Elementary Question

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TinyElvis
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Joined: Mon Jul 27, 2015 2:33 pm

Elementary Question

Post by TinyElvis » Sun Jan 10, 2016 11:19 pm

Good evening. For some reason I cannot get my brain to work tonight.

According to the Vanguard Portfolio Analysis, stocks make up 76.8% of all portfolios. This is then broken down as such:

76.4% - US Stock
23.6% - International Stocks

At the bottom of the page, it states that International Stock and Mutual Fund holdings make up 18.1% of all portfolios.

I cannot make the math work to come up with the 18.1% number. :?

If, for example, I wanted international stock to be 15% of my total portfolio (in a 70/30 portfolio), what percentage of my stock allocation would equal 15% of my total? 21%?

Feeling embarrassed.

DSInvestor
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Joined: Sat Oct 04, 2008 11:42 am

Re: Elementary Question

Post by DSInvestor » Sun Jan 10, 2016 11:54 pm

In a 70/30 stock/bond portfolio where International stocks is 15% of the whole portfolio implies the following:
30% bonds
15% International stocks
55% US stocks

In this AA, international as a percentage of stocks = 15 / (15 + 55) = 15 / 70 = 21%

IMO, it is easier to deal with % of total. It is really easy to know what your total portfolio is worth. If your portfolio is 100K, then your international should be 15K. If portfolio is 400K, your international should 60K.

Keep it simple.
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Coles
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Re: Elementary Question

Post by Coles » Mon Jan 11, 2016 12:00 am

76.8% x 23.6% = 18.1%

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TinyElvis
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Joined: Mon Jul 27, 2015 2:33 pm

Re: Elementary Question

Post by TinyElvis » Mon Jan 11, 2016 10:43 am

Thanks. I need to pick a better time of day (when my mind is working) to manage my finances. :oops:

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