Would like to simplify my portfolio. Any thoughts?

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mjuszczak
Posts: 33
Joined: Tue Jan 30, 2018 8:23 am

Would like to simplify my portfolio. Any thoughts?

Post by mjuszczak » Sat May 19, 2018 5:05 pm

Goal: Diversified portfolio built from Schwab ETFs with a slight lean toward small cap value.
Age: 35
Risk Tolerance: Aggressive

Current breakdown:

SCHB Us Broad Market ETF, 46.9%
SLYV SPDR S&P 600 Small Cap ETF, 15.23%
SCHF, Schwab International ETF, 14.95%
SCHH, Schwab REIT ETF, 10.06%
SCHE, Schwab Emerging Markets ETF, 5%
SCHC, Schwab International Small Cap ETF, 4.83%
SCHZ, Schwab US Aggregate Bond ETF, 1.92%
BWZ, SPDR Bloomberg & Barclay SH TM INTL ETF, .73%

Reason for the small positions at the bottom is that I initially built this using Personal Capital and it recommended a small (1-2%) interest in Bonds & Treasuries. Any simplification recommendations would be appreciated!

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indexfundfan
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Re: Would like to simplify my portfolio. Any thoughts?

Post by indexfundfan » Sat May 19, 2018 5:34 pm

I suggest to just keep SCHB, SLYV, SCHF, SCHE & SCHZ.

I got out of international small caps many years ago after finding that it is not as liquid as the other asset classes and harder to TLH. The situation could have improved now but I much prefer the simplicity now.
My signature has been deleted.

mjuszczak
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Re: Would like to simplify my portfolio. Any thoughts?

Post by mjuszczak » Sat May 19, 2018 5:36 pm

Interesting points. As someone who is 35, do you think skipping SCHZ entirely too would be a mistake? I'd like to remain aggressive for a few more years at minimum....

What percentage do you have between SCHB, SLYV, SCHF, SCHE & SCHZ if I want a small cap value tilt?

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Sandtrap
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Re: Would like to simplify my portfolio. Any thoughts?

Post by Sandtrap » Sat May 19, 2018 5:45 pm

mjuszczak wrote:
Sat May 19, 2018 5:05 pm
Goal: Diversified portfolio built from Schwab ETFs with a slight lean toward small cap value.
Age: 35
Risk Tolerance: Aggressive

Current breakdown:

SCHB Us Broad Market ETF, 46.9%
SLYV SPDR S&P 600 Small Cap ETF, 15.23%
SCHF, Schwab International ETF, 14.95%
SCHH, Schwab REIT ETF, 10.06%
SCHE, Schwab Emerging Markets ETF, 5%
SCHC, Schwab International Small Cap ETF, 4.83%
SCHZ, Schwab US Aggregate Bond ETF, 1.92%
BWZ, SPDR Bloomberg & Barclay SH TM INTL ETF, .73%

Reason for the small positions at the bottom is that I initially built this using Personal Capital and it recommended a small (1-2%) interest in Bonds & Treasuries. Any simplification recommendations would be appreciated!
What is your target allocation?
What % international equities is your target?
Have you solidified your IPS Statement?
Define General Investment Goals and Objectives (what is your plan?)
https://www.bogleheads.org/wiki/Invest ... statement

Good read for you:
TAYLOR LARIMORE ON “SIMPLICTY”
https://www.bogleheads.org/forum/viewt ... p?t=156505

Can you post an entire financial picture so you can get comprehensive suggestions?
In this format?
Asking Portfolio Questions
https://www.bogleheads.org/forum/viewt ... =1&t=6212

Aloha
j :D
Last edited by Sandtrap on Sat May 19, 2018 6:01 pm, edited 1 time in total.

retiredjg
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Joined: Thu Jan 10, 2008 12:56 pm

Re: Would like to simplify my portfolio. Any thoughts?

Post by retiredjg » Sat May 19, 2018 5:51 pm

See the link at the bottom of this message for how to get to most help with this type of question.

Your portfolio plan should start with the most inflexible account you have. This is often a work plan like a 401k or 403b.

mjuszczak
Posts: 33
Joined: Tue Jan 30, 2018 8:23 am

Re: Would like to simplify my portfolio. Any thoughts?

Post by mjuszczak » Sat May 19, 2018 5:56 pm

Unfortunately I'm self employed so I only have my IRA

retiredjg
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Joined: Thu Jan 10, 2008 12:56 pm

Re: Would like to simplify my portfolio. Any thoughts?

Post by retiredjg » Sat May 19, 2018 5:59 pm

An IRA is not enough saved to expect a decent retirement.

