5 years of expenses in bonds.
The stock portion is still high enough to cover the growth needed to hit our ultimate goal, which is close. We didn't need to take the risk of 100/0 anymore.
Stocks-80% || Bonds-20% || Taxable-VTI/VXUS || IRA-VT/BNDW
Re: 100% Stock Portfolio
65% VTI
20% VEA
15% VWO
20% VEA
15% VWO
Re: 100% Stock Portfolio
I don't know about proof, but it is true that if you compare a model like FireCalc running 100% stock vs 0% stock while contributing constantly for a number of years, the worst case for 100% stocks is about the same as the worst case for 0% stocks. So it is possible 100% stocks will be of no help at all.
The result on average will be higher for 100% stocks but probably not by enough to save the day. The best result for 100% stocks is good enough that it would save the day, but the chances of that are not very good.
When we talk about results we understand that the investor is going to get one single actual outcome from a range of possible outcomes we contemplate before the fact. The average of all those possibilities is not to be expected, which is why trying to save the day by increasing risk is not a practical approach to the problem.
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Re: 100% Stock Portfolio
If AA is really irrelevant why do you always say not to be 100% stock? Do you realize it has historically essentially the highest return?KlangFool wrote: ↑Fri Mar 12, 2021 10:40 am OP,
You made a fundamental mistake. You cannot reach your goal with 100% stock. So, it won't matter at all. In fact, you would most likely to be wipe out in the coming recession with 100% stock.
This can be proven mathematically.
A) What is your annual expenses?
B) What is your annual savings?
C) What is the size of your emergency fund?
Provide us with (A) to (C) and I can show you why this is true.
The only way for you to reach your number is with a higher saving rate. And, if you have a high enough saving rate, you do not need 100% stock. The AA would be irrelevant.
KlangFool
I am much further along towards my goals by being 100% stock, so your above statement is false. In a recession, is a 40% drop (70/30) that much different from a 50% drop (100/0)?
For the 1000th time: Please be careful sharing clearly false information. Many very successful and knowledgeable investors have been in high equities their whole life.
VTSAX and chill
Re: 100% Stock Portfolio
Human capital is also very important to consider. If OP is having Government type job this 100% stocks could be reasonable however if OP is in a job which is correlated with stock market they should have lower exposure to stocks than 100%.
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Re: 100% Stock Portfolio
That is reasonable, and it really depends on you situation and temperament. Adding some bonds will still get you there. However, if you have a pension like others stated or you can live off social security, you can throw the dice and be 100% stock or 100% bonds. As a Boglehead and John Bogle follower, I always repeat to myself, never too much or too little risk and of course no matter what allocation you choose. Stay the Course!! As for me,
I think balance is important and it will probably give you a better night's sleep when the market drops.
I think balance is important and it will probably give you a better night's sleep when the market drops.
Re: 100% Stock Portfolio
Here's a chart that shows the real-world portfolio growth of your proposed portfolio looking at every annual start date since 1970. Note that you can change the starting value, annual contribution, and goal to model your own situation.
https://portfoliocharts.com/portfolio/p ... 5AH25EA25Z
There are two important things here to consider:
1. Variability. Investing in 100% stocks may provide high average returns, but the resulting portfolio values over time are highly uncertain. How will you feel if your own investing timeframe more closely resembles the worst case than the best case?
2. Savings rate. Play with the annual contribution and watch how much of an effect it has on the results. The amount that you save every year generally has a much greater effect on speeding up accumulation than even the best portfolio choice.
Combine 1 and 2, and for many people selecting a more dependable, diversified portfolio while focusing their optimization energy on saving more every year is the more sustainable investing strategy. There's nothing wrong with investing in 100% stocks, but you definitely don't have to in order to achieve your goals. You just need a good financial plan and the determination to make it work.
Re: 100% Stock Portfolio
I've got $20,000 in my emergency fund and can add roughly $7,000/year to it based on current take home income. My emergency fund is a money market account with Vanguard.
I also have a 401K with my employer through fidelity which I put 15% pre-tax income ($60,000/yr), $2000 employer match. Throw in another $3000 for bonus which I can contribute 100% to 401k, pre-tax
My Vanguard account is an IRA.
My total investments add up to $110,000 and I'm 44yrs old. No debt. I rent so no mortgage.
I also have a 401K with my employer through fidelity which I put 15% pre-tax income ($60,000/yr), $2000 employer match. Throw in another $3000 for bonus which I can contribute 100% to 401k, pre-tax
My Vanguard account is an IRA.
My total investments add up to $110,000 and I'm 44yrs old. No debt. I rent so no mortgage.
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Re: 100% Stock Portfolio
Skip the mid-cap, VSMAX has plenty of mid-cap exposure but I would make it VSIAX (small-value) instead.
