Am I hitting the important asset classes?

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StarDolphin
Posts: 2
Joined: Tue Oct 16, 2018 1:46 am

Am I hitting the important asset classes?

Post by StarDolphin » Tue Oct 16, 2018 4:34 pm

Background: I come from a family that has shied away from heavy equity investments. My parents went down the route of investing in real property each time they save up enough to do so (and spend a lot of weekends doing the landlording thing). I learned quite quickly that this was not a desirable strategy for me, and set out to start saving via (mostly) vanguard mutual funds.

My main concern is if my fund allocation is either missing something I should be covering or if I'm in funds that appear to be diversified but are really overlapping :|

-----
Emergency funds: None, not really a concern
Debt: House Loan (which will be at about 33% LTV now. Also 2.5% Interest, so not paying it off)
Tax Filing Status: Single
Tax Rate: High
State of Residence: CA
Age: 30
Desired Asset allocation: Uhh, stocks?
Desired International allocation: I don't know

Vanguard (Investment) Funds:
Taxable:
1% VANGUARD ENERGY ETF (VDE) (0.10%) // This was an experiment when I was first getting started, never bothered to sell
8.5% Vanguard real Estate Index Fund Admiral Shares (VGSLX) (0.12%)
10.7% Vanguard High Dividend Yield Index Fund Investor Shares (VHDYX) (0.15%)
4.8% Vanguard Mid-Cap Index Fund Admiral Shares (VIMAX) (0.05%)
3.8% Vanguard Small-Cap Index Fund Admiral Shares (VSMAX) (0.05%)
9.2% Vanguard Developed Markets Index Fund Admiral Shares (VTMGX) (0.07%)
16.1% Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (0.04%)
11.5% Vanguard Value Index Fund Admiral Shares (VVIAX) (0.05%)
401K:
34.4% Vanguard Target Retirement 2055 Trust Select (Fund # 1683) (0.05%)

Other Assets:
My Vanguard accounts are likely somewhere around 20% of my net worth. The rest is split between my house (45%) and Amazon.com stock (35% RSU grants I never sold. I've been trying to draw them down and move the money over to my vanguard mutual funds, but the combination of it being hard to get off a speeding train (dat stock price!) and not being entirely sure if I'm doing the mutual fund thing right has stayed my hand there.
I also have 11.8K in Wealthfront (10K experiment started in April of 2015. No additional fee until it hits 15K, its up 18% since then, not bad...?)
And i was starting to put money into a HSA, (Investing in a total stock market index), but it is too small to matter right now.
And 3 shares of Disney and some US savings bonds =)

Contributions:
Not really important to my question, but I max out my 401K, have a 50% employer match, and generally move funds from my checking every time it hits a threshold, and that happens several times a year. I generally don't mind money pooling in my checking, since I get 2% on checking account balances under 25K at my CU :).

Questions:
1. For the Taxable Vanguard account, does the distribution seem sensible? The only thing I've been thinking about recently is if I want to increase my international and/or developing market exposure.
2. I've generally been trying to avoid any funds explicitly investing in tech due to my large Amazon.com stake, if I do end up selling that and moving it into funds, would it make sense to get some explicitly tech fund? I do work in tech, so my thoughts are i should be investing in industries that are not likely to be down when my home industry is down?

Thanks for everyone who takes the time to read/comment! As I mentioned, I don't really have any family with good experiences with investing, so I'm learning by doing. And teaching my siblings :P

megabad
Posts: 663
Joined: Fri Jun 01, 2018 4:00 pm

Re: Am I hitting the important asset classes?

Post by megabad » Tue Oct 16, 2018 8:14 pm

StarDolphin wrote:
Tue Oct 16, 2018 4:34 pm
...
My main concern is if my fund allocation is either missing something I should be covering or if I'm in funds that appear to be diversified but are really overlapping :|
...

