How is my portfolio, and what stocks should I buy in my brokerage?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
OutOfCollegeInvestor
Posts: 57
Joined: Fri Jul 03, 2020 3:26 pm

How is my portfolio, and what stocks should I buy in my brokerage?

Post by OutOfCollegeInvestor »

Hi I’m turning 24 soon and I’m looking to review my portfolio and see if I need to make any changes. I also get roughly an extra $600-$1400 every month from my RSUs vesting, so I wanted to know how to invest that money in a taxable brokerage.

Income is a bit north of $100k. I put $19,500 in an employer 401k (my employer has horrible matching, I believe it’s 50% up to 6% of income. My last internship did 1:1 up to the federal limit). I put $500 a month into a Roth Individual Retirement Account.

For the Roth IRA: VTWAX (0.10% expense ratio)
For the 401K: Vanguard Target Fund 2065 retirement with 0.065% expense ratio
For the brokerage: 60% VTI and 40% VXUS (although I heard I should just do 100% VTI since VXUS isn’t tax efficient? I still don’t understand tax efficiency I was just trying to mirror VTWAX in the brokerage).

I chose this because I didn’t want to monitor my 401k or Roth IRA. If 401k had VTWAX I would have chose that. I don’t want any bonds. So I’m probably like 93% equities and 7% bonds right now. I could change my 401k to do S&P 500 fund (FXAIX) and international fund (FSPSX or FDIKX) but I feel since target date fund is already there, there’s no point in managing. But maybe I’m wrong so hence why I’m asking.

I also wasn’t sure how to invest the extra $1k I’m getting per month outside of Roth IRA and 401k. I wanted to have a savings outside of emergency fund but don’t want inflation to eat it up. This is long term savings (5+ years) and I don’t plan to liquidate it unless necessary. I was thinking since I’m already doing the safe thing of investing in index funds in retirement, I can chase better returns by investing 50% in MSFT and GOOG and tech stocks, and the other 50% into a 60/40 split of VTI and VXUS.

My only dilemma is I’m not sure how much I should put in a brokerage vs general savings. I don’t like having too much cash getting eaten by inflation in a bank, only the bare minimum of emergency fund. I do want to buy a nice car within 2-3 years but plan on getting a loan even if I can buy cash. Just so I can invest more money. Or should I be holding some in cash? Or safer investments? And what percentage?

Other goals: buy a home within 10 years (median home price here is $900,000 and I don’t want to move).

I’m very bad with money and don’t track my spending, but so far I’ve been able to take nice vacations ($10,000 a year, gotta enjoy life while I’m single and young haha) and haven’t dipped into my emergency fund so I guess that’s good.
User avatar
JoeRetire
Posts: 15381
Joined: Tue Jan 16, 2018 1:44 pm

Re: How is my portfolio, and what stocks should I buy in my brokerage?

Post by JoeRetire »

OutOfCollegeInvestor wrote: Mon Jan 24, 2022 4:00 pmmy employer has horrible matching, I believe it’s 50% up to 6% of income.
That's not horrible.
Many employers provide no match at all.
My only dilemma is I’m not sure how much I should put in a brokerage vs general savings. I don’t like having too much cash getting eaten by inflation in a bank, only the bare minimum of emergency fund. I do want to buy a nice car within 2-3 years but plan on getting a loan even if I can buy cash. Just so I can invest more money. Or should I be holding some in cash?
As always, it depends.

You should have an emergency fund of at least 6 months expenses. And then you need to have funds available for the bigger purchases you want to make like a car or house down payment.

It's okay to "plan on getting a loan" but you realistically have no idea what the terms might be so far down the road. It may make sense to get a loan at that point, or it may not. Stay as flexible as you can.
This isn't just my wallet. It's an organizer, a memory and an old friend.
invest2bfree
Posts: 1279
Joined: Sun Jan 12, 2020 8:44 am

Re: How is my portfolio, and what stocks should I buy in my brokerage?

Post by invest2bfree »

OutOfCollegeInvestor wrote: Mon Jan 24, 2022 4:00 pm Hi I’m turning 24 soon and I’m looking to review my portfolio and see if I need to make any changes. I also get roughly an extra $600-$1400 every month from my RSUs vesting, so I wanted to know how to invest that money in a taxable brokerage.

Income is a bit north of $100k. I put $19,500 in an employer 401k (my employer has horrible matching, I believe it’s 50% up to 6% of income. My last internship did 1:1 up to the federal limit). I put $500 a month into a Roth Individual Retirement Account.

