What's your asset allocation and why?

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freyj6
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What's your asset allocation and why?

Post by freyj6 » Fri Jul 08, 2016 1:18 pm

Given all the ideas floating around here (and the contention between "lazy" portfolios and more complicated approaches) I'm curious as to what everyone's portfolios actually look like.

Do like keep it as simple as possible? Do you try to be as diversified as possible? Do you tilt? Do you intentionally not tilt?

More simply: what do you actually hold? And why?

I'll go first.

---------------------------------------------------------

Age: 28
Account: Vanguard Roth IRA

US Stock: 65%
International Stock: 35%
Bond: 0%

Average expense ratio: 0.115%

Holdings:

15% VBR (small cap value)

I think the value premium is robust and more so for small and mid-cap stocks. I believe small value is likely to outperform the total market over the next 10 or 15 years.

15% VOE (mid cap value)

Same as above. Also, despite all the hype about small value, mid cap value has outperformed small value in 20 of the last 25 five year periods. A 50/50 split seems prudent to me.

25% MTUM (momentum)

Momentum seems to be the strongest and most persistent factor, and I think MTUM is a good way to capture it. It has also been suggested that even if the momentum premium were to go to zero, it would still be worthwhile because of its low correlation with value.

10% VDC (consumer staples)

I think that consumer staples are likely to at least match the broad market return, and given their low volatility, are likely to contribute a rebalancing bonus with the other highly-volatile funds I hold.

20% VWO (emerging markets)

I think that the very high historical returns and low valutations make EM attractive, especially considering my goals.

15% VEA (developed markets)

Given the valuations, I believe international indexes will likely outperform US over the next 10 or 15 years.

--------------------------------------------------

Overall, my goal is to maximize expected return over the next 20-30 years. As such, I've attempted to split between my portfolio between factors that I believe are robust, without going all in on any one thing.

I plan to stay more or less passive, but will make adjustments if valuations change dramatically.

:)

azanon
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Re: What's your asset allocation and why?

Post by azanon » Fri Jul 08, 2016 1:33 pm

15% TSP S fund (Dow completion index)
20% TSP I fund (EAFE index)
20% G Fund (~11yr treasuries with 0 duration)
10% VFSVX (Int small cap)
5% GVAL (Int deep small/mid value)
15% VSIGX (IT gov bond)
7.5% IAU (Gold)
7.5% PDBC (commodities broad basket).
So 50/35/15. Weighted ER is 0.16%

Why? I'm aiming for high risk adjusted return, with an emphasis on a higher Sharpe ratio, and a portfolio that should be robust in most investing climates. S fund vs. C because less amount of S fund gives me the same return as C, but let's me up my bonds for stability (see Larry Portfolio). I'm also tilting heavy to foreign due to valuations. Tilt to small due to outperformance. Use treasuries/Gov bonds because max uncorrelation to the equities. The 15% alternatives also backtest by lowering volatility and increasing return (relative to just more bonds).

Rebalancing using 20% thresholds.

.....

OP, I do like your portfolio, or should I say your equities. But you should consider at least 10-20% bonds and/or alternatives. You'd hardly affect the expected return, but would really lower expected volatility. I'm 44, and I can attest that it's mostly a marathon, not a sprint.

jjface
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Re: What's your asset allocation and why?

Post by jjface » Fri Jul 08, 2016 1:40 pm

Just a note that VBR is already 2:1 Small cap: mid cap so you are going heavier to mid cap value by going 50:50 VBR:VOE. More like 33:67 small cap to mid cap with that mix.

If you want 50:50 you probably need 75% VBR and 25% VOE.

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Toons
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Re: What's your asset allocation and why?

Post by Toons » Fri Jul 08, 2016 1:41 pm

70/30
Why?
You Ask.
I "Sleep Well"
:mrgreen: :mrgreen:
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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Phineas J. Whoopee
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Re: What's your asset allocation and why?

Post by Phineas J. Whoopee » Fri Jul 08, 2016 1:43 pm

I've made no secret that I'm presently, and for the foreseeable future, at 40/60. I can reach my financial goals without taking more equity risk, so I've chosen not to. If my portfolio real return is zero percent, my plan will work.

Examining my own situation I determined the biggest long-term financial risk I face is inflation, therefore I've allocated accordingly. All stocks and much of the fixed income are indexed.