You will still get the best and most advice if you post your whole picture. For example, maybe you need to consider a Solo 401k or SEP IRA or SIMPLE IRA.

Maybe you are not ready just yet. Keep it in mind for when you are.

mjuszczak
Posts: 33
Joined: Tue Jan 30, 2018 8:23 am

Re: Would like to simplify my portfolio. Any thoughts?

Post by mjuszczak » Sat May 19, 2018 6:00 pm

Sandtrap wrote:
Sat May 19, 2018 5:45 pm
mjuszczak wrote:
Sat May 19, 2018 5:05 pm
Goal: Diversified portfolio built from Schwab ETFs with a slight lean toward small cap value.
Age: 35
Risk Tolerance: Aggressive

Current breakdown:

SCHB Us Broad Market ETF, 46.9%
SLYV SPDR S&P 600 Small Cap ETF, 15.23%
SCHF, Schwab International ETF, 14.95%
SCHH, Schwab REIT ETF, 10.06%
SCHE, Schwab Emerging Markets ETF, 5%
SCHC, Schwab International Small Cap ETF, 4.83%
SCHZ, Schwab US Aggregate Bond ETF, 1.92%
BWZ, SPDR Bloomberg & Barclay SH TM INTL ETF, .73%

Reason for the small positions at the bottom is that I initially built this using Personal Capital and it recommended a small (1-2%) interest in Bonds & Treasuries. Any simplification recommendations would be appreciated!
What is your target allocation?
What % international equities is your target?
Have you solidified your IPS Statement?
Define General Investment Goals and Objectives (what is your plan?)
https://www.bogleheads.org/wiki/Invest ... statement

Good read for you:
TAYLOR LARIMORE ON “SIMPLICTY”
https://www.bogleheads.org/forum/viewt ... p?t=156505

Aloha
j :D
My existing target allocation -- have had this written down for years:

.5% Cash
.8% International Bonds
2.2% US Bonds
25.8% International Stocks
60.2% US Stocks
10.5% Alternatives

... however, of course, this is why I'm asking if I should simplify (and change).

mjuszczak
Posts: 33
Joined: Tue Jan 30, 2018 8:23 am

Re: Would like to simplify my portfolio. Any thoughts?

Post by mjuszczak » Sat May 19, 2018 6:02 pm

retiredjg wrote:
Sat May 19, 2018 5:59 pm
An IRA is not enough saved to expect a decent retirement.

You will still get the best and most advice if you post your whole picture. For example, maybe you need to consider a Solo 401k or SEP IRA or SIMPLE IRA.

Maybe you are not ready just yet. Keep it in mind for when you are.
Got it.

I max out my IRA every year @ $5,500/year. I can't do a SEP IRA because I have other employees and it wouldn't make sense for me financially.

I have a Robinhood account where I trade options and short-term stock trades, don't really count that... it's gambling.

I have an individual account at m1 finance where I'm investing in ETFs: BOTZ, BLOK, MTUM, BRK.B (kind of an ETF?) in equal parts.

Additionally, I have a direct investments in JNJ & SPOT (the latter being a gamble, less than 5% of my overall portfolio).

So yeah, a little more aggressive on US equities when I look at the overall picture.

terran
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Re: Would like to simplify my portfolio. Any thoughts?

Post by terran » Sat May 19, 2018 6:06 pm

Here's what I would do
mjuszczak wrote:
Sat May 19, 2018 5:05 pm
SCHB Us Broad Market ETF, 46.9% 42-80%
SLYV SPDR S&P 600 Small Cap ETF, 15.23%
SCHF, Schwab International ETF, 14.95% 14-40%
SCHH, Schwab REIT ETF, 10.06%
SCHE, Schwab Emerging Markets ETF, 5%
SCHC, Schwab International Small Cap ETF, 4.83%

SCHZ, Schwab US Aggregate Bond ETF, 1.92% 0-30%
BWZ, SPDR Bloomberg & Barclay SH TM INTL ETF, .73%
This represents anywhere from a 70% stock / 30% bond to 100% stock allocation and a 20 - 40% allocation of stocks to international (assuming I did the math right). Personally I would lean more towards the higher stock and higher international allocation unless you're closer to retirement than your age would suggest.

mjuszczak
Posts: 33
Joined: Tue Jan 30, 2018 8:23 am

Re: Would like to simplify my portfolio. Any thoughts?

Post by mjuszczak » Sat May 19, 2018 6:09 pm

Wow, that simplified! You wouldn't try to tackle anything emerging markets?

