Roth IRA portfolio ideas

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rafkg29
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Roth IRA portfolio ideas

Post by rafkg29 » Tue Jun 04, 2019 1:20 pm

Thinking of creating a dividend portfolio in Roth IRA. So far I have the idea of holding VIG (Vanguard Dividend Appreciation) as well as VYM (Vanguard High Dividend Yield). Any other dividend etf recommendations to hold in Roth IRA?

bloom2708
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Re: Roth IRA portfolio ideas

Post by bloom2708 » Tue Jun 04, 2019 5:33 pm

There are numerous threads on dividend chasing.

Inside the Roth IRA, you are better off putting your highest risk/highest return funds there.

Total US and Total International provide ~2% dividends. Many use Small Cap Value and Emerging Market funds in Roth.

REIT funds also may have a place in your Roth. High Dividend funds tend to toss out all the stocks with no or a smaller dividend. Concentrating risk into a smaller pool of companies. I can't say they are better or worse. The returns are likely very similar to an S&P 500 index or Total US index fund.

My Roth has Total US + Total International (70/30 ratio). The total market return and 2% dividend return is good enough to meet my goals.

Hopefully others give their ideas.
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Day9
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Re: Roth IRA portfolio ideas

Post by Day9 » Tue Jun 04, 2019 6:17 pm

I presume your idea is to take advantage of the tax-advantaged nature of the Roth IRA and buy tax inefficient investments like high dividend yielding funds. Maybe the efficient market could price these with a 15% tax already baked in, and therefore by buying them in a Roth IRA you can get higher expected returns. But I don't think it works that way. I think the markets price these investments assuming there is no tax, but I do not know that for sure.
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Topic Author
rafkg29
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Dividend investing

Post by rafkg29 » Tue Jun 18, 2019 3:17 pm

[Thread merged into here, see below. --admin LadyGeek]

Thoughts on dividend investing in Roth IRA. so far I’m thinking of holding

45% SPHD,(invesco s&p 500 high dividend low volatility etf)

15% VYM (vanguard high yield etf),

15% VIG (Vanguard Dividend appreciation etf),

10% VCLT (Vanguard long term corporate bond etf)

10% VNQ (Vanguard real estate)

livesoft
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Re: Dividend investing

Post by livesoft » Tue Jun 18, 2019 3:18 pm

My thoughts have not changed. There is no point in specifically investing for dividends. Go for total return --- any day, all day.

What's your best no- or low-dividend portfolio? Now that will make me perk up and investigate. Thanks!
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Topic Author
rafkg29
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Dividend investing/ allocation

Post by rafkg29 » Tue Jun 18, 2019 3:19 pm

[Thread merged into here, see below. --admin LadyGeek]

Thoughts on dividend investing in Roth IRA. so far I’m thinking of holding

45% SPHD,(invesco s&p 500 high dividend low volatility etf)

15% VYM (vanguard high yield etf),

15% VIG (Vanguard Dividend appreciation etf),

10% VCLT (Vanguard long term corporate bond etf)

10% VNQ (Vanguard real estate)

123
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Re: Dividend investing

Post by 123 » Tue Jun 18, 2019 3:26 pm

If it's a Roth I would go all stocks. I suppose if you don't have sufficient Traditional IRA or 401K investment space you could use Roth space but to me the value of the Roth is long-term stock appreciation without taxation. Maybe if interest rates were a lot higher I would feel differently.
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LadyGeek
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Re: Roth IRA portfolio ideas

Post by LadyGeek » Tue Jun 18, 2019 3:28 pm

rafkg29 - In order to give appropriate advice, it's best to keep all the information in one spot. I merged your update back into the original thread. If you have any questions, ask them here.
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retiredjg
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Re: Dividend investing/ allocation

Post by retiredjg » Tue Jun 18, 2019 3:57 pm

Sorry, but this type of question cannot be answered intelligently without knowing what your portfolio looks like.

Just off the cuff, I can't see the need for this many funds in one account. And my guess is that you are chasing performance (what has done well in the past) rather than building a good portfolio. But that is just a guess. :happy

GLState
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Re: Dividend investing/ allocation

Post by GLState » Tue Jun 18, 2019 7:31 pm

Only totals to 95%. SPHD only holds 50 stocks. 40 (80%) of those are also in VYM. VIG holds 184 stocks ... 61 (33%) of those are in VYM. You're looking at funds with quite a bit of overlap.

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Re: Roth IRA portfolio ideas

Post by LadyGeek » Tue Jun 18, 2019 8:45 pm

rafkg29 - I merged your 2nd thread into here. Please keep all of your questions in this thread. Thanks.
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Dioremius
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Buy residential REITs to match future home purchase

Post by Dioremius » Tue Jun 18, 2019 9:57 pm

rafkg29, if you're saving to buy a home, then you could try to match your savings to your future liabilities by tilting towards residential REITs, and doing so in your Roth space because of REIT's tax inefficiency.

As I wrote in a recent post:
Dioremius wrote:
Tue Jun 11, 2019 5:01 pm
I would love to get exposure to residential real-estate now, to roughly match the future liability. Put otherwise, given my major real-estate purchase in the future, I'm effectively short real-estate now and would like to remedy that. [...]

[My Roth space is] filled up with residential REITs. No good ETF here: they all have high expense ratios, wrong composition and/or low liquidity. So I went over the stock holdings of the REZ Residential REIT ETF, filtered out the weird stuff like mobile homes, and bought the top dozen stocks weighted by market cap. I was hoping that home construction ETFs, like ITB and XHB, would be a good proxy for residential real estate, but the correlation seems low.
When time comes to buy your new home, don't withdraw from your Roth and lose that precious space. Instead, make your downpayment by selling securities from your taxable account, and rebalance by buying back the securities and selling the REITs within your Roth account.

The usual caveats of REITs apply, including the possibly low correlation between residential real estate nationwide and your specific neighborhood + property type, and interest-rate sensitivity working against you (if interest rates go up, your future mortgage will become more expensive but REITs prices will likely decrease).

Topic Author
rafkg29
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Joined: Tue Oct 09, 2018 1:07 pm

Re: Roth IRA portfolio ideas

Post by rafkg29 » Thu Jun 20, 2019 3:52 am

How about thoughts on just holding SPHD and maybe VNQ in Roth IRA?

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