25% US equity / 15% international equity / 40% inflation-linked fixed income / 20% nominal fixed income.

My longer-term asset allocation plan, which brought me to this point, is something I explained here. A couple of years later I answered some questions about it in the same thread, starting here.

PJW

azanon
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Re: What's your asset allocation and why?

Post by azanon » Fri Jul 08, 2016 1:44 pm

Toons wrote:70/30
Why?
You Ask.
I "Sleep Well"
:mrgreen: :mrgreen:


Ha, i read a post of yours not too long ago about your admitted higher risk tolerance. I'm mostly jealous of that (not sarcasm). I'd be a nervous wreak with a 70/30, retired.

freyj6
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Re: What's your asset allocation and why?

Post by freyj6 » Fri Jul 08, 2016 1:46 pm

jjface wrote:Just a note that VBR is already 2:1 Small cap: mid cap so you are going heavier to mid cap value by going 50:50 VBR:VOE. More like 33:67 small cap to mid cap with that mix.

If you want 50:50 you probably need 75% VBR and 25% VOE.


Interesting, I'll keep that in mind. Although, considering valuations are the same and midcaps have outperformed for 30 years, I'm not sure I'm too upset by that.

@Toons - As in 70% stock, 30% bond? So something like 40% VTI, 30% VEA and 30% BND? Or something more complicated?

freyj6
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Re: What's your asset allocation and why?

Post by freyj6 » Fri Jul 08, 2016 1:48 pm

Phineas J. Whoopee wrote:I've made no secret that I'm presently, and for the foreseeable future, at 40/60. I can reach my financial goals without taking more equity risk, so I've chosen not to. If my portfolio real return is zero percent, my plan will work.

Examining my own situation I determined the biggest long-term financial risk I face is inflation, therefore I've allocated accordingly. All stocks and much of the fixed income are indexed.

25% US equity / 15% international equity / 40% inflation-linked fixed income / 20% nominal fixed income.

My longer-term asset allocation plan, which brought me to this point, is something I explained here. A couple of years later I answered some questions about it in the same thread, starting here.

PJW


Cool. Do you split it up at all, or just the total market indexes for each?

notsobright
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Re: What's your asset allocation and why?

Post by notsobright » Fri Jul 08, 2016 1:50 pm

twice as much bonds as equities

twice as much US as INTL

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Toons
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Re: What's your asset allocation and why?

Post by Toons » Fri Jul 08, 2016 1:51 pm

azanon wrote:
Toons wrote:70/30
Why?
You Ask.
I "Sleep Well"
:mrgreen: :mrgreen:


Ha, i read a post of yours not too long ago about your admitted higher risk tolerance. I'm mostly jealous of that (not sarcasm). I'd be a nervous wreak with a 70/30, retired.


35 -40 years of investing and experiencing all the market cycles, makes 70/30 a comfortable zone for me.
As I have posted quite a few times before.
My brain works the opposite of most investors.
When the market goes down...
I open the wallet.
When it goes down triple digits
I call it a RGD-Really Good Day
It appears to me that today is not going to be a....
RGD :mrgreen: :mrgreen:
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

azanon
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Re: What's your asset allocation and why?

Post by azanon » Fri Jul 08, 2016 1:53 pm

notsobright wrote:twice as much bonds as equities

twice as much US as INTL


A cool math problem. Let me try:

22.3% VTI, 11.3% VXUS, 66.6% BND?

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Phineas J. Whoopee
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Re: What's your asset allocation and why?

Post by Phineas J. Whoopee » Fri Jul 08, 2016 2:03 pm

freyj6 wrote: ... Do you split it up at all, or just the total market indexes for each?

Total market indices for US and international. I consciously overweight US at 60% of equity, to take account of the fact I expect to retire in the US and spend in US dollars. I have no strong reasoning for using 40%, rather than 30% or 50%. I think it will, in the context of my overall portfolio and life situation, get the job done.

It's more advantageous to stick to a good-enough asset allocation than to continually churn in search of a perfect one.

PJW

Rodc
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Re: What's your asset allocation and why?

Post by Rodc » Fri Jul 08, 2016 2:44 pm

We do not need a great deal of growth, so no need to take a lot of risk.

We can handle a lot of risk as we have two pensions to provide a floor of income.

We would like enough to travel and indulge in some luxuries.

