Portfolio Review (age 28)

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Topic Author
ditb
Posts: 18
Joined: Fri Mar 08, 2019 2:26 pm

Portfolio Review (age 28)

Post by ditb »

Previous Portfolio Reviews: viewtopic.php?p=4680893#p4680893 viewtopic.php?p=5949880#p5949880

Emergency funds: yes

Debt: $17,000 at 1.90%

Tax Filing Status: Single,

Tax Rate: 24% Federal, 3.15% State

State of Residence: IN

Age: 28

Desired Asset allocation: 100% stocks / 0% bonds
Desired International allocation: 20% of stocks

Please provide an approximate size of your total portfolio (as in 50K, 700k, 1.4M, etc.) or as (high four-figures, mid five-figures, low six-figures, etc.). $370k

Show us your current portfolio including all investment and retirement accounts (yourself and spouse or civil partner, if applicable) as it's important to look at the portfolio as a unified whole rather than look at accounts in isolation. Also include the available funds in your employer provided retirement plans.

Show each fund or holding as a percentage of the entire portfolio, not as a percentage of the account that holding is in. If this instruction is not clear, see the example under the Key Points section below. For example:

Current retirement assets

Taxable at Vanguard
E-Fund- Vanguard Cash Reserves Federal Money Market Fund Admiral Shares (VMRXX) (0.100%)
19% Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) (0.110%)
25% Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (0.040%)

My 401k at Fidelity
35% Fidelity® 500 Index Fund (FXAIX) (0.015%)
5% Fidelity® Extended Market Index Fund (FSMAX) (0.035%)

6% total Company Match

My Roth IRA at Vanguard
5% Vanguard Extended Market Index Fund Admiral Shares (VEXAX) (0.06%)
7% Vanguard 500 Index Fund Admiral Shares (VFIAX) (0.040%)

My HSA at Optum
2% Vanguard Total Stock Market Inst (VITSX) (0.030%)


Contributions

New annual Contributions
$34000 his 401k (My contributions all into pre-tax, employer contributions, automatic roth in plan conversion once 401k contribution limits are hit).
$6,0006,500 his Roth IRA
$3,850 HSA
~30,000 taxable (nothing scheduled just once or so a month )

Available funds

Funds available in his 401(k)
BNY Mellon Small Cap Value Fund;Y BOSYX 0.99%
DFA US Large Cap Value Portfolio;Institutional DFLVX 0.21%
Fidelity 500 Index Fund FXAIX 0.02%
Fidelity Freedom 2060 Fund;K FNSFX 0.64%
Fidelity Freedom 2050 Fund;K FNSBX 0.64%
Fidelity Freedom 2055 Fund;K FNSDX 0.64%
Fidelity Freedom 2045 Fund;K FSNZX 0.64%
Fidelity Freedom 2065 Fund;K FFSDX 0.64%
Fidelity Freedom 2040 Fund;K FSNVX 0.64%
Fidelity Extended Market Index Fund FSMAX 0.03%
T Rowe Price Institutional Small-Cap Stock Fund TRSSX 0.66%
Fidelity Freedom 2035 Fund;K FSNUX 0.61%
Vanguard Total International Stock Index Fund;Inst VTSNX 0.08%
American Funds EuroPacific Growth Fund;R6 RERGX 0.46%
Fidelity Freedom 2030 Fund;K FSNQX 0.58%
Fidelity Freedom 2025 Fund;K FSNPX 0.55%
Fidelity Freedom 2020 Fund;K FSNOX 0.51%
Fidelity Freedom 2015 Fund;K FSNLX 0.48%
Fidelity Freedom 2010 Fund;K FSNKX 0.44%
Fidelity Freedom 2005 Fund;K FSNJX 0.41%
Sprott Focus Trust (XNAS:FUND) FUND 1.14%
Fidelity Freedom Income Fund;K FNSHX 0.41%
Vanguard Inflation-Protected Securities Fund;Admrl VAIPX 0.10%
MetWest Total Return Bond Fund;Plan MWTSX 0.36%
Fidelity US Bond Index Fund FXNAX 0.02%

