30 Years and 100% VTI

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Ben8848
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30 Years and 100% VTI

Post by Ben8848 »

Let's say you're going to be away from your investments for 30 years and will never add another dime or see your portfolio. The point is to take human emotion out of the equation completely, so you're Tom Hanks in Cast Away for 30 years and can't find out what the markets are/economy is doing if you wanted to.

You can set up your portfolio to rebalance automatically 60/40, 70/30, etc. but it has to stay set that way for 30 years. After that you'll have a few years to adjust for fixed income in retirement.

What would your asset allocation be set to for 30 years? What's wrong with 100% VTI when taking out human emotion and why doesn't everyone do this? As someone said to eat your password in a different post.

Historically we know 100% equities will always win out in the highest return (10.29%):
https://advisors.vanguard.com/VGApp/iip ... RiskReturn
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arcticpineapplecorp.
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Re: 30 Years and 100% VTI

Post by arcticpineapplecorp. »

vti isn't diversified enough (regardless of past performance, we don't know the future).

i'd do vtwax or VT if you prefer ETF instead.

A few years to adjust fixed income? You mean that you don't need any of the money for 30 years. And you might not need the money for a few years after that?? Because if the market tanks in year 30 and takes 6 years to recover (2000-2005) you wouldn't want to sell to buy bonds in those years would you?

do we do hypotheticals on bogleheads?

I thought the advice had to have some practical application.

people say vtsax and chill, but I think it should be vtwax and chill instead.
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
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jason2459
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Re: 30 Years and 100% VTI

Post by jason2459 »

Most likely if you add money to VTI or any fund and never look at it again at all for 30 years you will have very little gains. Escheat.
"In the short run, the stock market is a voting machine; in the long run, it is a weighing machine" ~Benjamin Graham
whereskyle
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Re: 30 Years and 100% VTI

Post by whereskyle »

Ben8848 wrote: Fri Apr 02, 2021 2:07 pm Let's say you're going to be away from your investments for 30 years and will never add another dime or see your portfolio. The point is to take human emotion out of the equation completely, so you're Tom Hanks in Cast Away for 30 years and can't find out what the markets are/economy is doing if you wanted to.

You can set up your portfolio to rebalance automatically 60/40, 70/30, etc. but it has to stay set that way for 30 years. After that you'll have a few years to adjust for fixed income in retirement.

What would your asset allocation be set to for 30 years? What's wrong with 100% VTI when taking out human emotion and why doesn't everyone do this? As someone said to eat your password in a different post.

Historically we know 100% equities will always win out in the highest return (10.29%):
https://advisors.vanguard.com/VGApp/iip ... RiskReturn
We do not know that 100% equities will always win out with the highest return.

I'd consider 85% global equities (maybe a 20% small tilt)/15% long-term government bonds.

I certainly wouldn't object to 100% VTI, though.
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rchmx1
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Re: 30 Years and 100% VTI

Post by rchmx1 »

jason2459 wrote: Fri Apr 02, 2021 2:17 pm Most likely if you add money to VTI or any fund and never look at it again at all for 30 years you will have very little gains. Escheat.
Huh? Plopping $10k into VTI in '91 and not touching it again would leave you with over $200k in 2021. Pretty darn good gains, I'd say.
babystep
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Re: 30 Years and 100% VTI

Post by babystep »

Ben8848 wrote: Fri Apr 02, 2021 2:07 pm Let's say you're going to be away from your investments for 30 years and will never add another dime or see your portfolio. The point is to take human emotion out of the equation completely, so you're Tom Hanks in Cast Away for 30 years and can't find out what the markets are/economy is doing if you wanted to.

You can set up your portfolio to rebalance automatically 60/40, 70/30, etc. but it has to stay set that way for 30 years. After that you'll have a few years to adjust for fixed income in retirement.

What would your asset allocation be set to for 30 years? What's wrong with 100% VTI when taking out human emotion and why doesn't everyone do this? As someone said to eat your password in a different post.