Stocks for very rational reasons should in the long run provide better returns than bonds.

But stocks may not beat bonds in the short, or even intermediate, or even the long run so don't want to bet on them 100%

Something in the middle seems to make sense, but with a nod to the likely better performance of stocks and ability to (and practice at) handle risk we picked 60/40 (for many years was more like 70/30).

Now < 5 years out from retirement. Do not expect any large chance going forward but will monitor our situation and adjust if we feel it is warranted.

I should add we have a small value tilt. I am less convinced of its value now simply because I have less confidence in the data behind it and in the ability of fund companies to capture the premium if it exists, but I also have not seen any compelling reason to jump ship and I feel it is best to just follow a steady course unless there is a compelling reason to change. We also have a fairly high allocation to international stocks as there are many fine companies outside of the US and I can invest in them at very low cost so I do not see much value in a heavy US tilt (though currency risk is real and factored into the thinking).
Last edited by Rodc on Fri Jul 08, 2016 2:49 pm, edited 1 time in total.
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.

Dandy
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Re: What's your asset allocation and why?

Post by Dandy » Fri Jul 08, 2016 2:48 pm

I'm retired age 68 and am lucky to have "enough" so my overall allocation is currently about 42% equities and 58% fixed income. I generally follow Dr. Bernstein's idea of having 20-25 years worth of retirement draw down in "safe' fixed income.

I tilt with Small Cap Index (stopped adding) and FTSE International funds (will add more).

My TIRA is invested in (about 25/75)
1. Balanced Index, Wellesley Income (to cover allocations to equities and intermediate bonds)
2. the TIPS fund to cover unexpected inflation
3. Short Term Bond Index, Short Term Investment Grade
4. Brokerage CD ladder

My Taxable is invested in: (about 67/23)
1. Total Stock Market
2. FTSE International ex US
3. Small Cap Growth
4. Ltd Term and Intermediate Term Tax exempt
5. Savings/cash

When I collect SS in 18 months I will probably allocate more to equities/intermediate bonds due to a higher income floor which requires less "safe" assets to fund 20 years of retirement expenses and RMDs from a fixed income heavy TIRA will tend to push equity allocation higher.

CoAndy
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Re: What's your asset allocation and why?

Post by CoAndy » Fri Jul 08, 2016 3:50 pm

My 401(k) is in Vanguard 2035, which breaks down as:
48.74% Total Stock Market
32.38% Total International
13.02% Total Bond
5.83% International Bond

As this has a higher international allocation than I would like, I lowered the international exposure in my 457, which is as follows:

48.74% VINIX (Vanguard Inst. Index)
11.08% HAINX (Harbor International)
12.07% FIJEX (Frost Total Bond)
11.82% VAIPX (Vanguard TIPS)
21.98% Stable Value Fund

The 457 comes out at 54.13% stocks and 45.81% fixed income.

I am slowly decreasing the fixed income allocation to 40%.

Bacchus01
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Re: What's your asset allocation and why?

Post by Bacchus01 » Fri Jul 08, 2016 3:53 pm

80/20 is goal

Right now it's 84/16. Have some rebalancing to do.

Why? Because I can.

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friar1610
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Re: What's your asset allocation and why?

Post by friar1610 » Fri Jul 08, 2016 3:59 pm

40/55/5 at ages 71/70. 20-25% of equities in international. Essentially a classic VG 3 fund port although fixed includes a chunk of I-bonds and some CDs. IRAs are 100% VG Total Bond although I've been considering converting about 15% of IRAs to equity either via VG Total Stock Index or Wellesley (which would also effect bond mix.) This would raise overall equities to 45%.) Won't do that unless equity prices drop a bit. (Yes, I know that's market timing.) Inflation protection mainly comes from SS and military pension.

Why? No real need for great risk/growth as pension/SS covers all but extraordinary expenses. But don't want port to lose out to inflation either.
Friar1610

shantster
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Re: What's your asset allocation and why?

Post by shantster » Fri Jul 08, 2016 4:01 pm

50% US stock, 25% international stock, 25% total bond index

Why?
1. It's easy to remember and implement - tilting is too much mental work for me.
2. It fits my risk tolerance.

