Check out this Portfolio Allocation! Is it too crazy? Thanks!

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Padawan Investor
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Joined: Sat Jan 06, 2018 1:25 pm

Check out this Portfolio Allocation! Is it too crazy? Thanks!

Post by Padawan Investor »

Hi, Thanks for your input!

I'm 33 and going to transfer into a Vanguard Roth IRA and an additional brokerage investment account. I have 22,000 to transfer into my IRA and 10,000-15,000 to start a brokerage account. Both are intended to be 25-30+ year investments, I can contribute at least 10-15,000 each year between the two. I don't mind each month rebalancing my account.

I've come up with an allocation I like and I think works. It looks a little complicated, but I like where it overlaps, who it targets, and I'm a little bond heavy to be safe. Once you balance them out they are around 85-15 stocks and bonds, with the VFIFX transitioning towards more bonds over time.

Any comments would be super appreciated! Thank you!!!

Roth IRA
50% VFIFX Target Retirement Plan (S/B = 90/10)
27% VFINX S&P 500
13% VWELX Wellington (S/B = 65/35)
10% VGSTX STAR (S/B= 60/40)

Brokerage
30% VWINX Wellesley (S/B = 40/60)
20% VIG Appreciation Dividend
20% VYM High Dividend
20% VUG Growth
10% IVOO Mid Cap

-What do you think?
-Which funds would be better under the "tax protection" of the Roth IRA?
-Am I correct that MF in the IRA are better than ETFs for my Roth IRA?
-Should one of these get more allocation love than others?


Thank you!
dbr
Posts: 46181
Joined: Sun Mar 04, 2007 8:50 am

Re: Check out this Portfolio Allocation! Is it too crazy? Thanks!

Post by dbr »

Why are you picking such a rag-bag of different funds?

I would recommend starting with a three fund portfolio of Total US and International with Total Bond then located according to tax efficiency. In particular mixing up a bunch of stock/bond blend funds with some selection of stock funds seems to have no rhyme or reason.

You should have a basic plan for asset allocation between stocks and bonds and depart from total market indices only for a well understood reason.

Are you able to explain to a disinterested bystander why each of those funds has been chosen?

If you are holding accounts at Vanguard there is no real difference between funds and ETFs except that you need a little more eventually invested to get to Admiral class of the funds. A lot of people like to be more aggressive in a Roth because the gain is tax exempt. I would not "love" any funds more than any others.

It could be doing some study by going to "getting started" will help: https://www.bogleheads.org/wiki/Getting_started
aristotelian
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Joined: Wed Jan 11, 2017 7:05 pm

Re: Check out this Portfolio Allocation! Is it too crazy? Thanks!

Post by aristotelian »

S&P would be better in taxable. Wellesley would be better in Roth. Having both Wellesley and Wellington will make it harder to track your bond allocation. All of your funds are perfectly fine but all together I don't see what the strategy is. Keep in mind that the more funds you have, the more your choices cancel one another out. A simpler approach would be target retirement and Wellesley in Roth and S&P in taxable.
Yossarian
Posts: 141
Joined: Thu May 31, 2007 6:19 pm

Re: Check out this Portfolio Allocation! Is it too crazy? Thanks!

Post by Yossarian »

Needlessly complicated. No one needs 9 funds.
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BL
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Joined: Sun Mar 01, 2009 1:28 pm

Re: Check out this Portfolio Allocation! Is it too crazy? Thanks!

Post by BL »

https://www.etf.com/docs/IfYouCan.pdf
is a great little pdf to get you started. Also do some reading in Wiki and recommended books.

A single balanced fund alone might be fine, except not ideal in taxable. The 3-funds in booklet are perfect.
Artisan
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Joined: Sat Oct 01, 2016 8:30 am

Re: Check out this Portfolio Allocation! Is it too crazy? Thanks!

Post by Artisan »

Agreed. The enemy of a good plan is the dream of a perfect plan.

3 Fund Portfolio, Total Stock, Total International Stock and Total Bond.

If you don't want international leave it out and go two fund.

If you want more "safety" increase the bond allocation.

Simple and it works.
Last edited by Artisan on Sat Jan 06, 2018 3:15 pm, edited 1 time in total.
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jhfenton
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Location: Ohio

Re: Check out this Portfolio Allocation! Is it too crazy? Thanks!

Post by jhfenton »

I'm all for slicing and dicing, but there needs to be a logic to it. Discrete slices. LIttle or no overlap. Each piece serving a purpose.

There's not a single one of those funds that I'd own, let alone in that combination. I wouldn't have Wellesley or a high dividend fund in taxable. I wouldn't have four separate hybrid funds, three of them in the same account.
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Taylor Larimore
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Joined: Tue Feb 27, 2007 7:09 pm
Location: Miami FL

Re: Check out this Portfolio Allocation! Is it too crazy? Thanks!

Post by Taylor Larimore »

Padawan Investor:

Welcome to the Bogleheads Forum!

I think you will be pleased with the simplicity and many advantages of The Three-Fund Portfolio.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
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