Funds available in my HSA
Allspring Discovery SMID Cap Growth Fund;R6 0.78% WFDRX
Allspring Special Global Small Cap Fund;I 1.15% EKGIX
Allspring Growth Balanced Fund;Adm 0.86% NVGBX
Allspring Growth Fund;R6 0.70% SGRHX
Allspring Moderate Balanced Fund;Institutional 0.72% WFMYX
American Funds Capital World Gro & Inc Fd;R6 0.42% RWIGX
BlackRock Equity Dividend Fund;K 0.57% MKDVX
Delaware Small Cap Value Fund;R6 0.70% DVZRX
Dodge & Cox Income Fund;I 0.41% DODIX
Fidelity Low-Priced Stock Fund 0.82% FLPSX
Invesco Discovery Fund;R6 0.65% ODIIX
Lord Abbett High Yield Fund;F3 0.60% LHYOX
Schwab Target 2020 Index Fund 0.03% SWYLX
Schwab Target 2030 Index Fund 0.04% SWYEX
Schwab Target 2040 Index Fund 0.04% SWYGX
Schwab Target 2050 Index Fund 0.03% SWYMX
Schwab Target 2060 Index Fund 0.03% SWYNX
T Rowe Price Blue Chip Growth Fund;I 0.57% TBCIX
Vanguard 500 Index Fund;Admiral 0.04% VFIAX
Vanguard Emerging Markets Stock Index Fund;Admiral 0.14% VEMAX
Vanguard Equity Income Fund;Admiral 0.19% VEIRX
Vanguard Extended Market Index Fund;Institutional 0.05% VIEIX
Vanguard Global Equity Fund;Investor 0.41% VHGEX
Vanguard Inflation-Protected Securities Fund;Inst 0.07% VIPIX
Vanguard LifeStrategy Growth Fund;Investor 0.00% VASGX
Vanguard LifeStrategy Conservative Growth Fund;Inv 0.00% VSCGX
Vanguard LifeStrategy Moderate Growth Fund;Inv 0.00% VSMGX
Vanguard Mid-Cap Index Fund;Institutional 0.04% VMCIX
Vanguard Real Estate Index Fund;Institutional 0.10% VGSNX
Vanguard Short-Term Federal Fund;Admiral 0.10% VSGDX
Vanguard Short-Term Investment-Grade Fund;Inst 0.07% VFSIX
Vanguard Small-Cap Index Fund;Institutional 0.04% VSCIX
Vanguard Total Bond Market Index Fund;Inst 0.04% VBTIX
Vanguard Total Stock Market Index Fund;Inst 0.03% VITSX
Vanguard Treasury Money Market Fund;Investor 0.08% VUSXX
Vanguard Wellington Fund;Admiral 0.17% VWENX

Questions:

1. Is VMRXX a suitable fund to contain my emergency fund?
2. Are my investment choices in the HSA and 401k appropriate?
3. Should I incorporate bonds?
4. Any advice general or specific is appreciated

Thanks,

DITB.
Last edited by ditb on Fri May 26, 2023 12:40 pm, edited 1 time in total.
Triple digit golfer
Posts: 10430
Joined: Mon May 18, 2009 5:57 pm

Re: Portfolio Review (age 28)

Post by Triple digit golfer »

1. Yes.
2. Yes.
3. No one can answer that for you. It depends on your willingness, need, and ability to take risk.
4. The IRA limit is $6,500 this year, so make sure you don't miss that extra $500. You have a very simple portfolio of broad market index funds. I personally may consider holding the international equities in a tax-sheltered account and holding all U.S. in taxable, but that's really not something we can know in advance. You'd be foregoing the foreign tax credit, but you'd also be putting the international fund, with its higher dividend yield, into the tax-sheltered accounts. Ultimately I think your portfolio is just fine as is. With your solid start and savings rate, you are on a tremendous track. Stay the course, stay focused, and you will end up in a great place.
Topic Author
ditb
Posts: 18
Joined: Fri Mar 08, 2019 2:26 pm

Re: Portfolio Review (age 28)