I'm aggressively paying off student loans as well (started one year fellowship post-residency this month so it will get more aggressive in a year). As soon as my student loans are gone, which I anticipate in 2-3 years from now, I'm adjusting to 50% US stock, 20% international stock, 30% total bond index to decrease risk. Why that exact breakdown? Same reasons as above.

caliguy1
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Re: What's your asset allocation and why?

Post by caliguy1 » Fri Jul 08, 2016 4:11 pm

Core Equities:
18% VTI [My primary residence is in the US which is a bigger chunk than all of my equities combined & 90%+ correlated to VTI so I don't feel the need to overdo it with US exposure.]
15% VEA [For diversification]
20% VWO [emerging markets is roughly the same GDP as the US, ~1/4 the market cap, 10x the population. where do you think the best returns are going to be in the next 20 years?]

Alternatives:
4% Gold miners
3% Private equity

Fixed Income & Cash:
23% CDs
5% 20+ year treasury bonds (TLT) [For rebalancing]
12% Cash
Last edited by caliguy1 on Fri Jul 08, 2016 4:26 pm, edited 3 times in total.

boglephreak
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Re: What's your asset allocation and why?

Post by boglephreak » Fri Jul 08, 2016 4:12 pm

desired: 70:20:10 (US, Int'l, Bond)

current (approx): 75:10:15 (S&P 500 (401k), TISM (taxable), Bond (401k))

deciding whether to add small-cap to taxable to offset large cap weight from S&P 500 and TISM.

why? -- we are young (35/28) and have lots of growth ahead of us. debated whether to go to 100% equity, but ended up at 90:10.

itstoomuch
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Re: What's your asset allocation and why?

Post by itstoomuch » Fri Jul 08, 2016 4:14 pm

In our Discretionary, We do a lot of stuff and strategy. Currently, fairly conservative @60% cash with speculative stocks and Indexes @ 40%. Holdings can vary weekly.
see below notes
Rev90517; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax 25%. Early SS. FundRatio (FR) >1.1 67/70yo

Ron Ronnerson
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Re: What's your asset allocation and why?

Post by Ron Ronnerson » Fri Jul 08, 2016 4:40 pm

Age 41
Approximately 50% total U.S., 30% total international, 20% bond

I'm fairly aggressive due to having a relatively high risk tolerance, being a couple of decades away from retirement, and expecting a pension that should cover most of my expenses in retirement.

kolea
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Re: What's your asset allocation and why?

Post by kolea » Fri Jul 08, 2016 4:44 pm

Retired, age 65.

55% US TSM
8% International equities.
35% Bonds - mostly Agg index, but some GNMA, Muni's and corporates.
2% Cash

Why? I fear inflation more than bear markets.
Kolea (pron. ko-lay-uh). Golden plover.

soboggled
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Re: What's your asset allocation and why?

Post by soboggled » Fri Jul 08, 2016 4:50 pm

kolea wrote:Retired, age 65.

55% US TSM
8% International equities.
35% Bonds - mostly Agg index, but some GNMA, Muni's and corporates.
2% Cash

Why? I fear inflation more than bear markets.

Then why not inflation protected securities?
63% equities in retirement? [OT comment removed by admin LadyGeek]

LateStarter1975
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Re: What's your asset allocation and why?

Post by LateStarter1975 » Fri Jul 08, 2016 4:54 pm

Toons wrote:
azanon wrote:
Toons wrote:70/30
Why?
You Ask.
I "Sleep Well"
:mrgreen: :mrgreen:


Ha, i read a post of yours not too long ago about your admitted higher risk tolerance. I'm mostly jealous of that (not sarcasm). I'd be a nervous wreak with a 70/30, retired.


35 -40 years of investing and experiencing all the market cycles, makes 70/30 a comfortable zone for me.
As I have posted quite a few times before.
My brain works the opposite of most investors.
When the market goes down...
I open the wallet.
When it goes down triple digits
I call it a RGD-Really Good Day
It appears to me that today is not going to be a....
RGD :mrgreen: :mrgreen
:


Sounds contrarian ..... and I love it!
Debt is dangerous...simple is beautiful

GoldenFinch
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Re: What's your asset allocation and why?

Post by GoldenFinch » Fri Jul 08, 2016 4:56 pm

Age 49.

50% Large Cap
17% Mid and Small Cap
10% International
23% Bonds

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midareff
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Re: What's your asset allocation and why?

