18 Year Old Portfolio [ADVICE PLEASE]

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investingforbank
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Joined: Tue Jan 12, 2021 8:28 pm

18 Year Old Portfolio [ADVICE PLEASE]

Post by investingforbank »

I'm 18 and currently I'm 100% equities (I will add in bonds when I'm older) and this is my portfolio. I am doing a 60/40 US/Int'l with a 20% tilt to SCV and EM in both. Thoughts?

Total US Stock Market Index Fund (FSKAX): 50%
Small Cap Value Index Fund (FISVX) : 12%
Total International Stock Market Index Fund (FTIHX): 30%
Emerging Markets Index Fund (FPADX): 8%
alex_686
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Re: 18 Year Old Portfolio [ADVICE PLEASE]

Post by alex_686 »

Welcome to the forum.

How does this asset allocation fit with your Investment Portfolio Statement? Market Expectations, goals, risk tolerance, etc.

https://www.bogleheads.org/wiki/Investm ... _statement

I could quibble with the allocation - in particular the EM or the lack of bonds - but it would be in a vacuum. The allocation should maximize the chance of reaching your goals. Without that there is no context.

I think the logic of SCV is off, but that is my opinion - it is a legitimate point for debate. Not sure why you are adding EM, but it is not as growth orientated as you think and it has a high correlation with global tech spending.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
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tcb1005
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Re: 18 Year Old Portfolio [ADVICE PLEASE]

Post by tcb1005 »

Hello,
I am only a few years older than you, and your portfolio seems pretty good. My taxable portfolio for instance is roughly:
80% Schwab Total Stock Market Index (SWTSX)
20% iShares Total International stock market index (IXUS)

and my 401K through my employer is
20% Dimensional funds Government intermediate bond fund (DFIGX)
16% TIAA International Stock Market Index (TCIEX)
64% TIAA S&P 500 Index (TISPX)

So as you can see, your portfolio is not that far off from mine. If this is in a taxable account, I would urge you to wait to purchase bonds until your employer offers you a retirement account, or you open an IRA. The only critique I would offer is that there is no guarantee emerging markets will outperform the total international stock market index, just as there is no guarantee small cap value will outperform the total US market. Of course, I don't perfectly follow the Bogle approach as I still have a bit left in an active Morgan Stanley global equity fund that I don't want to completely sell yet because it has appreciated over 50% in a year and the fund recently closed to new investors. :happy
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Taylor Larimore
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Post by Taylor Larimore »

investingforbank wrote: Tue Jan 12, 2021 8:29 pm I'm 18 and currently I'm 100% equities (I will add in bonds when I'm older) and this is my portfolio. I am doing a 60/40 US/Int'l with a 20% tilt to SCV and EM in both. Thoughts?

Total US Stock Market Index Fund (FSKAX): 50%
Small Cap Value Index Fund (FISVX) : 12%
Total International Stock Market Index Fund (FTIHX): 30%
Emerging Markets Index Fund (FPADX): 8%
investingfor bank:

Welcome to the Bogleheads Forum!

I like the simplicity of your portfolio but I believe it can be improved:

* Consider eliminating FISVX for simplicity (and probably better performance). The market weight in FISVX Small Cap Stocks is already in your Total U.S. stock market index fund.

* You have 38% in International Stocks. Jack Bogle who knows more than we do, suggests not more than 20% international. Two reasons (there are more): (1) About 50% of U.S. stock returns are from their international sales. (2) We invest and spend in U.S dollars. Why take on currency risk?

* 8% of emerging markets is almost meaningless. Strive for simplicity.

* It is notable that Mr. Bogle has been right about international stocks for many years.

Consider The Bogleheads' Three-Fund Portfolio

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "There may be better investment strategies than owning just three broad-based index funds but the number of strategies that are worse is infinite."
"Simplicity is the master key to financial success." -- Jack Bogle
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abuss368
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Re: 18 Year Old Portfolio [ADVICE PLEASE]

Post by abuss368 »

investingforbank wrote: Tue Jan 12, 2021 8:29 pm I'm 18 and currently I'm 100% equities (I will add in bonds when I'm older) and this is my portfolio. I am doing a 60/40 US/Int'l with a 20% tilt to SCV and EM in both. Thoughts?

Total US Stock Market Index Fund (FSKAX): 50%
Small Cap Value Index Fund (FISVX) : 12%
Total International Stock Market Index Fund (FTIHX): 30%
Emerging Markets Index Fund (FPADX): 8%
Welcome to the forum!

I would focus on simplicity. What is simple will work. Emerging Markets are already included in Total International Stock so this is a duplicate and overweight. I would also pass on Small Cap, which are included in Total Stock at market weight.

I agree that you can add bonds in the years ahead.

Tony
John C. Bogle: “Simplicity is the master key to financial success."
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