For the Roth IRA: VTWAX (0.10% expense ratio)
For the 401K: Vanguard Target Fund 2065 retirement with 0.065% expense ratio
For the brokerage: 60% VTI and 40% VXUS (although I heard I should just do 100% VTI since VXUS isn’t tax efficient? I still don’t understand tax efficiency I was just trying to mirror VTWAX in the brokerage).

I chose this because I didn’t want to monitor my 401k or Roth IRA. If 401k had VTWAX I would have chose that. I don’t want any bonds. So I’m probably like 93% equities and 7% bonds right now. I could change my 401k to do S&P 500 fund (FXAIX) and international fund (FSPSX or FDIKX) but I feel since target date fund is already there, there’s no point in managing. But maybe I’m wrong so hence why I’m asking.

I also wasn’t sure how to invest the extra $1k I’m getting per month outside of Roth IRA and 401k. I wanted to have a savings outside of emergency fund but don’t want inflation to eat it up. This is long term savings (5+ years) and I don’t plan to liquidate it unless necessary. I was thinking since I’m already doing the safe thing of investing in index funds in retirement, I can chase better returns by investing 50% in MSFT and GOOG and tech stocks, and the other 50% into a 60/40 split of VTI and VXUS.

My only dilemma is I’m not sure how much I should put in a brokerage vs general savings. I don’t like having too much cash getting eaten by inflation in a bank, only the bare minimum of emergency fund. I do want to buy a nice car within 2-3 years but plan on getting a loan even if I can buy cash. Just so I can invest more money. Or should I be holding some in cash? Or safer investments? And what percentage?

Other goals: buy a home within 10 years (median home price here is $900,000 and I don’t want to move).

I’m very bad with money and don’t track my spending, but so far I’ve been able to take nice vacations ($10,000 a year, gotta enjoy life while I’m single and young haha) and haven’t dipped into my emergency fund so I guess that’s good.
I would just buy VT etf in taxable. I like to keep it simple.
36% (IRA) - Individual LT Corporate Bonds , 33%(taxable) - schy, 33%(taxable) - SCHD Dividend Growth
Topic Author
OutOfCollegeInvestor
Posts: 57
Joined: Fri Jul 03, 2020 3:26 pm

Re: How is my portfolio, and what stocks should I buy in my brokerage?

Post by OutOfCollegeInvestor »

JoeRetire wrote: Mon Jan 24, 2022 4:05 pm
OutOfCollegeInvestor wrote: Mon Jan 24, 2022 4:00 pmmy employer has horrible matching, I believe it’s 50% up to 6% of income.
That's not horrible.
Many employers provide no match at all.
My only dilemma is I’m not sure how much I should put in a brokerage vs general savings. I don’t like having too much cash getting eaten by inflation in a bank, only the bare minimum of emergency fund. I do want to buy a nice car within 2-3 years but plan on getting a loan even if I can buy cash. Just so I can invest more money. Or should I be holding some in cash?
As always, it depends.

You should have an emergency fund of at least 6 months expenses. And then you need to have funds available for the bigger purchases you want to make like a car or house down payment.

It's okay to "plan on getting a loan" but you realistically have no idea what the terms might be so far down the road. It may make sense to get a loan at that point, or it may not. Stay as flexible as you can.
Aren’t bigger purchases better in stocks since your money won’t grow? Like if I don’t plan on purchasing a home in 10 years and am flexible with timeline based on the market, is a bank account the best place?

I guess for a car it would be better in a bank since I plan on purchasing in a year or two
chassis
Posts: 2182
Joined: Tue Mar 24, 2020 4:28 pm

Re: How is my portfolio, and what stocks should I buy in my brokerage?

Post by chassis »

Watch the spending - you mention nice vacations and a nice car. And buying a house at a higher than average price point.

Living below your means is the best investment you can make.

For brokerage liquid holdings, SPY is reasonable if held for a couple of years. I like growth stocks (hammered now, it’s a time to buy). Any household tech name that is older than 10 years and is profitable today is probably a good stock.
Topic Author
OutOfCollegeInvestor
Posts: 57
Joined: Fri Jul 03, 2020 3:26 pm

Re: How is my portfolio, and what stocks should I buy in my brokerage?

Post by OutOfCollegeInvestor »

chassis wrote: Mon Jan 24, 2022 4:41 pm Watch the spending - you mention nice vacations and a nice car. And buying a house at a higher than average price point.

Living below your means is the best investment you can make.

For brokerage liquid holdings, SPY is reasonable if held for a couple of years. I like growth stocks (hammered now, it’s a time to buy). Any household tech name that is older than 10 years and is profitable today is probably a good stock.
It’s not higher than average. Cost of living is just expensive in WA. I think vacation is worth spending money on, gotta enjoy life, but the car I agree isn’t necessary.
Exchme
Posts: 1335
Joined: Sun Sep 06, 2020 3:00 pm

Re: How is my portfolio, and what stocks should I buy in my brokerage?