Post by midareff » Fri Jul 08, 2016 5:21 pm

age 68.5 and 5 years retired. 40% equities split 70/30 US/Int.. 56% bonds .. 23% IT Tax-Ex in taxable, 22% IT Corp Index, 8% HY and 4% GNMA all in in IRA, balance of roughly 3% in bank cash. Pension and SS pay all the bills.. portfolio pays (nicer) International travel and luxury stuff. The why is easy... my need and willingness to take risk has all but evaporated and at 40/57/3 it really doesn't matter much to me what the market does.

minesweep
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Re: What's your asset allocation and why?

Post by minesweep » Fri Jul 08, 2016 5:43 pm

You can find more responses from this earlier posting:

What is your current Asset Allocation Policy and why?

Grogs
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Re: What's your asset allocation and why?

Post by Grogs » Fri Jul 08, 2016 6:53 pm

43 here.

I'm at 80% stocks, 20% bonds/cash. Stocks are 33% international.

My holdings in my Roth and taxable accounts are Vanguard Total Stock Market and Total International Stock Market. In my 401k, US stocks are divided 80:20 between an S&P 500 fund and a small/mid cap fund. All of my bonds are in an intermediate bond fund in the 401k. My HSA is all cash for now until it reaches the threshold where I can begin to invest it.

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BostonBoy
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Re: What's your asset allocation and why?

Post by BostonBoy » Fri Jul 08, 2016 8:31 pm

Retired age 65, 50:50.

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fizxman
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Re: What's your asset allocation and why?

Post by fizxman » Fri Jul 08, 2016 9:21 pm

My 401k was Vanguard Target Retirement 2045 Fund Investor Shares (VTIVX) with an ER of 0.16% which comprises

Vanguard Total Stock Mkt Idx Inv - 54.04%
Vanguard Total Intl Stock Index Inv - 35.93%
Vanguard Total Bond Market II Idx Inv - 6.91%
Vanguard Total Intl Bd Idx Investor - 3.08%

This was because it was cheap and easy


But since my company was bought, as of July 1st, my 401k provider switched from Vanguard to Fidelity. Now it's

Fidelity® 500 Index Fund Investor Class - 55% (ER = 0.045%)
Fidelity® International Index Fund Premium Class - 35% (ER = 0.08%)
Fidelity® U.S. Bond Index Fund Premium Class - 10% (ER = 0.05%)

with a weighted ER = 0.05775%. This is because these three (plus Fidelity® Extended Market Index Fund - Premium Class - FSEVX) are the only index funds out of the 33 from which I have to choose; the rest are all managed funds. The equivalent Fidelity Target Retirement 2045 Fund (Fidelity Freedom K® 2045 Fund - FFKGX) has an ER of 0.67% and I wasn't about to choose that nonsense.

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njboater74
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Re: What's your asset allocation and why?

Post by njboater74 » Fri Jul 08, 2016 9:23 pm

70/30.

Looking to retire in about 15 years. Over that time span, the expected growth difference between 70/30, 80/20, and 90/10 didn't seem so significant.
When the mob and the press and the whole world tell you to move, your job is to plant yourself like a tree beside the river of truth and tell the whole world - 'No, YOU move'--Captain America, Boglehead

rattlenap
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Re: What's your asset allocation and why?

Post by rattlenap » Fri Jul 08, 2016 9:26 pm

90/10 AA

90% Vanguard 500

10% Nominal Bonds, iBonds, and Cash

I like the 90/10 because I am very aggressive and am immune to the volatility.

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Toons
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Re: What's your asset allocation and why?

Post by Toons » Fri Jul 08, 2016 9:29 pm

LateStarter1975 wrote:
Toons wrote:
azanon wrote:
Toons wrote:70/30
Why?
You Ask.
I "Sleep Well"
:mrgreen: :mrgreen:


Ha, i read a post of yours not too long ago about your admitted higher risk tolerance. I'm mostly jealous of that (not sarcasm). I'd be a nervous wreak with a 70/30, retired.


35 -40 years of investing and experiencing all the market cycles, makes 70/30 a comfortable zone for me.
As I have posted quite a few times before.
My brain works the opposite of most investors.
When the market goes down...
I open the wallet.
When it goes down triple digits
I call it a RGD-Really Good Day
It appears to me that today is not going to be a....
RGD :mrgreen: :mrgreen
:


Sounds contrarian ..... and I love it!