If you wanted to stick with mutual funds then I would do:
50% VLCAX (VFIAX or VTSAX are fine too)
20% VSIAX
30% VTIAX
Or something along those lines.
Simple, diversified, and expected to outperform the market (small and value exposure).
If you wanted to stick with mutual funds then I would do:
50% VLCAX (VFIAX or VTSAX are fine too)
20% VSIAX
30% VTIAX
Or something along those lines.
Simple, diversified, and expected to outperform the market (small and value exposure).
Re: 100% Stock Portfolio
+1 on not having mid-cap. It doesn't give you any better return nor significant diversification.MotoTrojan wrote: ↑Fri Mar 12, 2021 12:17 pm Skip the mid-cap, VSMAX has plenty of mid-cap exposure but I would make it VSIAX (small-value) instead.
If you wanted to stick with mutual funds then I would do:
50% VLCAX (VFIAX or VTSAX are fine too)
20% VSIAX
30% VTIAX
Or something along those lines.
Simple, diversified, and expected to outperform the market (small and value exposure).
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Re: 100% Stock Portfolio
Especially with CRSP indices, which call small-cap the smallest 15% (Russell 2000 and S&P600 use a 10% cut-off, so much smaller median market-cap).jarjarM wrote: ↑Fri Mar 12, 2021 12:18 pm+1 on not having mid-cap. It doesn't give you any better return nor significant diversification.MotoTrojan wrote: ↑Fri Mar 12, 2021 12:17 pm Skip the mid-cap, VSMAX has plenty of mid-cap exposure but I would make it VSIAX (small-value) instead.
If you wanted to stick with mutual funds then I would do:
50% VLCAX (VFIAX or VTSAX are fine too)
20% VSIAX
30% VTIAX
Or something along those lines.
Simple, diversified, and expected to outperform the market (small and value exposure).
- peterinjapan
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- Location: Japan!
Re: 100% Stock Portfolio
I'm 52 and I have a 99.5% stock portfolio. My "bonds" are
a) social security
b) my super-conservative Japanese wife, who only invests in various bonds in her portfolio
c) a company I sold, and am receiving payments for over the next 7 years, which I consider bond-like.
d) a "retirement bonus" that my company will pay out when I retire (according to a Japanese system that's different from anything in the US)
a) social security
b) my super-conservative Japanese wife, who only invests in various bonds in her portfolio
c) a company I sold, and am receiving payments for over the next 7 years, which I consider bond-like.
d) a "retirement bonus" that my company will pay out when I retire (according to a Japanese system that's different from anything in the US)
Re: 100% Stock Portfolio
If I had to do it over, I would not use a target date fund because I want the behavioral benefit of rebalancing in a down market and I would not want to begin a “glideslope” in my 40s.lostdog wrote: ↑Fri Mar 12, 2021 10:00 amIf you had to do it over again, would you have held 90/10?David Jay wrote: ↑Fri Mar 12, 2021 9:51 am I was 100% stocks until 5 years before retirement. It can be a roller-coaster ride.
In order to hold 100% stocks in a major downturn (like 2008) one has to be able to "go Spock" (Star Trek reference) and force your logic to over-ride your gut. Your emotions will be screaming "SELL!" and our intellect must be able to override those emotions. Very few individuals can do this when they see a portfolio loss of hundreds of thousands of dollars. My sister sold out just before the bottom in 2008/2009 and lost over a third of her portfolio value.
One thing that really helps is a small bond holding (say, 90/10) so one can rebalance into stocks after a large drop in stock value. It is a huge behavioral advantage to be able to "do something" when the market drops. For this reason alone I would not hold 100% stocks if I had it to do over again.
Vanguard Target retirement funds hold 90/10 in the early stages I think.
Probably 90/10 or 80/20.
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
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Re: 100% Stock Portfolio
I'll let other folks chime in on the best 100% equity strategy.
Seems to me from what you've written above that you, or someone like you, would be a perfect candidate to consider using Treasury Direct Savings Bonds.
You could auto-purchase I-Bonds from Treasury direct with a small portion of your savings/investing money. Then, at age 47, or whenever you get to 20 years from your target date to start collecting social security, switch your I-bond purchase to an auto-purchase of an EE Bond ladder.
I know this may sound counter intuitive if you are hell-bent on 100% equities and winning 'big rewards', but one of the reasons I Bonds and EE Bonds exist is for people in your exact situation.
Think of it this way, if you do go through with your equities strategy, but toss $150 odd dollars a month to an EE Bond ladder, that monthly $150 becomes a 20 year $300 a month income stream in retirement.
That $300 a month income stream would likely cost you $90,000 at age 67, but you can purchase it upfront for $150 a month (total cost $36,000) starting at age 47, and unlike equities, EE bonds are both guaranteed and not market-priced...ie. you just get the money.