Questions:
1. For the Taxable Vanguard account, does the distribution seem sensible? The only thing I've been thinking about recently is if I want to increase my international and/or developing market exposure.
You appear to have a very heavy large value tilt in your funds (~30% of your taxable equity funds). I am not sure if this is your intent or not since you also own a notorious large growth stock in large quantity (AMZN). VHDYX and VVIAX overlap quite a bit. I would likely double your international holdings in taxable and possibly add EM if I were you since you are lacking there (currently at maybe 13% of taxable equities international). I am not personally a fan of REIT in taxable since it spins off bunches of distributions.
2. I've generally been trying to avoid any funds explicitly investing in tech due to my large Amazon.com stake, if I do end up selling that and moving it into funds, would it make sense to get some explicitly tech fund? I do work in tech, so my thoughts are i should be investing in industries that are not likely to be down when my home industry is down?
I am a broad index investor, not a sector investor. I would dump it in a broad index and not look back. You will need to make your own decision, but your AMZN holding is obviously a very large part of your portfolio and represents considerable single stock risk.

Living Free
Posts: 119
Joined: Thu Jul 19, 2018 7:31 pm

Re: Am I hitting the important asset classes?

Post by Living Free » Tue Oct 16, 2018 8:31 pm

StarDolphin wrote:
Tue Oct 16, 2018 4:34 pm
Background: I come from a family that has shied away from heavy equity investments. My parents went down the route of investing in real property each time they save up enough to do so (and spend a lot of weekends doing the landlording thing). I learned quite quickly that this was not a desirable strategy for me, and set out to start saving via (mostly) vanguard mutual funds.

My main concern is if my fund allocation is either missing something I should be covering or if I'm in funds that appear to be diversified but are really overlapping :|

-----
Emergency funds: None, not really a concern
Debt: House Loan (which will be at about 33% LTV now. Also 2.5% Interest, so not paying it off)
Tax Filing Status: Single
Tax Rate: High
State of Residence: CA
Age: 30
Desired Asset allocation: Uhh, stocks?
Desired International allocation: I don't know

Vanguard (Investment) Funds:
Taxable:
1% VANGUARD ENERGY ETF (VDE) (0.10%) // This was an experiment when I was first getting started, never bothered to sell
8.5% Vanguard real Estate Index Fund Admiral Shares (VGSLX) (0.12%)
10.7% Vanguard High Dividend Yield Index Fund Investor Shares (VHDYX) (0.15%)
4.8% Vanguard Mid-Cap Index Fund Admiral Shares (VIMAX) (0.05%)
3.8% Vanguard Small-Cap Index Fund Admiral Shares (VSMAX) (0.05%)
9.2% Vanguard Developed Markets Index Fund Admiral Shares (VTMGX) (0.07%)
16.1% Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (0.04%)
11.5% Vanguard Value Index Fund Admiral Shares (VVIAX) (0.05%)
401K:
34.4% Vanguard Target Retirement 2055 Trust Select (Fund # 1683) (0.05%)

Other Assets:
My Vanguard accounts are likely somewhere around 20% of my net worth. The rest is split between my house (45%) and Amazon.com stock (35% RSU grants I never sold. I've been trying to draw them down and move the money over to my vanguard mutual funds, but the combination of it being hard to get off a speeding train (dat stock price!) and not being entirely sure if I'm doing the mutual fund thing right has stayed my hand there.
I also have 11.8K in Wealthfront (10K experiment started in April of 2015. No additional fee until it hits 15K, its up 18% since then, not bad...?)
And i was starting to put money into a HSA, (Investing in a total stock market index), but it is too small to matter right now.
And 3 shares of Disney and some US savings bonds =)

Contributions:
Not really important to my question, but I max out my 401K, have a 50% employer match, and generally move funds from my checking every time it hits a threshold, and that happens several times a year. I generally don't mind money pooling in my checking, since I get 2% on checking account balances under 25K at my CU :).

