Combining slice and dice with TrevH 4 fund?

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DebiT
Posts: 117
Joined: Sat Dec 28, 2013 1:45 pm

Combining slice and dice with TrevH 4 fund?

Post by DebiT » Sun May 20, 2018 11:31 am

On another post I was asking about the international side of my portfolio, and got lots of good feedback. While some would say VTI, VXUS, and BND would so,the trick, others would say adding small cap and value adds to diversification over the long haul. So here's a question after digesting all of this.

For the sake of simplification let's say that I've been 55/45. On the equities side it's been
VTI 30%
VXUS 20%
RWO 5% (a blend of US and Intl REITs)

My understanding is that TrevH's 4 fund portfolio would be
SPY 25%
VBR 25%
VEU 25%
VSS 25%

Since I like VTI and VXUS, do I gain some diversification by adding a bit of LV and SC, as in
VTI 25%
VBR 5%
VXUS 15%
VSS 5%
RWO 5%

In other words, is some of the diversification already in VTI as opposed to SPY, and in VXUS as opposed to VEU?
Age 60, complete retirement not til 70, target is 50/50 -- Stock US 30, Intl 15, REIT 5. Bonds US 45, cash ~5

drk
Posts: 522
Joined: Mon Jul 24, 2017 10:33 pm
Location: Seattle

Re: Combining slice and dice with TrevH 4 fund?

Post by drk » Sun May 20, 2018 11:41 am

DebiT wrote:
Sun May 20, 2018 11:31 am
On another post I was asking about the international side of my portfolio, and got lots of good feedback. While some would say VTI, VXUS, and BND would so,the trick, others would say adding small cap and value adds to diversification over the long haul. So here's a question after digesting all of this.

For the sake of simplification let's say that I've been 55/45. On the equities side it's been
VTI 30%
VXUS 20%
RWO 5% (a blend of US and Intl REITs)

My understanding is that TrevH's 4 fund portfolio would be
SPY 25%
VBR 25%
VEU 25%
VSS 25%

Since I like VTI and VXUS, do I gain some diversification by adding a bit of LV and SC, as in
VTI 25%
VBR 5%
VXUS 15%
VSS 5%
RWO 5%

In other words, is some of the diversification already in VTI as opposed to SPY, and in VXUS as opposed to VEU?
That's fine, but call it what it is: a tilt, not extra diversification. What's your investing timeline? Over the long haul, it's unlikely that the 5% to VBR, VSS, and REITs are going to make a difference. Nearer-term, you're likely introducing tracking error by adding them.

DebiT
Posts: 117
Joined: Sat Dec 28, 2013 1:45 pm

Re: Combining slice and dice with TrevH 4 fund?

Post by DebiT » Sun May 20, 2018 12:36 pm

Timeline in total is long, since my family lives into their 90's At age 60, self-employed, we are 6-9 years ago from full=retirement.

I've been looking at Evanson's 10x10 because of reading McClung's book (very thorough, very detailed research). Searching this board re 10x10 leads to so many recommending TrevH's 4 fund portfolio, but I realize that it feels too heavy in the small cap area for my stomach.

Hence my wondering if adding a little bit of value and small-cap to my very broad funds gets the same job done. I think I am in the head-spinning phase here.
Age 60, complete retirement not til 70, target is 50/50 -- Stock US 30, Intl 15, REIT 5. Bonds US 45, cash ~5

drk
Posts: 522
Joined: Mon Jul 24, 2017 10:33 pm
Location: Seattle

Re: Combining slice and dice with TrevH 4 fund?

Post by drk » Sun May 20, 2018 1:29 pm

DebiT wrote:
Sun May 20, 2018 12:36 pm
I think I am in the head-spinning phase here.
Agree 100%. You have a perfectly fine equity portfolio just as it is. Adding bits of anything else would just be for your own amusement.

DebiT
Posts: 117
Joined: Sat Dec 28, 2013 1:45 pm

Re: Combining slice and dice with TrevH 4 fund?

Post by DebiT » Sun May 20, 2018 2:17 pm

Ok, so I began this post by saying, for the sake of simplification let's assume I have
VTI 30%
VXUS 20%
RWO 5% (a blend of US and Intl REITs
(all of this in tax deferred)

So right now, that 30% position is actually

VTI 13%
SCHD 6% Schwab Dividend Fund, USLV. Bought when I was thinking that the dividend meant safety. Not so sure now.
VXF 4% Vanguard Extended, picking up some small , but surely overlapping lots with VTI
XLU 5% Utilities ETF, with a nice dividend, which I've held for a long time.

So I'm asking for feedback on this part. I really like the dividend from the XLU and I've held it a long time, so not as likely to want to sell it without compelling reason.
Age 60, complete retirement not til 70, target is 50/50 -- Stock US 30, Intl 15, REIT 5. Bonds US 45, cash ~5

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