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vineviz
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Re: Would like to simplify my portfolio. Any thoughts?

Post by vineviz » Sat May 19, 2018 6:24 pm

mjuszczak wrote:
Sat May 19, 2018 5:05 pm
Any simplification recommendations would be appreciated!
You are duplicating a lot asset classes and risk exposure. I'd probably simplify to something like this:

SCHB Schwab US Broad Market ETF 40.00%
SLYV SPDR S&P 600 Small Cap Value ETF 30.00%
SCHF Schwab International Equity ETF 20.00%
SCHZ Schwab US Aggregate Bond ETF 10.00%
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

mjuszczak
Posts: 33
Joined: Tue Jan 30, 2018 8:23 am

Re: Would like to simplify my portfolio. Any thoughts?

Post by mjuszczak » Sat May 19, 2018 6:26 pm

vineviz wrote:
Sat May 19, 2018 6:24 pm
mjuszczak wrote:
Sat May 19, 2018 5:05 pm
Any simplification recommendations would be appreciated!
You are duplicating a lot asset classes and risk exposure. I'd probably simplify to something like this:

SCHB Schwab US Broad Market ETF 40.00%
SLYV SPDR S&P 600 Small Cap Value ETF 30.00%
SCHF Schwab International Equity ETF 20.00%
SCHZ Schwab US Aggregate Bond ETF 10.00%
I like the simplicity! And it would still give me a small cap value tilt. Are you not worried about lack of alternatives (REITs) in that portfolio or lack of emerging markets? From what I understand SCHF doesn't cover full international.

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Sandtrap
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Re: Would like to simplify my portfolio. Any thoughts?

Post by Sandtrap » Sat May 19, 2018 6:31 pm

terran wrote:
Sat May 19, 2018 6:06 pm
Here's what I would do
mjuszczak wrote:
Sat May 19, 2018 5:05 pm
SCHB Us Broad Market ETF, 46.9% 42-80%
SLYV SPDR S&P 600 Small Cap ETF, 15.23%
SCHF, Schwab International ETF, 14.95% 14-40%
SCHH, Schwab REIT ETF, 10.06%
SCHE, Schwab Emerging Markets ETF, 5%
SCHC, Schwab International Small Cap ETF, 4.83%

SCHZ, Schwab US Aggregate Bond ETF, 1.92% 0-30%
BWZ, SPDR Bloomberg & Barclay SH TM INTL ETF, .73%
This represents anywhere from a 70% stock / 30% bond to 100% stock allocation and a 20 - 40% allocation of stocks to international (assuming I did the math right). Personally I would lean more towards the higher stock and higher international allocation unless you're closer to retirement than your age would suggest.
+1

terran
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Re: Would like to simplify my portfolio. Any thoughts?

Post by terran » Sat May 19, 2018 6:35 pm

mjuszczak wrote:
Sat May 19, 2018 6:09 pm
Wow, that simplified! You wouldn't try to tackle anything emerging markets?
Meh, probably not. I wouldn't oppose it if you want to either though, in which case I'd shoot for approximating the total international market. My international exposure comes from total international market ETFs/funds, so it's already in those. Doesn't look like Schwab has a commission free version of one of those though.

mjuszczak
Posts: 33
Joined: Tue Jan 30, 2018 8:23 am

Re: Would like to simplify my portfolio. Any thoughts?

Post by mjuszczak » Sat May 19, 2018 6:36 pm

Sandtrap wrote:
Sat May 19, 2018 6:31 pm
terran wrote:
Sat May 19, 2018 6:06 pm
Here's what I would do
mjuszczak wrote:
Sat May 19, 2018 5:05 pm
SCHB Us Broad Market ETF, 46.9% 42-80%
SLYV SPDR S&P 600 Small Cap ETF, 15.23%
SCHF, Schwab International ETF, 14.95% 14-40%
SCHH, Schwab REIT ETF, 10.06%
SCHE, Schwab Emerging Markets ETF, 5%
SCHC, Schwab International Small Cap ETF, 4.83%

SCHZ, Schwab US Aggregate Bond ETF, 1.92% 0-30%
BWZ, SPDR Bloomberg & Barclay SH TM INTL ETF, .73%
This represents anywhere from a 70% stock / 30% bond to 100% stock allocation and a 20 - 40% allocation of stocks to international (assuming I did the math right). Personally I would lean more towards the higher stock and higher international allocation unless you're closer to retirement than your age would suggest.
+1
So you also would forgo the Emerging Markets and REIT?

mjuszczak
Posts: 33
Joined: Tue Jan 30, 2018 8:23 am

Re: Would like to simplify my portfolio. Any thoughts?