Questions:
1. For the Taxable Vanguard account, does the distribution seem sensible? The only thing I've been thinking about recently is if I want to increase my international and/or developing market exposure.
2. I've generally been trying to avoid any funds explicitly investing in tech due to my large Amazon.com stake, if I do end up selling that and moving it into funds, would it make sense to get some explicitly tech fund? I do work in tech, so my thoughts are i should be investing in industries that are not likely to be down when my home industry is down?

Thanks for everyone who takes the time to read/comment! As I mentioned, I don't really have any family with good experiences with investing, so I'm learning by doing. And teaching my siblings :P
1. 35% of net worth in a single stock would make me very nervous (actually it's >50% of your invested assets). I'd likely get out of that or at least minimize the position to 10% or less of the invested portfolio.

2. For the vanguard taxable account, I agree it is too complex. It seems like you don't have a particular asset allocation plan in mind. I'd recommend that before you decide what to buy or sell you decide upon that and write it down and then stick to it. There are many reasonable asset allocations for someone in your age and situation, but just to give an example I'm not much older than you and I'm 80% stock and 20% bond as my goal, with 1/3rd of stock being international stock.
I also agree that REITs should ideally be held in tax advantaged accounts as they have high expected returns which are taxed as ordinary income.

3. How do you not have a concern about an emergency fund? Nice position to be in! :happy

User avatar
BolderBoy
Posts: 4142
Joined: Wed Apr 07, 2010 12:16 pm
Location: Colorado

Re: Am I hitting the important asset classes?

Post by BolderBoy » Tue Oct 16, 2018 9:52 pm

StarDolphin wrote:
Tue Oct 16, 2018 4:34 pm
1. For the Taxable Vanguard account, does the distribution seem sensible?
It is overly complicated. Search the forum wiki for "3 fund portfolio", study it and come back to ask questions about it, if you need to.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect

StarDolphin
Posts: 2
Joined: Tue Oct 16, 2018 1:46 am

Re: Am I hitting the important asset classes?

Post by StarDolphin » Tue Oct 16, 2018 10:05 pm

I am very aware that I have been incredibly lucky with my ... undirected (?) investments. I basically let the RSU's and house sit without thinking too much about what it meant from an investment perspective and hit the lottery. (I bought the house in 2012, which happened to be right at the bottom of the market and we estimate its value is around 100% more than what I bought it for, and the earliest RSU's from when I was first hired are up something insane like 1400% o__o)
megabad wrote:
Tue Oct 16, 2018 8:14 pm
You appear to have a very heavy large value tilt in your funds (~30% of your taxable equity funds). I am not sure if this is your intent or not since you also own a notorious large growth stock in large quantity (AMZN). VHDYX and VVIAX overlap quite a bit. I would likely double your international holdings in taxable and possibly add EM if I were you since you are lacking there (currently at maybe 13% of taxable equities international).
Living Free wrote:
Tue Oct 16, 2018 8:31 pm
2. For the vanguard taxable account, I agree it is too complex. It seems like you don't have a particular asset allocation plan in mind. I'd recommend that before you decide what to buy or sell you decide upon that and write it down and then stick to it. There are many reasonable asset allocations for someone in your age and situation, but just to give an example I'm not much older than you and I'm 80% stock and 20% bond as my goal, with 1/3rd of stock being international stock.
Nope, not really intentional. I do note that my basic investment/balancing strat has been to try to buy what the portfolio needs when I add new money, I don't think I've sold anything I've purchased. Reason for the ticker spam. Last time I moved money in I figured I was a bit high cap heavy so bought VSMAX, and this time I was thinking I was a bit US heavy and was going to buy international. I've just barely begun reading about Value/Growth/Dividend and High/Med/Small caps. The lack of a plan is the reason most of the investment is in VTSAX.