Post by ditb »

Triple digit golfer wrote: Fri May 26, 2023 12:31 pm 1. Yes.
2. Yes.
3. No one can answer that for you. It depends on your willingness, need, and ability to take risk.
4. The IRA limit is $6,500 this year, so make sure you don't miss that extra $500. You have a very simple portfolio of broad market index funds. I personally may consider holding the international equities in a tax-sheltered account and holding all U.S. in taxable, but that's really not something we can know in advance. You'd be foregoing the foreign tax credit, but you'd also be putting the international fund, with its higher dividend yield, into the tax-sheltered accounts. Ultimately I think your portfolio is just fine as is. With your solid start and savings rate, you are on a tremendous track. Stay the course, stay focused, and you will end up in a great place.
Thank you for the response. :sharebeer

The 6,000 was a typo I actually have already contributed 6,500.

Putting the international fund into a tax advantaged account is interesting, I will need to research that topic more.
Triple digit golfer
Posts: 10430
Joined: Mon May 18, 2009 5:57 pm

Re: Portfolio Review (age 28)

Post by Triple digit golfer »

ditb wrote: Fri May 26, 2023 12:43 pm
Triple digit golfer wrote: Fri May 26, 2023 12:31 pm 1. Yes.
2. Yes.
3. No one can answer that for you. It depends on your willingness, need, and ability to take risk.
4. The IRA limit is $6,500 this year, so make sure you don't miss that extra $500. You have a very simple portfolio of broad market index funds. I personally may consider holding the international equities in a tax-sheltered account and holding all U.S. in taxable, but that's really not something we can know in advance. You'd be foregoing the foreign tax credit, but you'd also be putting the international fund, with its higher dividend yield, into the tax-sheltered accounts. Ultimately I think your portfolio is just fine as is. With your solid start and savings rate, you are on a tremendous track. Stay the course, stay focused, and you will end up in a great place.
Thank you for the response. :sharebeer

The 6,000 was a typo I actually have already contributed 6,500.

Putting the international fund into a tax advantaged account is interesting, I will need to research that topic more.
Honestly, I probably wouldn't worry about it. There is always discussion about when an investor has a taxable account, whether to hold U.S. or international equities there. Sometimes U.S. is better, sometimes international is better. All in all, I doubt it'll matter much. Stay your course. You're doing great.
jumbo shrimp
Posts: 102
Joined: Wed Apr 12, 2023 3:43 pm

Re: Portfolio Review (age 28)

Post by jumbo shrimp »

I saw your previous two posts you linked. If you would like to share, what did you go into debt for with this post? Are you able to pay that off now?
Topic Author
ditb
Posts: 18
Joined: Fri Mar 08, 2019 2:26 pm

Re: Portfolio Review (age 28)

Post by ditb »

Triple digit golfer wrote: Fri May 26, 2023 1:45 pm
ditb wrote: Fri May 26, 2023 12:43 pm
Triple digit golfer wrote: Fri May 26, 2023 12:31 pm 1. Yes.
2. Yes.
3. No one can answer that for you. It depends on your willingness, need, and ability to take risk.
4. The IRA limit is $6,500 this year, so make sure you don't miss that extra $500. You have a very simple portfolio of broad market index funds. I personally may consider holding the international equities in a tax-sheltered account and holding all U.S. in taxable, but that's really not something we can know in advance. You'd be foregoing the foreign tax credit, but you'd also be putting the international fund, with its higher dividend yield, into the tax-sheltered accounts. Ultimately I think your portfolio is just fine as is. With your solid start and savings rate, you are on a tremendous track. Stay the course, stay focused, and you will end up in a great place.
Thank you for the response. :sharebeer

The 6,000 was a typo I actually have already contributed 6,500.