:sharebeer
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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grabiner
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Re: What's your asset allocation and why?

Post by grabiner » Fri Jul 08, 2016 9:58 pm

Age 48

96% net equities (decreasing by 2% per year, started from 100% two years ago)

43% US stock (1/8 LG, 3/8 LV, 1/8 SG, 1/8 SV)
43% foreign stock (3/8 developed large, 1/4 developed small, 1/4 emerging large, 1/8 emerging small; would be equal if expenses were equal)
10% REITs (1/2 US, 1/2 foreign)
4% net bonds (16% bonds, -12% mortgage)

I count the mortgage as a negative bond. If I decide to pay off the mortgage, I will pay it off with bonds (selling taxable stock, and moving from bonds to stock in the retirement account). If you don't count the mortgage as a negative bond, I have 85% stock.

Yes, I have one of the most aggressive portfolios on the Bogleheads, but I have a very high risk tolerance. I have had close to this portfolio since 2004, although I was only 100% net stock just after buying a home in 2013 (which increased my risk tolerance even further, since it will decrease my housing costs in retirement).
David Grabiner

NMJack
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Re: What's your asset allocation and why?

Post by NMJack » Fri Jul 08, 2016 11:47 pm

njboater74 wrote:70/30.

Looking to retire in about 15 years. Over that time span, the expected growth difference between 70/30, 80/20, and 90/10 didn't seem so significant.


You need to work on your math.... :sharebeer

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Gort
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Re: What's your asset allocation and why?

Post by Gort » Sat Jul 09, 2016 12:02 am

40% TSM Index
30% Total Bond Index
20% Total International Stock Index
10% Total International Bond Index
(all admiral shares)

60/40 Overall portfolio. Similar to Life Strategy Moderate Growth.
Retiring this year. No plans to change from 60/40.
If I get tired of rebalancing or screw it up too much I'll move it all over to Life Strategy Moderate Growth.

mpsz
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Re: What's your asset allocation and why?

Post by mpsz » Sat Jul 09, 2016 12:19 am

I'm in my mid-late 20's and follow "110 minus age" in equities. Equities is 70% in US, 20% in International, and 10% REITs.

I think I would be comfortable with a 100% equities portfolio. But I'm young and haven't experienced a bear market or crash so I can't be 100% certain how I would act. The minor corrections this past year were somewhat exciting (I bought more and learned that the talking heads had no idea what they were talking about), and I'd like somewhere to rebalance from if needed.

Flav
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Re: What's your asset allocation and why?

Post by Flav » Sat Jul 09, 2016 12:25 am

Great Post Idea, I was just going to post the same thing. I am 33, with a very stable job (military), 6-month emergency fund and a working wife (no kids).

Current Allocation:
Stocks Mostly S&P 500-Based Index mirroring funds-61.5%
International Index Funds-27.4%
Bonds-4.2%
Cash-6.9%

My ideal allocation is:
Stocks Mostly S&P 500-Based Index mirroring funds-50%
International Index Funds-20%
Bonds-30%

I am trying to get it rebalanced now.
“It is not necessary to do extraordinary things to get extraordinary results.” -WB

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wizzard
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Re: What's your asset allocation and why?

Post by wizzard » Sat Jul 09, 2016 1:07 am

Total US----------60%
US Bond----------25%
REIT---------------10%
International---5%

Cash-----Roughly 8mo. salary saved up

Simple, and I do not care what the market does.
As I age, the bond allocation will go up, re-balance annually, DCA, and STAY WITH IT :sharebeer
"In uncertain times, show equanimity. Otherwise you are an unfit shareholder" -Charlie Munger

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catdude
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Re: What's your asset allocation and why?

Post by catdude » Sat Jul 09, 2016 1:28 am

I'm close to 61, been retired about six years now. I have a lot of inertia... well, OK, I'm lazy... that's why the lazy portfolio appeals to me. My allocation is 47% stocks / 53% fixed income. The stocks are essentially all in Vanguard total market index, and the fixed income is primarily in Vanguard total bond index, with a small chunk in the prime money market fund. I don't feel the need to have anything in international stocks -- I'm taking Jack Bogle's advice on that. It's a fairly conservative AA but I've got a pension that covers my usual expenses so I haven't felt the need to take more risk. That said, I have to admit I've been toying with the idea of bumping up my stock allocation to 50 or 55%... which probably won't make a huge difference in the long run.
Last edited by catdude on Sat Jul 09, 2016 2:21 am, edited 1 time in total.
catdude | | “The holy passion of Friendship is of so sweet and steady and loyal and enduring a nature that it will last through a whole lifetime, if not asked to lend money.” (Mark Twain)

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wander
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Re: What's your asset allocation and why?