Thanks for the suggestions. I'll look into how to add international/Emerging Markets :).
megabad wrote:
Tue Oct 16, 2018 8:14 pm
I am not personally a fan of REIT in taxable since it spins off bunches of distributions.
Living Free wrote:
Tue Oct 16, 2018 8:31 pm
I also agree that REITs should ideally be held in tax advantaged accounts as they have high expected returns which are taxed as ordinary income.
This mostly flowed from my original desire to figure out how to invest, looking at my parents, deciding I didn't want to buy property, and then looking for a fund that did the same thing without having to manage anything. Once I started reading up on the different types the future investment of that type went into VHDYX.
Living Free wrote:
Tue Oct 16, 2018 8:31 pm
1. 35% of net worth in a single stock would make me very nervous (actually it's >50% of your invested assets). I'd likely get out of that or at least minimize the position to 10% or less of the invested portfolio.
megabad wrote:
Tue Oct 16, 2018 8:14 pm
I am a broad index investor, not a sector investor. I would dump it in a broad index and not look back. You will need to make your own decision, but your AMZN holding is obviously a very large part of your portfolio and represents considerable single stock risk.
Yes well, it was 'lazy investing', me selecting 'sell to cover' on my RSU's and not thinking about it. I've begun the process of shrinking it (I now sell all for new vests, and I sold a portion of it last year), but as I said, hard to get off a speeding train and a huge chunk of that value (>60%) is long term capital gains, not cost basis, so selling does require at least a bit of thought :/
Living Free wrote:
Tue Oct 16, 2018 8:31 pm
3. How do you not have a concern about an emergency fund? Nice position to be in! :happy
Most of it comes from that I live well below my means (I easily save over half my post-tax income, likely closer to 80%. Raised to be very frugal, have the opposite problem of trying to force myself to spend on things I would not otherwise). That, coupled with the fact my house is a multiplex (a different story, see below. But it is an alternate income source that covers housing costs), having parents that live close who would be willing (well, would insist) that I live with them and/or provide help if needed.

Basically, I run into the issue of keeping my liquid amounts from pooling up too much rather than running out of them. So I haven't had a need to create an explicit emergency fund.



Housing Story: When I was shopping in 2012, The houses were going for about 5% more than I could afford (I had one place counter at 575K when all I could stretch to was 530K), and I had no way to come up with the extra 50,000 or so needed to make a purchase. Fixer houses were going for about what I could afford, but they were all taking all cash offers, not people with loans :(. Then the market started taking off, and it was clear that I couldn't save as fast as the market was gaining steam.

Luckily, I found a multiplex listed on a commercial listing. It was significantly more expensive, but through the magic of 'banking logic', I could qualify for it because of rental income. (Nevermind that I had more than enough income to afford the payments on the SFH's. Grr). Partially because the previous owner was foolish to not list on the residential listing (which was heating up, while the commercial one was lagging) and the banking logic, I got in at the bottom of the market.

I would have honestly preferred a SFH, without the additional headache's, but I can't deny it is an economic boom. The rents cover Mortgage + Insurance, essentially letting me live in a very expensive area for very cheap. And through IRS black voodoo, somehow the cashflow-positive property is a (rather large) loss on paper, making it a huge tax benefit. Even larger now with the new tax law changes. Course we also made the mistake of letting the renters know the owner lives on the property (No, you cannot just tell me in person. Write the damn address on your lease, there needs to be a paper trail)

I've actually been considering putting Rental Management on the place. Its 8% of rents, but if it can make the negatives go away while doing nothing more than blunting the positives, it might be worth it.

NYCwriter
Posts: 192
Joined: Thu Sep 17, 2015 12:46 am

Re: Am I hitting the important asset classes?

Post by NYCwriter » Wed Oct 17, 2018 3:01 am

You have a lot of different funds in taxable. You may be incurring unnecessary taxes and expense fees against returns. How do you determine buying what your portfolio needs? It looks like you're adding funds that duplicate purpose and increase taxes. Even though you've been fortunate, you may be paying more than you need to. Using tax-advantaged accounts for tax inefficient holdings (REIT funds) makes sense.