Post by mjuszczak » Sat May 19, 2018 6:36 pm

terran wrote:
Sat May 19, 2018 6:35 pm
mjuszczak wrote:
Sat May 19, 2018 6:09 pm
Wow, that simplified! You wouldn't try to tackle anything emerging markets?
Meh, probably not. I wouldn't oppose it if you want to either though, in which case I'd shoot for approximating the total international market. My international exposure comes from total international market ETFs/funds, so it's already in those. Doesn't look like Schwab has a commission free version of one of those though.
They don't, so it's supposed to be tackled by splitting across those 3 ETFs I have.

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Sandtrap
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Re: Would like to simplify my portfolio. Any thoughts?

Post by Sandtrap » Sat May 19, 2018 6:37 pm

mjuszczak wrote:
Sat May 19, 2018 6:36 pm
Sandtrap wrote:
Sat May 19, 2018 6:31 pm
terran wrote:
Sat May 19, 2018 6:06 pm
Here's what I would do
mjuszczak wrote:
Sat May 19, 2018 5:05 pm
SCHB Us Broad Market ETF, 46.9% 42-80%
SLYV SPDR S&P 600 Small Cap ETF, 15.23%
SCHF, Schwab International ETF, 14.95% 14-40%
SCHH, Schwab REIT ETF, 10.06%
SCHE, Schwab Emerging Markets ETF, 5%
SCHC, Schwab International Small Cap ETF, 4.83%

SCHZ, Schwab US Aggregate Bond ETF, 1.92% 0-30%
BWZ, SPDR Bloomberg & Barclay SH TM INTL ETF, .73%
This represents anywhere from a 70% stock / 30% bond to 100% stock allocation and a 20 - 40% allocation of stocks to international (assuming I did the math right). Personally I would lean more towards the higher stock and higher international allocation unless you're closer to retirement than your age would suggest.
+1
So you also would forgo the Emerging Markets and REIT?
simplicity.
yes.
j

mjuszczak
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Re: Would like to simplify my portfolio. Any thoughts?

Post by mjuszczak » Sat May 19, 2018 6:40 pm

Thanks!!

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vineviz
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Re: Would like to simplify my portfolio. Any thoughts?

Post by vineviz » Sat May 19, 2018 7:49 pm

REITs can be a good diversifier, but in a portfolio that already includes small value, international, and bonds the marginal diversification value is pretty minimal. Same for emerging markets.

Both are fine asset classes but are mostly redundant IMHO.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

mjuszczak
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Re: Would like to simplify my portfolio. Any thoughts?

Post by mjuszczak » Sat May 19, 2018 8:04 pm

Got it. Thank you! That makes sense.

dharrythomas
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Re: Would like to simplify my portfolio. Any thoughts?

Post by dharrythomas » Sat May 19, 2018 9:03 pm

The general rule is that you're wasting your time with allocations less than 5%. You add needless complexity to your account without moving the needle on returns. No matter how good you do with that portion, it gets buried when it is averaged into your total portfolio return. Even if it went to zero, the impact on your portfolio return would often be minimal.

Yes, you should simplify.

Dottie57
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Re: Would like to simplify my portfolio. Any thoughts?

Post by Dottie57 » Sat May 19, 2018 9:10 pm

vineviz wrote:
Sat May 19, 2018 6:24 pm
mjuszczak wrote:
Sat May 19, 2018 5:05 pm
Any simplification recommendations would be appreciated!
You are duplicating a lot asset classes and risk exposure. I'd probably simplify to something like this:

SCHB Schwab US Broad Market ETF 40.00%
SLYV SPDR S&P 600 Small Cap Value ETF 30.00%
SCHF Schwab International Equity ETF 20.00%
SCHZ Schwab US Aggregate Bond ETF 10.00%
+1

I like having international. Small cap value may or may not help.

mjuszczak
Posts: 33
Joined: Tue Jan 30, 2018 8:23 am

Re: Would like to simplify my portfolio. Any thoughts?

Post by mjuszczak » Sat May 19, 2018 9:19 pm

dharrythomas wrote:
Sat May 19, 2018 9:03 pm
The general rule is that you're wasting your time with allocations less than 5%. You add needless complexity to your account without moving the needle on returns. No matter how good you do with that portion, it gets buried when it is averaged into your total portfolio return. Even if it went to zero, the impact on your portfolio return would often be minimal.

Yes, you should simplify.
Got it. That makes a ton of sense.

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