Putting the international fund into a tax advantaged account is interesting, I will need to research that topic more.
Honestly, I probably wouldn't worry about it. There is always discussion about when an investor has a taxable account, whether to hold U.S. or international equities there. Sometimes U.S. is better, sometimes international is better. All in all, I doubt it'll matter much. Stay your course. You're doing great.
:beer





jumbo shrimp wrote: Fri May 26, 2023 1:54 pm I saw your previous two posts you linked. If you would like to share, what did you go into debt for with this post? Are you able to pay that off now?
Thank you for the question,

I bought a new car (Subaru) last year. I could pay it off if I sell from my taxable account or save up paychecks, but I don't see a giant need to because the debt is at 1.90%.
gotoparks
Posts: 1119
Joined: Sat Jan 28, 2023 9:19 am

Re: Portfolio Review (age 28)

Post by gotoparks »

Your portfolio looks good. Your car loan has a low interest rate so I would keep it as is. I'm more aggressive so I don't think a person should hold many bonds until 50 or so.
Outer Marker
Posts: 4360
Joined: Sun Mar 08, 2009 8:01 am

Re: Portfolio Review (age 28)

Post by Outer Marker »

For simplicity, I wouldn't bother with the completion funds in your 401K and IRA. The S&P 500 is so close to Total Market that the difference can hardly be seen with the naked eye. Consider using Total Market in your IRA which captures everything. I favor Total Market, but won't go out of my way to "complete" the index vs. S&P.
User avatar
GMCZ71
Posts: 559
Joined: Sat Oct 13, 2018 8:05 am
Location: McMinnville, Or

Re: Portfolio Review (age 28)

Post by GMCZ71 »

ditb wrote: Fri May 26, 2023 12:24 pm
Age: 28

Desired Asset allocation: 100% stocks / 0% bonds
Desired International allocation: 20% of stocks

Please provide an approximate size of your total portfolio $370k
Questions:

1. Is VMRXX a suitable fund to contain my emergency fund?
2. Are my investment choices in the HSA and 401k appropriate?
3. Should I incorporate bonds?
4. Any advice general or specific is appreciated

Thanks,

DITB.
Should you have bonds, to me its a flip of a coin. You are young and should be able to handle market drop with out selling. But if you think about the math when market is at the lows:
If you go 100/0 for AA only each paycheck is buying low.
If your 90/10 your paycheck is buying low priced and rebalancing buys a larger chunk of equities at the lows.
John | * Friends and family and money | * What you recommend will have periods of underperformance. You will be blamed. | * You avoid the suspicion of "self-serving." by Taylor Larimore
Topic Author
ditb
Posts: 18
Joined: Fri Mar 08, 2019 2:26 pm

Re: Portfolio Review (age 28)

Post by ditb »

Outer Marker wrote: Sat May 27, 2023 8:17 am For simplicity, I wouldn't bother with the completion funds in your 401K and IRA. The S&P 500 is so close to Total Market that the difference can hardly be seen with the naked eye. Consider using Total Market in your IRA which captures everything. I favor Total Market, but won't go out of my way to "complete" the index vs. S&P.
Thank you for the response,

I choose those funds in the ira to avoid the possibility of triggering a wash rule. ( not that I sell often I try to buy and hold)

For the 401k I wasn't happy with my Total Market funds so that is why I broke into extended and 500.

For the non total Market us funds, I try to keep it 80 extended sp500 and 20 percent extended.
GMCZ71 wrote: Sat May 27, 2023 8:52 am
ditb wrote: Fri May 26, 2023 12:24 pm
Age: 28

Desired Asset allocation: 100% stocks / 0% bonds
Desired International allocation: 20% of stocks

Please provide an approximate size of your total portfolio $370k
Questions:

1. Is VMRXX a suitable fund to contain my emergency fund?
2. Are my investment choices in the HSA and 401k appropriate?
3. Should I incorporate bonds?
4. Any advice general or specific is appreciated

Thanks,

DITB.
Should you have bonds, to me its a flip of a coin. You are young and should be able to handle market drop with out selling. But if you think about the math when market is at the lows:
If you go 100/0 for AA only each paycheck is buying low.
If your 90/10 your paycheck is buying low priced and rebalancing buys a larger chunk of equities at the lows.
Thank you, I'm leaning toward not included bonds. I don't think I have the correct foresight to rebalance at opportune times, seems like Market timing which is hard/mythical.
User avatar
GMCZ71
Posts: 559
Joined: Sat Oct 13, 2018 8:05 am
Location: McMinnville, Or