Since I have a few retirement accounts, a Roth, a taxable, and individual holdings, I found it beneficial to use the free Personal Capital app to get an overall picture. (They will nag you about their advisor services--I just ignore, They also have their own philosophy about asset classes which I also ignore, but it's useful for getting a picture of your portfolio breakdown.) The other alternative is a good financial advisor and accountant. If your finances are complex, this is an option that can help.

I also purchased a shares of Amazon years ago. Nowhere near your amount. I reduced by small amounts last year and earlier this year. At one point my long Apple holdings were over 6% of my total portfolio and even that was risky.

I guess maybe you could set priorities, and then do tax forecasting and take it slow, split it across a few years.

Possibilities:
--reduce individual equities. You are carrying a lot of risk in one large egg, no matter how wonderful the company.
--Calculate losses versus gains. If you close a smaller long fund with some losses, you can use that to offset gains from another.
--Consider taxable v tax-advantaged vehicles. There's a good wiki on this in the forum.

I can't comment on real estate.

WanderingDoc
Posts: 1142
Joined: Sat Aug 05, 2017 8:21 pm

Re: Am I hitting the important asset classes?

Post by WanderingDoc » Wed Oct 17, 2018 8:18 am

StarDolphin wrote:
Tue Oct 16, 2018 4:34 pm
Background: I come from a family that has shied away from heavy equity investments. My parents went down the route of investing in real property each time they save up enough to do so (and spend a lot of weekends doing the landlording thing). I learned quite quickly that this was not a desirable strategy for me, and set out to start saving via (mostly) vanguard mutual funds.

My main concern is if my fund allocation is either missing something I should be covering or if I'm in funds that appear to be diversified but are really overlapping :|

-----
Emergency funds: None, not really a concern
Debt: House Loan (which will be at about 33% LTV now. Also 2.5% Interest, so not paying it off)
Tax Filing Status: Single
Tax Rate: High
State of Residence: CA
Age: 30
Desired Asset allocation: Uhh, stocks?
Desired International allocation: I don't know

Vanguard (Investment) Funds:
Taxable:
1% VANGUARD ENERGY ETF (VDE) (0.10%) // This was an experiment when I was first getting started, never bothered to sell
8.5% Vanguard real Estate Index Fund Admiral Shares (VGSLX) (0.12%)
10.7% Vanguard High Dividend Yield Index Fund Investor Shares (VHDYX) (0.15%)
4.8% Vanguard Mid-Cap Index Fund Admiral Shares (VIMAX) (0.05%)
3.8% Vanguard Small-Cap Index Fund Admiral Shares (VSMAX) (0.05%)
9.2% Vanguard Developed Markets Index Fund Admiral Shares (VTMGX) (0.07%)
16.1% Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (0.04%)
11.5% Vanguard Value Index Fund Admiral Shares (VVIAX) (0.05%)
401K:
34.4% Vanguard Target Retirement 2055 Trust Select (Fund # 1683) (0.05%)

Other Assets:
My Vanguard accounts are likely somewhere around 20% of my net worth. The rest is split between my house (45%) and Amazon.com stock (35% RSU grants I never sold. I've been trying to draw them down and move the money over to my vanguard mutual funds, but the combination of it being hard to get off a speeding train (dat stock price!) and not being entirely sure if I'm doing the mutual fund thing right has stayed my hand there.
I also have 11.8K in Wealthfront (10K experiment started in April of 2015. No additional fee until it hits 15K, its up 18% since then, not bad...?)
And i was starting to put money into a HSA, (Investing in a total stock market index), but it is too small to matter right now.
And 3 shares of Disney and some US savings bonds =)

Contributions:
Not really important to my question, but I max out my 401K, have a 50% employer match, and generally move funds from my checking every time it hits a threshold, and that happens several times a year. I generally don't mind money pooling in my checking, since I get 2% on checking account balances under 25K at my CU :).