Historically we know 100% equities will always win out in the highest return (10.29%):
https://advisors.vanguard.com/VGApp/iip ... RiskReturn
Interesting that you asked this and I was looking for the data on historical distribution of stocks. Specially trying to find-out percentage number of 30 year periods when real return of stocks was less than 2%. You might be interested in this thread.

viewtopic.php?f=10&t=344960
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FIREchief
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Re: 30 Years and 100% VTI

Post by FIREchief »

rchmx1 wrote: Fri Apr 02, 2021 2:31 pm
jason2459 wrote: Fri Apr 02, 2021 2:17 pm Most likely if you add money to VTI or any fund and never look at it again at all for 30 years you will have very little gains. Escheat.
Huh? Plopping $10k into VTI in '91 and not touching it again would leave you with over $200k in 2021. Pretty darn good gains, I'd say.
Yeah, that post made very little sense (unless we're missing something). :confused
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whereskyle
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Re: 30 Years and 100% VTI

Post by whereskyle »

FIREchief wrote: Fri Apr 02, 2021 2:50 pm
rchmx1 wrote: Fri Apr 02, 2021 2:31 pm
jason2459 wrote: Fri Apr 02, 2021 2:17 pm Most likely if you add money to VTI or any fund and never look at it again at all for 30 years you will have very little gains. Escheat.
Huh? Plopping $10k into VTI in '91 and not touching it again would leave you with over $200k in 2021. Pretty darn good gains, I'd say.
Yeah, that post made very little sense (unless we're missing something). :confused
It's a joke about how neglected assets "escheat" to the State. Governments take stuff that isn't being used.
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Re: 30 Years and 100% VTI

Post by geerhardusvos »

arcticpineapplecorp. wrote: Fri Apr 02, 2021 2:14 pm vti isn't diversified enough...
people say vtsax and chill, but I think it should be vtwax and chill instead.
Many people who are very intelligent have an all US equity portfolio, and VTI is well diversified for an equity fund. Having 10 to 40% in international is probably a good idea depending on one’s plans and philosophy, but it’s a foolish/incorrect statement to say VTI isn’t diversified as an equity portfolio.

It is very probable that 100% VTI over the next 30 years will be one of the best one fund diversified equity portfolios. Very probably most portfolios won’t beat it, and most active managers won’t beat it.

OP, there is nothing wrong with a 100% VTI portfolio. 80% of my portfolio is VTI. Don’t plan to change that, and the other 20% isn’t going to make too much of difference either way.
Last edited by geerhardusvos on Fri Apr 02, 2021 3:09 pm, edited 2 times in total.
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FIREchief
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Re: 30 Years and 100% VTI

Post by FIREchief »

whereskyle wrote: Fri Apr 02, 2021 2:53 pm
FIREchief wrote: Fri Apr 02, 2021 2:50 pm
rchmx1 wrote: Fri Apr 02, 2021 2:31 pm
jason2459 wrote: Fri Apr 02, 2021 2:17 pm Most likely if you add money to VTI or any fund and never look at it again at all for 30 years you will have very little gains. Escheat.
Huh? Plopping $10k into VTI in '91 and not touching it again would leave you with over $200k in 2021. Pretty darn good gains, I'd say.
Yeah, that post made very little sense (unless we're missing something). :confused
It's a joke about how neglected assets "escheat" to the State. Governments take stuff that isn't being used.
:oops: My bad. I suspected that we were missing something (or at least I was). I hate it when that happens.... (well, not really "hate" :P )
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Re: 30 Years and 100% VTI

Post by chrisdds98 »

arcticpineapplecorp. wrote: Fri Apr 02, 2021 2:14 pm vti isn't diversified enough (regardless of past performance, we don't know the future).

i'd do vtwax or VT if you prefer ETF instead.

A few years to adjust fixed income? You mean that you don't need any of the money for 30 years. And you might not need the money for a few years after that?? Because if the market tanks in year 30 and takes 6 years to recover (2000-2005) you wouldn't want to sell to buy bonds in those years would you?

do we do hypotheticals on bogleheads?