Post by Exchme »

chassis wrote: Mon Jan 24, 2022 4:41 pm Watch the spending - you mention nice vacations and a nice car. And buying a house at a higher than average price point.

Living below your means is the best investment you can make.

For brokerage liquid holdings, SPY is reasonable if held for a couple of years. I like growth stocks (hammered now, it’s a time to buy). Any household tech name that is older than 10 years and is profitable today is probably a good stock.
+1

OP's priority is to dial back spending expectations or there won't be enough money to invest meaningfully and financial independence will always be a long ways off.
drk
Posts: 3943
Joined: Mon Jul 24, 2017 10:33 pm

Re: How is my portfolio, and what stocks should I buy in my brokerage?

Post by drk »

OutOfCollegeInvestor wrote: Mon Jan 24, 2022 4:00 pm For the Roth IRA: VTWAX (0.10% expense ratio)
For the 401K: Vanguard Target Fund 2065 retirement with 0.065% expense ratio
For the brokerage: 60% VTI and 40% VXUS (although I heard I should just do 100% VTI since VXUS isn’t tax efficient? I still don’t understand tax efficiency I was just trying to mirror VTWAX in the brokerage).

I chose this because I didn’t want to monitor my 401k or Roth IRA. If 401k had VTWAX I would have chose that. I don’t want any bonds. So I’m probably like 93% equities and 7% bonds right now. I could change my 401k to do S&P 500 fund (FXAIX) and international fund (FSPSX or FDIKX) but I feel since target date fund is already there, there’s no point in managing. But maybe I’m wrong so hence why I’m asking.
All of these are great choices. At this point, your savings rate matters far more than your allocation. That 7% bond allocation won't really impact things either way.
OutOfCollegeInvestor wrote: Mon Jan 24, 2022 4:00 pm I also wasn’t sure how to invest the extra $1k I’m getting per month outside of Roth IRA and 401k. I wanted to have a savings outside of emergency fund but don’t want inflation to eat it up. This is long term savings (5+ years) and I don’t plan to liquidate it unless necessary. I was thinking since I’m already doing the safe thing of investing in index funds in retirement, I can chase better returns by investing 50% in MSFT and GOOG and tech stocks, and the other 50% into a 60/40 split of VTI and VXUS.
IMO, you should just do 100% into your desired allocation of VTI and VXUS. Spreading out into individual stocks will just invite tinkering and behavioral errors. Instead, focus on shoveling money into your long-term allocation.
OutOfCollegeInvestor wrote: Mon Jan 24, 2022 4:00 pm My only dilemma is I’m not sure how much I should put in a brokerage vs general savings. I don’t like having too much cash getting eaten by inflation in a bank, only the bare minimum of emergency fund. I do want to buy a nice car within 2-3 years but plan on getting a loan even if I can buy cash. Just so I can invest more money. Or should I be holding some in cash? Or safer investments? And what percentage?

Other goals: buy a home within 10 years (median home price here is $900,000 and I don’t want to move).
Over the next ten years, your income should increase to make it easier to put away cash when your home purchase is closer. I don't really know how to advise on the car because I haven't had the inclination for a nice car in a while. Most of my driving is into the mountains, which inevitably brings dirt and scratches. If you're sticking around Washington, maybe you'll come around to this line of thinking too.
OutOfCollegeInvestor wrote: Mon Jan 24, 2022 4:00 pm I’m very bad with money and don’t track my spending, but so far I’ve been able to take nice vacations ($10,000 a year, gotta enjoy life while I’m single and young haha) and haven’t dipped into my emergency fund so I guess that’s good.
Maybe the 50/30/20 budget would appeal to you. Maybe read Your Money or Your Life if you want to understand your spending.
A useful razor: anyone asking about speculative strategies on Bogleheads.org has no business using them.
drk
Posts: 3943
Joined: Mon Jul 24, 2017 10:33 pm

Re: How is my portfolio, and what stocks should I buy in my brokerage?

Post by drk »

chassis wrote: Mon Jan 24, 2022 4:41 pm For brokerage liquid holdings, SPY is reasonable if held for a couple of years.
FWIW, VOO is strictly superior to SPY for a retail buy-and-hold investor. They both track the S&P 500 so well that you might as well get the extra 6 bps by using the cheaper option.
A useful razor: anyone asking about speculative strategies on Bogleheads.org has no business using them.
User avatar
JoeRetire
Posts: 15381
Joined: Tue Jan 16, 2018 1:44 pm

Re: How is my portfolio, and what stocks should I buy in my brokerage?