Questions:
1. For the Taxable Vanguard account, does the distribution seem sensible? The only thing I've been thinking about recently is if I want to increase my international and/or developing market exposure.
2. I've generally been trying to avoid any funds explicitly investing in tech due to my large Amazon.com stake, if I do end up selling that and moving it into funds, would it make sense to get some explicitly tech fund? I do work in tech, so my thoughts are i should be investing in industries that are not likely to be down when my home industry is down?

Thanks for everyone who takes the time to read/comment! As I mentioned, I don't really have any family with good experiences with investing, so I'm learning by doing. And teaching my siblings :P
100% return on the house in 6 years. Not a bad return for doing nothing (have to live somewhere). Its your most valuable asset today. CA has been insane. Imagine if you put 20% on 2-3 other houses what position you'd be in! :D :sharebeer
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

retiredjg
Posts: 34164
Joined: Thu Jan 10, 2008 12:56 pm

Re: Am I hitting the important asset classes?

Post by retiredjg » Wed Oct 17, 2018 8:55 am

StarDolphin wrote:
Tue Oct 16, 2018 4:34 pm
Desired Asset allocation: Uhh, stocks?
This question is asking what you want your stock to bond ratio to be. This ratio determines most of the risk of your portfolio. It is the first and most fundamental decision to make about your portfolio.

Until you make this decision, you can't do anything other than wander around. Based on nothing other than your age, I'd suggest 80% stocks and 20% bonds. There are other factors - that is just a starting point for consideration.

Desired International allocation: I don't know
Opinions on this vary from none (0%) to about 50%. If you don't know but feel it is important to diversify with foreign stocks, just pick some middle number like 25% (1/4th of your stocks) or 30% (about 1/3rd of your stocks).
Vanguard (Investment) Funds:
Taxable:
1% VANGUARD ENERGY ETF (VDE) (0.10%) // This was an experiment when I was first getting started, never bothered to sell
Not sure about this fund - it might not be optimal for a taxable account. Either way, a 1% allocation to anything is just a nuisance.

8.5% Vanguard real Estate Index Fund Admiral Shares (VGSLX) (0.12%)
10.7% Vanguard High Dividend Yield Index Fund Investor Shares (VHDYX) (0.15%)
These two funds should NOT be held in a taxable account. They are not "tax-efficient" meaning they just cause you unnecessary taxes because they throw off dividends that are taxable each year. You need to sell these.

4.8% Vanguard Mid-Cap Index Fund Admiral Shares (VIMAX) (0.05%)
3.8% Vanguard Small-Cap Index Fund Admiral Shares (VSMAX) (0.05%)
16.1% Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) (0.04%)
11.5% Vanguard Value Index Fund Admiral Shares (VVIAX) (0.05%)
Unless you are intentionally tilting to value and mid/small cap, this is kind of a non-sensical collection in that the value stocks and mid cap stocks and small cap stocks are all included in the Total Stock Market. This is not urgent to fix, but could use improvement.

9.2% Vanguard Developed Markets Index Fund Admiral Shares (VTMGX) (0.07%)
Do you have a reason to hold only the developed markets and excluding the emerging markets? If not, this can be exchanged into Total International Index when the tax cost is not too high.
401K:
34.4% Vanguard Target Retirement 2055 Trust Select (Fund # 1683) (0.05%)
What bond funds are available in this work plan?


My Vanguard accounts are likely somewhere around 20% of my net worth. The rest is split between my house (45%) and Amazon.com stock (35% RSU grants I never sold.
A portfolio is not set up based on net worth. Your house is not included. What we are interested in are investable assets.

A high allocation to any individual stock is risky and a very poor choice. Since that is 35% of your net worth, it is actually 58% of your investable portfolio. That puts you in a very bad position unless you can actually afford to lose it and are willing to lose it. You need to aggressively get rid of this - get it down to no more than 10% of your portfolio (not net worth).