Re: Portfolio Review (age 28)

Post by GMCZ71 »

ditb wrote: Sat May 27, 2023 2:36 pm

GMCZ71 wrote: Sat May 27, 2023 8:52 am
ditb wrote: Fri May 26, 2023 12:24 pm
Age: 28

Desired Asset allocation: 100% stocks / 0% bonds
Desired International allocation: 20% of stocks


DITB.
Should you have bonds, to me its a flip of a coin. You are young and should be able to handle market drop with out selling. But if you think about the math when market is at the lows:
If you go 100/0 for AA only each paycheck is buying low.
If your 90/10 your paycheck is buying low priced and rebalancing buys a larger chunk of equities at the lows.
Thank you, I'm leaning toward not included bonds. I don't think I have the correct foresight to rebalance at opportune times, seems like Market timing which is hard/mythical.
Its not hard or mythical its math and not exciting, I have seen some complain they are bored.
Look at a chart of VTSAX for 5 to 10 years the price range is $40-$120 per share. You bought each paycheck so your average cost per share is high and no rebalancing being 100/0.
Say you are 90/10 instead when the market drops but the bonds stay about the same your not 90/10 any more. It takes about a 10% drop for this to happen. So now you exchange some bond/mm into VTSAX to get back to 90/10, average cost per share is lower then 1st example. Now from this 10% drop does the market keep going down or go up 15%? Nobody knows but the math will have you exchange some VTSAX to bond or bond to VTSAX.

Looking at the chart wouldn't it be nice to have bought in the valley's and sell at the peaks? The math will make small portions of this happen, not the very bottom or very top. I am not saying you should change, just showing so you know later in life how the math works. The biggest threat to :moneybag is you selling at the bottom.
John | * Friends and family and money | * What you recommend will have periods of underperformance. You will be blamed. | * You avoid the suspicion of "self-serving." by Taylor Larimore
Topic Author
ditb
Posts: 18
Joined: Fri Mar 08, 2019 2:26 pm

Re: Portfolio Review (age 28)

Post by ditb »

GMCZ71 wrote: Sun May 28, 2023 8:12 am
ditb wrote: Sat May 27, 2023 2:36 pm

GMCZ71 wrote: Sat May 27, 2023 8:52 am
ditb wrote: Fri May 26, 2023 12:24 pm
Age: 28

Desired Asset allocation: 100% stocks / 0% bonds
Desired International allocation: 20% of stocks


DITB.
Should you have bonds, to me its a flip of a coin. You are young and should be able to handle market drop with out selling. But if you think about the math when market is at the lows:
If you go 100/0 for AA only each paycheck is buying low.
If your 90/10 your paycheck is buying low priced and rebalancing buys a larger chunk of equities at the lows.
Thank you, I'm leaning toward not included bonds. I don't think I have the correct foresight to rebalance at opportune times, seems like Market timing which is hard/mythical.
Its not hard or mythical its math and not exciting, I have seen some complain they are bored.
Look at a chart of VTSAX for 5 to 10 years the price range is $40-$120 per share. You bought each paycheck so your average cost per share is high and no rebalancing being 100/0.
Say you are 90/10 instead when the market drops but the bonds stay about the same your not 90/10 any more. It takes about a 10% drop for this to happen. So now you exchange some bond/mm into VTSAX to get back to 90/10, average cost per share is lower then 1st example. Now from this 10% drop does the market keep going down or go up 15%? Nobody knows but the math will have you exchange some VTSAX to bond or bond to VTSAX.