Post by wander » Sat Jul 09, 2016 1:43 am

Currently at 80/20 (equity/bonds) but adjust steadily as time goes. I sleep well not thinking about Brexit or whatever happened in the market.

QuietProsperity
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Re: What's your asset allocation and why?

Post by QuietProsperity » Sat Jul 09, 2016 1:57 am

Age : 28

50% EM (VWO)
15% DM (VEA)
15% Intl SC (VSS)
20% US SCV (IJS)

40+ years of work ahead of me (Probably til 70 or so...I like the career path I have chosen very very much).

Volatility doesn't scare me too much & I believe in LT value metrics. Not the most ideal community for that statement or strategy :D but it's what I believe in and know I will stick to.

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whodidntante
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Re: What's your asset allocation and why?

Post by whodidntante » Sat Jul 09, 2016 1:57 am

As of tonight:
22.42% Ex-US Stock
44.26% US Stock
1.94% Fixed Income
0.53% Cash (I added slightly to this in tonight's poker game) :mrgreen:
30.85% Real estate

My Ex-US has an EM tilt, and my US Stock has an SCV tilt.

I don't really have an emergency fund in cash, but I do have untapped credit that is more than 2 year's income. This is in the form of margin credit, a HELOC, 401k loan, and credit cards. I'm comfortable that this will cover 6 months of expenses even if all hell is breaking loose.

Some wouldn't sleep with this portfolio, but I have gotten along with it. Cheers. :sharebeer
Last edited by whodidntante on Sat Jul 09, 2016 2:34 am, edited 1 time in total.

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stemikger
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Re: What's your asset allocation and why?

Post by stemikger » Sat Jul 09, 2016 2:21 am

freyj6
Given all the ideas floating around here (and the contention between "lazy" portfolios and more complicated approaches) I'm curious as to what everyone's portfolios actually look like.

Do like keep it as simple as possible? Do you try to be as diversified as possible? Do you tilt? Do you intentionally not tilt?

More simply: what do you actually hold? And why?


Age 52 my wife is 56.

My AA is 65/35 - 65% in the Vanguard Institutional Index Fund and 35% in the Blackrock U.S. Debt Index Fund.

Why? I also like to Sleep well at night and this is the AA that enables me to do that.

In retirement, my plan is to roll it over all in the Vanguard Balanced Index Fund - 60/40 and the ultimate in simplicity.

No international other than what I get indirectly through the multinationals in the S&P.
Last edited by stemikger on Mon Jul 11, 2016 1:44 pm, edited 1 time in total.
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!

JCE66
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Re: What's your asset allocation and why?

Post by JCE66 » Sat Jul 09, 2016 6:36 am

Overall allocation in 401K + Roth IRA

US Index funds: 58%
Intl Index funds: 25%
Bond index funds: 17%

Broken out in this manner (split between 10 funds)

Portfolio Allocation Current
Large Cap 15.5% (FXSIX, FUSEX)
Mid-Cap 27.4% (FSEVX, FSEMX)
Small-Cap 7.6% (FSSPX)
REIT 7.7% (FRXIX)
Int'l 24.6% (FSIVX, FSGUX)
Bond 17.2% (FSITX, FBIDX)

Why this allocation? Mostly diversification, but I have a glide path outlined in my IPS that will ramp up bonds to 40% by the time I am age 62. I am doing that to try to mitigate 'sequence of returns' risk as best I can. From 63-67, I will glide to 50/50 and keep it there until I am 75. Then ramp back up to 60/40 by age 80. Will it work? Who knows. But pretty much everything I have read tells me that doing this will give me a decent shot at a comfortable retirement for 30+ years.

My biggest problem is that I started late, discovered Bogleheads late, and am somewhat behind the 8-ball. So concurrent to ramping up my retirement savings rate is to have our home paid off by the time I am 62. We (wife and I) are trying to accomplish that by making one-time lump sum payments in March of each year for the next 12 years. Will it work? Who knows. But I think not having any debt will help a lot in retirement.