Post by JoeRetire »

OutOfCollegeInvestor wrote: Mon Jan 24, 2022 4:27 pm Aren’t bigger purchases better in stocks since your money won’t grow? Like if I don’t plan on purchasing a home in 10 years and am flexible with timeline based on the market, is a bank account the best place?
If you can tolerate the risk and are willing to potentially wait longer, then investing the funds makes sense.
This isn't just my wallet. It's an organizer, a memory and an old friend.
Topic Author
OutOfCollegeInvestor
Posts: 57
Joined: Fri Jul 03, 2020 3:26 pm

Re: How is my portfolio, and what stocks should I buy in my brokerage?

Post by OutOfCollegeInvestor »

Exchme wrote: Mon Jan 24, 2022 5:22 pm
chassis wrote: Mon Jan 24, 2022 4:41 pm Watch the spending - you mention nice vacations and a nice car. And buying a house at a higher than average price point.

Living below your means is the best investment you can make.

For brokerage liquid holdings, SPY is reasonable if held for a couple of years. I like growth stocks (hammered now, it’s a time to buy). Any household tech name that is older than 10 years and is profitable today is probably a good stock.
+1

OP's priority is to dial back spending expectations or there won't be enough money to invest meaningfully and financial independence will always be a long ways off.
Hmm, even if I’m putting 25% of my income into retirement? I thought I was doing good with the financial independence part cause most people don’t max out their 401k.

I am trying to spend less on vacations (this year I don’t even have a choice until COVID cases go down) but I do have a goal of traveling internationally 2x a year because it makes me happy. I plan on doing hostels so that lodging is cheap once COVID cases aren’t high. Also signing up for credit cards for free hotels and flights (last year I redeemed a round trip business class ticket with my credit card points).

I haven’t spent anything on cars and still drive a 2008 Chevy Impala which was handed down by my parents.

I guess I could just travel internationally 1x a year but I feel I should really enjoy life right now.
Exchme
Posts: 1335
Joined: Sun Sep 06, 2020 3:00 pm

Re: How is my portfolio, and what stocks should I buy in my brokerage?

Post by Exchme »

OutOfCollegeInvestor wrote: Mon Jan 24, 2022 6:13 pm I feel I should really enjoy life right now.
Speaking as a geezer, "future you" wants "current you" to enjoy life, but at reasonable cost so that "future you" has lots of options.
Topic Author
OutOfCollegeInvestor
Posts: 57
Joined: Fri Jul 03, 2020 3:26 pm

Re: How is my portfolio, and what stocks should I buy in my brokerage?

Post by OutOfCollegeInvestor »

Exchme wrote: Mon Jan 24, 2022 7:28 pm
OutOfCollegeInvestor wrote: Mon Jan 24, 2022 6:13 pm I feel I should really enjoy life right now.
Speaking as a geezer, "future you" wants "current you" to enjoy life, but at reasonable cost so that "future you" has lots of options.
Yeah that’s why I’ve been maxing out my 401k and Roth. Although I guess I could save more outside of that!
Topic Author
OutOfCollegeInvestor
Posts: 57
Joined: Fri Jul 03, 2020 3:26 pm

Re: How is my portfolio, and what stocks should I buy in my brokerage?

Post by OutOfCollegeInvestor »

chassis wrote: Mon Jan 24, 2022 4:41 pm
For brokerage liquid holdings, SPY is reasonable if held for a couple of years. I like growth stocks (hammered now, it’s a time to buy). Any household tech name that is older than 10 years and is profitable today is probably a good stock.
So in terms of growth stocks I was thinking MSFT, GOOG, AAPL, split 3 ways. The other 50% a mix of VTI and VXUS. Is that a good way to invest?
Exchme
Posts: 1335
Joined: Sun Sep 06, 2020 3:00 pm

Re: How is my portfolio, and what stocks should I buy in my brokerage?

Post by Exchme »

OutOfCollegeInvestor wrote: Tue Jan 25, 2022 4:11 am So in terms of growth stocks I was thinking MSFT, GOOG, AAPL, split 3 ways. The other 50% a mix of VTI and VXUS. Is that a good way to invest?
No one can tell you specifically what will work, but this is Bogleheads where the accumulated wisdom is that the free lunch in investing is diversification, not individual stocks.

While these are great companies, everyone already knows that so it is baked into their price. Those prices are set by the savviest, most aggressive armies of PhDs in finance with decades of experience in securities analysis, fitted out with supercomputers, ready to battle you to find mis-priced stocks. When you buy an individual stock, you are stepping into the cage with them to try to beat them at their game. When you buy the total market like VTI and VXUS, you are getting the price the pros set and letting them fight each other.
Post Reply