Like I said, may not be for you, but anyone reading this thread and feeling "behind" in their 40's should know that there's plenty of time to add a highly desirable guaranteed income stream in retirement using EE Bonds for a very small upfront contribution.
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Re: 100% Stock Portfolio
I think your sentiment is valid. It'll be a rocky ride but if you can tolerate the drawdowns then have at it.
Re: 100% Stock Portfolio
johtaf,johtaf wrote: ↑Fri Mar 12, 2021 12:12 pm I've got $20,000 in my emergency fund and can add roughly $7,000/year to it based on current take home income. My emergency fund is a money market account with Vanguard.
I also have a 401K with my employer through fidelity which I put 15% pre-tax income ($60,000/yr), $2000 employer match. Throw in another $3000 for bonus which I can contribute 100% to 401k, pre-tax
My Vanguard account is an IRA.
My total investments add up to $110,000 and I'm 44yrs old. No debt. I rent so no mortgage.
1) What is your annual expense?
<<I've got $20,000 in my emergency fund and can add roughly $7,000/year>>
<< which I put 15% pre-tax income ($60,000/yr), $2000 employer match. >>
<<Throw in another $3000 for bonus which I can contribute 100% to 401k, pre-tax>>
2) Why won't you max up your 401K up to 19.5K?
3) Why won't you contribute to your Roth IRA? Or, put your Emergency Fund into the Roth IRA?
4) So, your annual saving is around 21K (7K + 9K+ 2K+ 3K). Let's assume your annual savings = 20K and annual expense = 20K. Your current portfolio is 110K. So, where is your problem? Why do you need 100% stock? Let's assume 30 x 20K = 600K is your number.
You can reach 600K in 10 years with an annual return rate of 10%
You can reach 600K in 12 years with an annual return rate of 7%
You can reach 600K in 14 years with an annual return rate of 7%
Starting Net Worth $110,000
Annual Savings $20,000
Years
Annual Return Rate 10 11 12 13 14
5.00% $430,736 $472,273 $515,887 $561,681 $609,765
6.00% $460,609 $508,246 $558,740 $612,265 $669,001
7.00% $492,716 $547,206 $605,510 $667,896 $734,649
8.00% $527,213 $589,390 $656,541 $729,065 $807,390
9.00% $564,269 $635,053 $712,208 $796,306 $887,974
10.00% $604,060 $684,466 $772,913 $870,204 $977,224
You have no problem reaching your goal with your current saving rate. AA does not matter.
KlangFool
30% VWENX | 16% VFWAX/VTIAX | 14.5% VTSAX | 19.5% VBTLX | 10% VSIAX/VTMSX/VSMAX | 10% VSIGX| 30% Wellington 50% 3-funds 20% Mini-Larry
- patrick013
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Re: 100% Stock Portfolio
Without VTIAX 1/3 each backtests very well. CRSP indexes.
There are some threads about 1/3 each for added info.
age in bonds, buy-and-hold, 10 year business cycle
- geerhardusvos
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- Location: heavenlies
Re: 100% Stock Portfolio
If AA does not matter why and how did you select your AA?
If someone started investing 30 years ago with a 50/50, and their best friend started investing the same year with a 90/10, what would the difference in outcomes be if they each saved 20% of their income each year? Can you show me a 30 year period where the 90/10 didn’t come out ahead? How far ahead is 90/10 (when comparing to 50/50) over the last 20 years, 30 years, 40 years? The same could be said about 100/0. Is AA of little consequence, or are we talking hundreds of thousands of dollars? Are you willing to look at the data?
Savings rate is important, but for the OP and the rest of us, asset allocation clearly matters...
VTSAX and chill
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- Joined: Wed May 05, 2021 6:38 am
Re: 100% Stock Portfolio
Hey. Thanks for this suggestion. Is there a name for this approach? I’m wondering if there are specific bands at which you buy in and then sell out that 10%. You could probably automate those trades too to get closer to passive. We’re clearly off “the course” here. Or are we? Hmmm.Beehave wrote: ↑Fri Mar 12, 2021 8:42 am Considering:
(a) You feel a need to take on risk to catch up because you are behind,
(b) You are nervous about the risk,
(c) You plan to invest in stock index mutual funds,
here's a suggestion.
Go something like 90/10 rather than 100/0. Keep the 10% in a purely liquid money market-type fund. If and when the market tanks significantly and you start to feel nervous and upset, take a couple of hundred bucks (or whatever) from cash and move it to one of your indexes. The market tumbles 2% more the next day? Repeat. There is no frequent trading limit for additions into index funds from money market funds (this is my experience, please verify for your specific fund choices). This means that in a downturn you can keep buying at bargain prices, and instead of feeling like a punching bag when the market goes down, you feel like a wise jungle cat on the prowl for a nice meal.