Crushtheturtle
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Re: What's your asset allocation and why?

Post by Crushtheturtle » Sat Jul 09, 2016 7:50 am

Age 40
100% Stock
50% US/ 50% ex-US

Held in the following fund pairs to facilitate tax loss harvesting:

VTSAX (total US)
VFIAX (S&P 500)

VTIAX (total international)
VFWAX (FTSE All-world ex-US)

No bonds:
1. I believe that stocks outperform bonds more often than not. Therefore, the long term opportunity cost of tying up capital in Bonds/cash is greater than any potential benefit realized by rebalancing from bonds to equities during stock market downturns.
2. Volatility is irrelevant. The passive dividend income from an all-stock portfolio is sufficient to supplement other income streams. Or it will be, once I buy enough shares. Salient point: I will be receiving a gov't pension in a few years big enough to cover roughly 40% of my family's expenses.
3. No risk of behavioral mistakes. I am prepared to see the nominal value of the portfolio decrease by half, and just keep buying. Buy low, sell high.
With due respect to investors much wiser than me, I believe bonds to be little more than emotional "security blankets."

50% (at least) International:
1. I understand the arguments in favor of US equities. US companies are indeed strong, and multinational. However, experts who deride global diversification may be suffering from the "recency bias" of 20th century US economic performance. It is now the year 2016, and with globalization and technology trending as they are, it is illogical to conclude that the US can continue constituting 54% of global market cap while producing only 15% of the world's GDP. The US's share of the globe's population, land mass, and resources suggest that its portion of publically held market cap should naturally decrease over the long term. To hold only US equities would be betting that American capitalization increases from this point over the long term. Not a rational bet, in my view. In fact, I will likely increase foreign holdings greater than 50%, to match the global weight as ex-US rises over time.
2. Currency risk? It affects ex-US performance both ways. The dollar goes up, as well as down, relative to other currencies. Accounting risk? Unless you are concentrated in suspect markets (Nigeria? Venezuela?), I don't believe developed and emerging market regulatory oversight is less stringent than that in the US by much, if at all.
3. The US contains more of some sectors (i.e. technology) than others. Also, when Samsung sells more phones, that's not necessarily good news for Apple. Anyway, I think it makes sense to diversify heavily in ex-US, especially with 100% equities.

No tilts:
1. At various points, I've held Small cap Value funds, REITs, Bonds of different durations, and even experimented with Dual Momentum. I find the reasons for these strategies and holdings to be compelling. The problem- for me- is that when these strategies underperform, I second guess myself and wonder if the capital should be elsewhere. Hard to stay the course.
With total market funds, I have no such problem. What's the alternative to the total market, not investing in stocks at all? (There's Real Estate, and I'm definitely looking into that as well.)

This is what make sense to me. Do your due diligence, YMMV, etc. :happy
Last edited by Crushtheturtle on Sat Jul 09, 2016 9:19 am, edited 2 times in total.

lgs88
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Re: What's your asset allocation and why?

Post by lgs88 » Sat Jul 09, 2016 8:05 am

50% VTSAX (Vanguard Total Stock Market, Domestic)
30% VGTSX (Vanguard Total Stock Market, International)
20% NAESX (Vanguard Small-Cap Index, Domestic)

I feel a tad naked without a bond allocation despite my youth (mid-20s), less for their volatility-dampening effects than for the chance that they may well be the place to be for returns in this topsy-turvy economic environment.
merely an interested amateur

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NoNonsenseLandlord
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Re: What's your asset allocation and why?

Post by NoNonsenseLandlord » Sat Jul 09, 2016 8:15 am

I am mostly 90%+ in US Equities, specifically, IVV, IVW, QQQ, DVY, IWM. I have some international in my 401K, like 5% of total investable assets.

I have enough rental income for me to live on, at least 3x over. I can afford to wait to withdrawal if I have to. As I sell rentals, I will invest in other income producing assets, like bonds. I also have a pension when I want it (planning on age 65 in 9 years), Social Security (planning on age 70) and free healthcare.

seersucker
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Re: What's your asset allocation and why?

Post by seersucker » Sat Jul 09, 2016 8:21 am

I'm a dual momentum guy, currently 100% in VOO. It just makes sense to me.

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