I've been trying to draw them down and move the money over to my vanguard mutual funds, but the combination of it being hard to get off a speeding train (dat stock price!)...
This will sound harsh, but that is greed talking. There are two things that get investors in trouble more than anything else. Greed and fear.

... and not being entirely sure if I'm doing the mutual fund thing right has stayed my hand there.
This is easily fixable.

I also have 11.8K in Wealthfront (10K experiment started in April of 2015. No additional fee until it hits 15K, its up 18% since then, not bad...?)
If Wealthfront is doing tax loss harvesting, you are probably having wash sales without even knowing it. Wealthfront appears to be a dabble - I doubt it is worth the trouble.



1. For the Taxable Vanguard account, does the distribution seem sensible? The only thing I've been thinking about recently is if I want to increase my international and/or developing market exposure.
It does not make a lot of sense and could use improvement. However, your Amazon stake is the elephant you need to address before anything else.
2. I've generally been trying to avoid any funds explicitly investing in tech due to my large Amazon.com stake, if I do end up selling that and moving it into funds, would it make sense to get some explicitly tech fund? I do work in tech, so my thoughts are i should be investing in industries that are not likely to be down when my home industry is down?
Tech stocks are represented in the total stock market. Holding that much is fine. Holding significantly more is not wise. When your industry goes through a down spell, both your income and your nest egg could be in danger at the same time. That is avoidable.


A good place for you to be learning starts here. https://www.bogleheads.org/wiki/Getting_started

You apparently are doing well in the savings department. You can do better at the investing part.

User avatar
jakehefty17
Posts: 36
Joined: Fri May 11, 2018 6:48 pm
Location: New York

Re: Am I hitting the important asset classes?

Post by jakehefty17 » Wed Oct 17, 2018 10:45 am

Welcome to the forum!

Your portfolio could use simplifying. Take time to develop your asset allocation based on your risk tolerance and financial objectives. Most bogleheads recommend a 3 portfolio, and generally around 30% of stock holdings in international. Gradually move towards your desired AA.
Read more here - https://www.bogleheads.org/wiki/Asset_allocation

If you have access to a 401k, IRA, or HSA you should be filling those buckets first. Tax efficiency will improve your returns over the long term. The REIT fund should be moved to a tax-deferred or Roth account if possible.
Read more here - https://www.bogleheads.org/wiki/Tax-eff ... _placement

Besides that, congratulations on having the drive to learn about investing! It can be tough to get started without someone guiding you, but this forum is a fantastic place to learn. To give solid advice, we need the entire picture when you ask questions here. If you have retirement accounts please include them!

Bogleheads investment philosophy:
1. Develop a workable plan
2. Invest early and often
3. Never bear too much or too little risk
4. Diversify
5. Never try to time the market
6. Use index funds when possible
7. Keep costs low
8. Minimize taxes
9. Invest with simplicity
10. Stay the course
"The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence." -Charles Bukowski

rkhusky
Posts: 5711
Joined: Thu Aug 18, 2011 8:09 pm

Re: Am I hitting the important asset classes?

Post by rkhusky » Wed Oct 17, 2018 11:31 am

StarDolphin wrote:
Tue Oct 16, 2018 4:34 pm
My main concern is if my fund allocation is either missing something I should be covering or if I'm in funds that appear to be diversified but are really overlapping :|
Vanguard Total Stock Market has pretty much all the US stocks. Vanguard Total International has pretty much all the International stocks. You don't need anything more than those for stocks.

Vanguard Total Bond has a mix of 65% government bonds and 35% corporate bonds, which cover those sectors. Missing are inflation protected bonds (TIPS) and municipal (tax exempt) bonds. The latter are only appropriate for a taxable account and with a higher tax bracket. Owning just Vanguard Total Bond is perfectly acceptable.

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