Looking at the chart wouldn't it be nice to have bought in the valley's and sell at the peaks? The math will make small portions of this happen, not the very bottom or very top. I am not saying you should change, just showing so you know later in life how the math works. The biggest threat to :moneybag is you selling at the bottom.
Interesting, I'll have to do some research. Thank you for opening up my eyes.
NYCaviator
Posts: 1924
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Location: NYC

Re: Portfolio Review (age 28)

Post by NYCaviator »

ditb wrote: Fri May 26, 2023 12:24 pm
Desired Asset allocation: 100% stocks / 0% bonds
Desired International allocation: 20% of stocks
The idea behind holding international is that you don't know if ex-US or US is going to perform better in the future so you want to hold both. Doing so provides diversification. If you were to "buy the market," ex-US should be somewhere around 40% of your overall equities. I think (and someone correct me if I am wrong) that 20% isn't near enough to provide you with any real diversification benefits if at some point ex-US outperforms US. Your allocation to ex-US would need to be greater. Food for thought, unless there is a specific reason you are tilting towards US equities from a true market-weight portfolio.
User avatar
dogagility
Posts: 3201
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Re: Portfolio Review (age 28)

Post by dogagility »

ditb wrote: Fri May 26, 2023 12:24 pm My HSA at Optum
2% Vanguard Total Stock Market Inst (VITSX) (0.030%)

4. Any advice general or specific is appreciated
Since you are investing 30K/year in taxable, I assume you have sufficient funds to pay any current medical expenses out of pocket rather than using money in your HSA. This would be a good idea since the HSA is very tax-advantaged, and you probably should consider this account as part of your retirement portfolio.
Make sure you check out my list of certifications. The list is short, and there aren't any. - Eric 0. from SMA
steadyosmosis
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Joined: Mon Dec 26, 2022 11:45 am

Re: Portfolio Review (age 28)

Post by steadyosmosis »

GMCZ71 wrote: Sun May 28, 2023 8:12 am
ditb wrote: Sat May 27, 2023 2:36 pm

GMCZ71 wrote: Sat May 27, 2023 8:52 am
ditb wrote: Fri May 26, 2023 12:24 pm
Age: 28

Desired Asset allocation: 100% stocks / 0% bonds
Desired International allocation: 20% of stocks


DITB.
Should you have bonds, to me its a flip of a coin. You are young and should be able to handle market drop with out selling. But if you think about the math when market is at the lows:
If you go 100/0 for AA only each paycheck is buying low.
If your 90/10 your paycheck is buying low priced and rebalancing buys a larger chunk of equities at the lows.
Thank you, I'm leaning toward not included bonds. I don't think I have the correct foresight to rebalance at opportune times, seems like Market timing which is hard/mythical.
Its not hard or mythical its math and not exciting, I have seen some complain they are bored.
Look at a chart of VTSAX for 5 to 10 years the price range is $40-$120 per share. You bought each paycheck so your average cost per share is high and no rebalancing being 100/0.
Say you are 90/10 instead when the market drops but the bonds stay about the same your not 90/10 any more. It takes about a 10% drop for this to happen. So now you exchange some bond/mm into VTSAX to get back to 90/10, average cost per share is lower then 1st example. Now from this 10% drop does the market keep going down or go up 15%? Nobody knows but the math will have you exchange some VTSAX to bond or bond to VTSAX.

Looking at the chart wouldn't it be nice to have bought in the valley's and sell at the peaks? The math will make small portions of this happen, not the very bottom or very top. I am not saying you should change, just showing so you know later in life how the math works. The biggest threat to :moneybag is you selling at the bottom.
Agree.
One of my chief regrets in the 2008-2009 market drop was that I didn't have more dollars with which to buy stocks cheap.
That was because my bond allocation was a low percentage, and I quickly used it up buying stocks as stock prices fell over time (AA went to ~100/0).
Well, stocks continued to fall, but I had no more dollars available to buy with. Frustrating.
To remedy that from then forward, I adopted Ben Graham's recommendation of keeping my AA between 75/25 and 25/75.
Now at ~60/40, whenever my AA gets 'unbalanced' (or stocks have a significant drop), I have more dollars to shift in whichever direction necessary (bonds to stocks, or stocks to bonds) in re-balancing.
Yes, it's a bit of market timing (over-re-balancing), but it works for me.
Age < 59.5. Early-retired. AA ~55/45. Taxable account and Roth IRA and HSA ... all 100% equities. 100% fixed income in tax-deferred. I spend from taxable and re-balance in tax-deferred.
Topic Author
ditb
Posts: 18
Joined: Fri Mar 08, 2019 2:26 pm