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Re: 100% Stock Portfolio
You know yourself and there’s nothing wrong with 100% in stock portfolio.
- LiveSimple
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Re: 100% Stock Portfolio
Please check this and pick a portfolio suits you and your family
https://www.whitecoatinvestor.com/150-p ... han-yours/
https://www.whitecoatinvestor.com/150-p ... han-yours/
Invest when you have the money, sell when you need the money, for real life expenses...
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Re: 100% Stock Portfolio
I would do what Warren Buffett suggests (for the Know-Nothing Investor). The Vanguard 500 Index or the Total Stock Market Index.
I don't think international is necessary, but if you want to add it, no more than 20%. If that is the case the Total International Stock Market Index would be the one. Keep investing simple.
Good Luck
I don't think international is necessary, but if you want to add it, no more than 20%. If that is the case the Total International Stock Market Index would be the one. Keep investing simple.
Good Luck
Re: 100% Stock Portfolio
"coming recession"?KlangFool wrote: ↑Fri Mar 12, 2021 10:40 am OP,
You made a fundamental mistake. You cannot reach your goal with 100% stock. So, it won't matter at all. In fact, you would most likely to be wipe out in the coming recession with 100% stock.
This can be proven mathematically.
A) What is your annual expenses?
B) What is your annual savings?
C) What is the size of your emergency fund?
Provide us with (A) to (C) and I can show you why this is true.
The only way for you to reach your number is with a higher saving rate. And, if you have a high enough saving rate, you do not need 100% stock. The AA would be irrelevant.
KlangFool
Re: 100% Stock Portfolio
the OP is 44lostdog wrote: ↑Fri Mar 12, 2021 11:07 am+1KlangFool wrote: ↑Fri Mar 12, 2021 10:40 am OP,
You made a fundamental mistake. You cannot reach your goal with 100% stock. So, it won't matter at all. In fact, you would most likely to be wipe out in the coming recession with 100% stock.
This can be proven mathematically.
A) What is your annual expenses?
B) What is your annual savings?
C) What is the size of your emergency fund?
Provide us with (A) to (C) and I can show you why this is true.
The only way for you to reach your number is with a higher saving rate. And, if you have a high enough saving rate, you do not need 100% stock. The AA would be irrelevant.
KlangFool
I was 100/0. I moved to 80/20. The 20% bonds covers a little over 4 years of expenses. My goal is to hit 5 years of expenses in bonds.
The stock portion is still high enough to cover the growth needed to hit our ultimate goal, which is close. We didn't need to take the risk of 100/0 anymore.
- ruralavalon
- Posts: 26351
- Joined: Sat Feb 02, 2008 9:29 am
- Location: Illinois
Re: 100% Stock Portfolio
I recommend Vanguard Total Stock Market Index Fund (VTSAX) ER 0.04%.johtaf wrote: ↑Fri Mar 12, 2021 7:40 am If you were going to have a 100% stock investment portfolio, what Vanguard funds would you recommend?
I was thinking:
VFIAX - 25%
VIMAX - 25%
VSMAX - 25%
VTIAX - 25%
I understand some think 100% stock investment is crazy but I am willing to take the risk. Please don't beat me up too bad if you think I'm dumb.
Thanks.
Being age 44 and "behind" does not mean that 100% stocks is a "have to", or a good idea.
$110k and debt free at age 44 is NOT behind.
If you feel behind then the better strategy is to establish a high rate of contributions to available tax-advantaged accounts, and a reasonable asset allocation, forum discussion. A high risk asset allocation could easily backfire and leave you worse off.
Rather than enlarge your emergency fund I suggest the $7k be used to increase contributions to the 401k. Try to make maximum annual employee contributions to your employer's 401k ($19.5k this year, $20.5k in 2022). The employer match does not count towards the employee maximum, it's extra.johtaf wrote: ↑Fri Mar 12, 2021 12:12 pm I've got $20,000 in my emergency fund and can add roughly $7,000/year to it based on current take home income. My emergency fund is a money market account with Vanguard.
I also have a 401K with my employer through fidelity which I put 15% pre-tax income ($60,000/yr), $2000 employer match. Throw in another $3000 for bonus which I can contribute 100% to 401k, pre-tax
My Vanguard account is an IRA.
My total investments add up to $110,000 and I'm 44yrs old. No debt. I rent so no mortgage.
What funds do you currently use in your 401k account? What funds are offered in your employer's 401k plan? Please give fund names, tickers and expense ratios.
Last edited by ruralavalon on Sat Dec 04, 2021 9:26 am, edited 3 times in total.
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