Finally simplified. Looking for feedback on my lifelong portfolio.

[Outer Marker]

Small caps make up only 18% if the overall US stock market, SCV is half that, so 9%. You are allocating 30% to SCV that is one heck of a tilt towards SCV. You sure you want to tilt that strongly?

Yes.

Consider that carefully. Everyone read the studies 10 or 20 years ago what a great free lunch there was to be had in SCV if you had the stomach to hang on. The word is definately out, and I tend to think if anything that SCV has been over-hyped and over-bought. There is no free lunch. Its a bet against the largest and most successful companies in America. I finally, reluctantly, gave up on that flawed strategy earlier this year.

[manlymatt83]

Small caps make up only 18% if the overall US stock market, SCV is half that, so 9%. You are allocating 30% to SCV that is one heck of a tilt towards SCV. You sure you want to tilt that strongly?

Yes.

Consider that carefully. Everyone read the studies 10 or 20 years ago what a great free lunch there was to be had in SCV if you had the stomach to hang on. The word is definately out, and I tend to think if anything that SCV has been over-hyped and over-bought. There is no free lunch. Its a bet against the largest and most successful companies in America. I finally, reluctantly, gave up on that flawed strategy earlier this year.

hmm.

I definitely want some SLYV.

What if I increase my "play" allocation to 15% of my portfolio vs 10%, and put SLYV in there? That way, I'll only rebalance INTO slyv from other play investments, and out of SLYV into other play investments.

Then the remaining 85% will just be 3 fund + REIT.

[Outer Marker]

hmm.

I definitely want some SLYV.

What if I increase my "play" allocation to 15% of my portfolio vs 10%, and put SLYV in there? That way, I'll only rebalance INTO slyv from other play investments, and out of SLYV into other play investments.

Then the remaining 85% will just be 3 fund + REIT.

That sounds much more reasonable!

[manlymatt83]

hmm.

I definitely want some SLYV.

What if I increase my "play" allocation to 15% of my portfolio vs 10%, and put SLYV in there? That way, I'll only rebalance INTO slyv from other play investments, and out of SLYV into other play investments.

Then the remaining 85% will just be 3 fund + REIT.

That sounds much more reasonable!

Hm. So if I'm going to be doing that, then the question is -- where do I allocate my BRK.B holdings? Is that part of play too since it's an individual stock?

EDIT: I've answered my own question. Since I only ever want to own 100 shares of BRK.B, I'll make it part of my play.

[retiredjg]

Regarding VXUS -- because DGS/DLS were international and are now no longer part of that allocation. But that's where the additional 8% had come from.

Sorry, I had read that you wanted 30% of your stocks in international, but that was wrong.

But you may need to take a little out of the small cap value to get the international up to your target. The problem is you are trying to divey up your 84% in stocks into a lot of things. If you put 20% of it into international and 30% into small cap value and 10% into REIT....how much space does that leave for a core holding?

Maybe I was mis-representing how I want things divided. My ultimate goal was:

80% US, 20% International

US Split:
US REIT 10% allocation of US (8% overall)
US SCV 30% allocation of US (24% overall)
US TSM 60% allocation of US (48% overall)

International Split:
International SCV 30% allocation of International (6% overall)
International TSM 70% allocation of International (14% overall)

8 + 24 + 48 + 6 + 14 = 100%

Perhaps I'm misunderstanding....but it appears you have forgotten your bonds.

If your portfolio is 84% stock and 80% of it is US, that is 67.2% in US in the portfolio. 10% of that US allocation is is only 6.7% of the portfolio, not 8%. And so on.

[manlymatt83]

Regarding VXUS -- because DGS/DLS were international and are now no longer part of that allocation. But that's where the additional 8% had come from.

Sorry, I had read that you wanted 30% of your stocks in international, but that was wrong.

But you may need to take a little out of the small cap value to get the international up to your target. The problem is you are trying to divey up your 84% in stocks into a lot of things. If you put 20% of it into international and 30% into small cap value and 10% into REIT....how much space does that leave for a core holding?

Maybe I was mis-representing how I want things divided. My ultimate goal was:

80% US, 20% International

US Split:
US REIT 10% allocation of US (8% overall)
US SCV 30% allocation of US (24% overall)
US TSM 60% allocation of US (48% overall)

International Split:
International SCV 30% allocation of International (6% overall)
International TSM 70% allocation of International (14% overall)

8 + 24 + 48 + 6 + 14 = 100%

Perhaps I'm misunderstanding....but it appears you have forgotten your bonds.

If your portfolio is 84% stock and 80% of it is US, that is 67.2% in US in the portfolio. 10% of that US allocation is is only 6.7% of the portfolio, not 8%. And so on.

That split was just how I was handling my equity allocation. 16% is bonds.

Based on this thread (your awesome help among others), I have decided to just simplify my core portfolio to be 85% of overall:

16% BND / BNDX (120 - age)
84% Stocks:
- 8.4% VNQ
- 16.8% VXUS
- 58.8% VTI + some VOO in tax advantaged

Going to take remaining 15% for "play" -- SCV, individual stocks, etc. Am happy with this solution.

[Outer Marker]

That split was just how I was handling my equity allocation. 16% is bonds.

Based on this thread (your awesome help among others), I have decided to just simplify my core portfolio to be 85% of overall:

16% BND / BNDX (120 - age)
84% Stocks:
- 8.4% VNQ
- 16.8% VXUS
- 58.8% VTI + some VOO in tax advantaged

Going to take remaining 15% for "play" -- SCV, individual stocks, etc. Am happy with this solution.

Certainly not unreasonable, but the bond allocation is quite light. Pushing VTI and VNQ down a bit to bring you to 70/30 doesn't give up much in terms of expected returns, gives you a gentler ride, and presents more potential rebalancing opportunities. https://personal.vanguard.com/us/insigh ... llocations BRK.B is not so much an individual stock, but a large value mutual fund run by Buffet.

[manlymatt83]

That split was just how I was handling my equity allocation. 16% is bonds.

Based on this thread (your awesome help among others), I have decided to just simplify my core portfolio to be 85% of overall:

16% BND / BNDX (120 - age)
84% Stocks:
- 8.4% VNQ
- 16.8% VXUS
- 58.8% VTI + some VOO in tax advantaged

Going to take remaining 15% for "play" -- SCV, individual stocks, etc. Am happy with this solution.

Certainly not unreasonable, but the bond allocation is quite light. Pushing VTI and VNQ down a bit to bring you to 70/30 doesn't give up much in terms of expected returns, gives you a gentler ride, and presents more potential rebalancing opportunities. https://personal.vanguard.com/us/insigh ... llocations BRK.B is not so much an individual stock, but a large value mutual fund run by Buffet.

Based on my formula, I'll be 70/30 in 14 years (at age 50), which makes me comfortable. Up until last month I didn't hold any bonds and I did not sell anything on the way down from SPY 3380 to 2200 ... but I did decide I wanted to add a little bit of bonds. I think this is a happy medium.

I'll still keep BRK.B in my "play" because I only own 100 shares and don't plan to add more or sell -- just hold forever. Doesn't really make sense for me to try to factor it into my "core" allocation as if I'll reinvest dividends from it (if any) into other "play" only.