I thought the advice had to have some practical application.

people say vtsax and chill, but I think it should be vtwax and chill instead.
I would agree with you in an IRA/401k. but vtwax gets the shaft in a taxable account since you don't always get the foreign tax credit
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TheTimeLord
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Re: 30 Years and 100% VTI

Post by TheTimeLord »

Ben8848 wrote: Fri Apr 02, 2021 2:07 pm Let's say you're going to be away from your investments for 30 years and will never add another dime or see your portfolio. The point is to take human emotion out of the equation completely, so you're Tom Hanks in Cast Away for 30 years and can't find out what the markets are/economy is doing if you wanted to.

You can set up your portfolio to rebalance automatically 60/40, 70/30, etc. but it has to stay set that way for 30 years. After that you'll have a few years to adjust for fixed income in retirement.

What would your asset allocation be set to for 30 years? What's wrong with 100% VTI when taking out human emotion and why doesn't everyone do this? As someone said to eat your password in a different post.

Historically we know 100% equities will always win out in the highest return (10.29%):
https://advisors.vanguard.com/VGApp/iip ... RiskReturn
Honestly, to me it is an implausible proposition.
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LongTermInvestor88
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Re: 30 Years and 100% VTI

Post by LongTermInvestor88 »

Really don't get the advice in this post, not one person said go total small, total value, total quality, total momentum. Pretty sure that any one of these beats nearly every 30 year period over total stock market. Could go one better and diversify across the risk factors/drivers of returns. If only concern is what total amount will be in 30 years, there's better options than having nearly all the returns driven by U.S large Cap.
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Re: 30 Years and 100% VTI

Post by dogagility »

100% equities is the way to go. I would choose VT over VTI though.
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Orangutan
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Re: 30 Years and 100% VTI

Post by Orangutan »

LongTermInvestor88 wrote: Fri Apr 02, 2021 3:38 pm Really don't get the advice in this post, not one person said go total small, total value, total quality, total momentum. Pretty sure that any one of these beats nearly every 30 year period over total stock market. Could go one better and diversify across the risk factors/drivers of returns. If only concern is what total amount will be in 30 years, there's better options than having nearly all the returns driven by U.S large Cap.
Like what? SCV could be argued for, but I’d prefer owning the whole market for 30 years. I can’t imagine choosing a random factor like Momentum.
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Re: 30 Years and 100% VTI

Post by pokebowl »

rchmx1 wrote: Fri Apr 02, 2021 2:31 pm Huh? Plopping $10k into VTI in '91 and not touching it again would leave you with over $200k in 2021. Pretty darn good gains, I'd say.
The key word in their response was "escheat". Meaning regardless of performance, if money was left in the account and not touched again or looked at for 30 years, the state would have confiscated it long ago. :D
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arcticpineapplecorp.
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Re: 30 Years and 100% VTI

Post by arcticpineapplecorp. »

chrisdds98 wrote: Fri Apr 02, 2021 3:15 pm
arcticpineapplecorp. wrote: Fri Apr 02, 2021 2:14 pm vti isn't diversified enough (regardless of past performance, we don't know the future).

i'd do vtwax or VT if you prefer ETF instead.

A few years to adjust fixed income? You mean that you don't need any of the money for 30 years. And you might not need the money for a few years after that?? Because if the market tanks in year 30 and takes 6 years to recover (2000-2005) you wouldn't want to sell to buy bonds in those years would you?

do we do hypotheticals on bogleheads?

I thought the advice had to have some practical application.

people say vtsax and chill, but I think it should be vtwax and chill instead.
I would agree with you in an IRA/401k. but vtwax gets the shaft in a taxable account since you don't always get the foreign tax credit
good point, though the OP didn't specify what type of acct. Based on that however, perhaps I should not have assumed it was a retirement acct. Taxable accounts qualify for tax loss harvesting, but if you don't look at your portfolio for 30 years (in the OP's example) then that's certainly a lost opportunity of a taxable acct.
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
000
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Re: 30 Years and 100% VTI

Post by 000 »

Ben8848 wrote: Fri Apr 02, 2021 2:07 pm Historically we know 100% equities will always win out in the highest return (10.29%):
No, we don't.

