Taxable Savings Asset Mix - Help.

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Topic Author
edudad
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Joined: Wed Mar 24, 2021 10:47 am

Taxable Savings Asset Mix - Help.

Post by edudad »

Thanks for all feedback
Last edited by edudad on Wed Aug 04, 2021 10:35 am, edited 1 time in total.
livesoft
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Re: Taxable Savings Asset Mix - Help.

Post by livesoft »

That's a pretty wild set of ticker symbols. I like wild. What kind of benchmark will you be comparing this part of your portfolio to in order to know if you are getting a satisfactory risk-adjusted return and simply digging yourself a hole slowly?
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retired@50
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Re: Taxable Savings Asset Mix - Help.

Post by retired@50 »

edudad wrote: Fri May 07, 2021 7:34 pm
Currently we max out all tax advantaged accounts + HSA + Roth IRA.

Please critique my plan. Open for suggestions.
If I were you, I'd stick to VTI & VXUS in the taxable account and rarely trade, except to TLH.

I'd do all the trading shenanigans in the Roth IRA, ** IF ** I were going to trade like you describe, which I wouldn't.

I'd lump sum the money, since you have a 20 year time horizon.

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
Topic Author
edudad
Posts: 66
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Re: Taxable Savings Asset Mix - Help.

Post by edudad »

To refine it a bit How about this:

Objective: Aggressive growth
Timeframe: 20+years
Seed: $300k, adding $3.3k/month

VTI 35%
SPY/VOO 25%
VXUS 30%
BND 5%
Cash 5%

Can I do better?

Apart from the above, we have a $150k trading account where, I will keep my wild spreads, stocks and shorts.
I will also use our roth (about $230k) account for the wild things.
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GMCZ71
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Re: Taxable Savings Asset Mix - Help.

Post by GMCZ71 »

edudad wrote: Fri May 07, 2021 7:34 pm taxable account.

We plan to put in about $40k-45k/year into this.


Seed: $300k, adding $3.3k/month
SPY 30% - to write safe covered calls tri-weekly, for premiums - $50-$100 here and there.
VTI 35%
VXUS 20%
BND 5%
SPYD 5% (for dividend/growth exposure)
XLE/QQQ/TQQQ 5% (rotate between - whatever the trend is)
Cash Collateral 1% - for income producing safer derivative trades.
At equity market records highs, should we wait for a correction or DCA in $25k chunks weekly?
What would be the tax rate on these trades - calls? And how much time will it take in April to input into a tax form?
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Topic Author
edudad
Posts: 66
Joined: Wed Mar 24, 2021 10:47 am

Re: Taxable Savings Asset Mix - Help.

Post by edudad »

livesoft wrote: Fri May 07, 2021 7:43 pm That's a pretty wild set of ticker symbols. I like wild. What kind of benchmark will you be comparing this part of your portfolio to in order to know if you are getting a satisfactory risk-adjusted return and simply digging yourself a hole slowly?
The last thing we want is to dig ourselves a hole.

I have simplified the asset mix and plan to move most option trades to other type of accounts.

How does the simplified mix look?

What else should I add/remove?

Objective: Aggressive growth
Timeframe: 20+years
Seed: $300k, adding $3.3k/month

VTI 35%
SPY/VOO 25%
VXUS 30%
BND 5%
Cash 5%
Topic Author
edudad
Posts: 66
Joined: Wed Mar 24, 2021 10:47 am

Re: Taxable Savings Asset Mix - Help.

Post by edudad »

retired@50 wrote: Fri May 07, 2021 7:46 pm
edudad wrote: Fri May 07, 2021 7:34 pm
Currently we max out all tax advantaged accounts + HSA + Roth IRA.

Please critique my plan. Open for suggestions.
If I were you, I'd stick to VTI & VXUS in the taxable account and rarely trade, except to TLH.

I'd do all the trading shenanigans in the Roth IRA, ** IF ** I were going to trade like you describe, which I wouldn't.

I'd lump sum the money, since you have a 20 year time horizon.

Regards,
Great input, thank you.

Can you educate me on why the trading part is IF and is not recommended? I feel, it's a easy (with risk mitigated/protection) way to earn premiums and keep them.
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retired@50
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Re: Taxable Savings Asset Mix - Help.

Post by retired@50 »

edudad wrote: Sat May 08, 2021 8:59 am
retired@50 wrote: Fri May 07, 2021 7:46 pm
edudad wrote: Fri May 07, 2021 7:34 pm
Currently we max out all tax advantaged accounts + HSA + Roth IRA.

Please critique my plan. Open for suggestions.
If I were you, I'd stick to VTI & VXUS in the taxable account and rarely trade, except to TLH.

I'd do all the trading shenanigans in the Roth IRA, ** IF ** I were going to trade like you describe, which I wouldn't.

I'd lump sum the money, since you have a 20 year time horizon.

Regards,
Great input, thank you.

Can you educate me on why the trading part is IF and is not recommended? I feel, it's a easy (with risk mitigated/protection) way to earn premiums and keep them.
I was convinced to avoid trading stocks through a variety of channels. Friends and family had so-so luck, etc. Another channel that convinced me was reading studies like the one in the link below.

Here is the summary from Brad Barber and Terrance Odean:
Individual investors who hold common stocks directly pay a tremendous performance penalty for active trading. Of 66,465 households with accounts at a large discount broker during 1991 to 1996, those that trade most earn an annual return of 11.4 percent, while the market returns 17.9 percent. The average household earns an annual return of 16.4 percent, tilts its common stock investment toward high-beta, small, value stocks, and turns over 75 percent of its portfolio annually.Overconfidence can explain high trading levels and the resulting poor performance of individual investors. Our central message is that trading is hazardous to your wealth.
Link: https://faculty.haas.berkeley.edu/odean ... _Final.pdf

Your statement about earning premiums and keeping them needs to be compared to something with similar risk. I think that is what livesoft was driving at with his comment about the benchmark you're using for comparison? In other words, if you could make just as much money (premium) by buying an S&P 500 index fund, and have less risk, then wouldn't that be the smart play?

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
livesoft
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Joined: Thu Mar 01, 2007 7:00 pm

Re: Taxable Savings Asset Mix - Help.

Post by livesoft »

edudad wrote: Sat May 08, 2021 8:55 am
livesoft wrote: Fri May 07, 2021 7:43 pm That's a pretty wild set of ticker symbols. I like wild. What kind of benchmark will you be comparing this part of your portfolio to in order to know if you are getting a satisfactory risk-adjusted return and simply digging yourself a hole slowly?
The last thing we want is to dig ourselves a hole.

I have simplified the asset mix and plan to move most option trades to other type of accounts.

How does the simplified mix look?

What else should I add/remove?

Objective: Aggressive growth
Timeframe: 20+years
Seed: $300k, adding $3.3k/month

VTI 35%
SPY/VOO 25%
VXUS 30%
BND 5%
Cash 5%
I consider my Roth IRA precious future tax-free space and do not want to lose money in it. Thus, I never do truly wild things in my Roth. A Roth is a great place for steady-as-she-goes Broad Market Index funds like VTI, with maybe a little bit of experimental tilting with AVUV and MTUM when they have Really Bad Days.

I see no point in both VTI and SPY/VOO. I know you wanted to do some options and had SPY for that reason I think. Otherwise, your 3 fund ETF portfolio is fine.
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