Re: Portfolio Review (age 28)

Post by ditb »

NYCaviator wrote: Sun May 28, 2023 2:17 pm
ditb wrote: Fri May 26, 2023 12:24 pm
Desired Asset allocation: 100% stocks / 0% bonds
Desired International allocation: 20% of stocks
The idea behind holding international is that you don't know if ex-US or US is going to perform better in the future so you want to hold both. Doing so provides diversification. If you were to "buy the market," ex-US should be somewhere around 40% of your overall equities. I think (and someone correct me if I am wrong) that 20% isn't near enough to provide you with any real diversification benefits if at some point ex-US outperforms US. Your allocation to ex-US would need to be greater. Food for thought, unless there is a specific reason you are tilting towards US equities from a true market-weight portfolio.

Good point, I will have to consider this, thanks.
dogagility wrote: Mon May 29, 2023 6:57 am
ditb wrote: Fri May 26, 2023 12:24 pm My HSA at Optum
2% Vanguard Total Stock Market Inst (VITSX) (0.030%)

4. Any advice general or specific is appreciated
Since you are investing 30K/year in taxable, I assume you have sufficient funds to pay any current medical expenses out of pocket rather than using money in your HSA. This would be a good idea since the HSA is very tax-advantaged, and you probably should consider this account as part of your retirement portfolio.
That is correct, thank you for the advise.
steadyosmosis wrote: Mon May 29, 2023 8:59 am
GMCZ71 wrote: Sun May 28, 2023 8:12 am
ditb wrote: Sat May 27, 2023 2:36 pm

GMCZ71 wrote: Sat May 27, 2023 8:52 am
ditb wrote: Fri May 26, 2023 12:24 pm
Age: 28

Desired Asset allocation: 100% stocks / 0% bonds
Desired International allocation: 20% of stocks


DITB.
Should you have bonds, to me its a flip of a coin. You are young and should be able to handle market drop with out selling. But if you think about the math when market is at the lows:
If you go 100/0 for AA only each paycheck is buying low.
If your 90/10 your paycheck is buying low priced and rebalancing buys a larger chunk of equities at the lows.
Thank you, I'm leaning toward not included bonds. I don't think I have the correct foresight to rebalance at opportune times, seems like Market timing which is hard/mythical.
Its not hard or mythical its math and not exciting, I have seen some complain they are bored.
Look at a chart of VTSAX for 5 to 10 years the price range is $40-$120 per share. You bought each paycheck so your average cost per share is high and no rebalancing being 100/0.
Say you are 90/10 instead when the market drops but the bonds stay about the same your not 90/10 any more. It takes about a 10% drop for this to happen. So now you exchange some bond/mm into VTSAX to get back to 90/10, average cost per share is lower then 1st example. Now from this 10% drop does the market keep going down or go up 15%? Nobody knows but the math will have you exchange some VTSAX to bond or bond to VTSAX.

Looking at the chart wouldn't it be nice to have bought in the valley's and sell at the peaks? The math will make small portions of this happen, not the very bottom or very top. I am not saying you should change, just showing so you know later in life how the math works. The biggest threat to :moneybag is you selling at the bottom.
Agree.
One of my chief regrets in the 2008-2009 market drop was that I didn't have more dollars with which to buy stocks cheap.
That was because my bond allocation was a low percentage, and I quickly used it up buying stocks as stock prices fell over time (AA went to ~100/0).
Well, stocks continued to fall, but I had no more dollars available to buy with. Frustrating.
To remedy that from then forward, I adopted Ben Graham's recommendation of keeping my AA between 75/25 and 25/75.
Now at ~60/40, whenever my AA gets 'unbalanced' (or stocks have a significant drop), I have more dollars to shift in whichever direction necessary (bonds to stocks, or stocks to bonds) in re-balancing.
Yes, it's a bit of market timing (over-re-balancing), but it works for me.

Thank you for the experience, I'll have to look into it.
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