As others said, because you haven't provided any compelling reason to skip the 6000+ stocks outside of the US.
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Re: 30 Years and 100% VTI

Post by RubyTuesday »

Ben8848 wrote: Fri Apr 02, 2021 2:07 pm
Historically we know 100% equities will always win out in the highest return (10.29%):
https://advisors.vanguard.com/VGApp/iip ... RiskReturn
Emphasis mine. The words “will always” when referring to something that has already happened seems inappropriate. It’s like saying “Historically we know that the St. Louis Cardinals will always win the 2011 World Series”.

We only know what happened in the past, and hope to realize our expectations for the future.

If you want to maximize the potential for wealth, take a big swing and try to hit a home run if you will, then sure, 100% equities. Many home run hitters strike out a lot.

If the goal is broader than taking a shot at maximum wealth, perhaps you have a minimum balance you hope to achieve, then 100% equities is the wrong approach to managing this risk.

Selecting an appropriate AA is about more than just your ability to “take human emotion out of the equation”, it’s about risk management.
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Re: 30 Years and 100% VTI

Post by placeholder »

While "never look" is an interesting thought problem the reality is that frequent checking is pretty much required these days to make sure the account hasn't been hacked.
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Re: 30 Years and 100% VTI

Post by Monsterflockster »

Ben8848 wrote: Fri Apr 02, 2021 2:07 pm Let's say you're going to be away from your investments for 30 years and will never add another dime or see your portfolio. The point is to take human emotion out of the equation completely, so you're Tom Hanks in Cast Away for 30 years and can't find out what the markets are/economy is doing if you wanted to.

You can set up your portfolio to rebalance automatically 60/40, 70/30, etc. but it has to stay set that way for 30 years. After that you'll have a few years to adjust for fixed income in retirement.

What would your asset allocation be set to for 30 years? What's wrong with 100% VTI when taking out human emotion and why doesn't everyone do this? As someone said to eat your password in a different post.

Historically we know 100% equities will always win out in the highest return (10.29%):
https://advisors.vanguard.com/VGApp/iip ... RiskReturn
Well with my luck the market would crash right when I am back and need to withdraw the cash. 😭
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Ben8848
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Re: 30 Years and 100% VTI

Post by Ben8848 »

RubyTuesday wrote: Fri Apr 02, 2021 4:56 pm
Ben8848 wrote: Fri Apr 02, 2021 2:07 pm
Historically we know 100% equities will always win out in the highest return (10.29%):
https://advisors.vanguard.com/VGApp/iip ... RiskReturn
Emphasis mine. The words “will always” when referring to something that has already happened seems inappropriate. It’s like saying “Historically we know that the St. Louis Cardinals will always win the 2011 World Series”.

We only know what happened in the past, and hope to realize our expectations for the future.

If you want to maximize the potential for wealth, take a big swing and try to hit a home run if you will, then sure, 100% equities. Many home run hitters strike out a lot.

If the goal is broader than taking a shot at maximum wealth, perhaps you have a minimum balance you hope to achieve, then 100% equities is the wrong approach to managing this risk.

Selecting an appropriate AA is about more than just your ability to “take human emotion out of the equation”, it’s about risk management.
I don't understand.. why is risk a factor when the money won't be needed for thirty years? Do you mean for the last few years incase there was a crash before accessing the money? The Vanguard link is from 1926-2019 with the 100% equities example.
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Re: 30 Years and 100% VTI

Post by LadyGeek »

This thread is now in the Investing - Theory, News & General forum (general discussion).
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Re: 30 Years and 100% VTI

Post by qwertyjazz »

The stock market might crash at 30 years at the exact time you want to start spending
The lifecycle funds were built for this - slowly increasing bonds as you get older - the ultimate set it and forget it - pick one that matches the year you want the money
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RubyTuesday
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Re: 30 Years and 100% VTI

Post by RubyTuesday »

Ben8848 wrote: Fri Apr 02, 2021 6:04 pm
RubyTuesday wrote: Fri Apr 02, 2021 4:56 pm
Ben8848 wrote: Fri Apr 02, 2021 2:07 pm
Historically we know 100% equities will always win out in the highest return (10.29%):
https://advisors.vanguard.com/VGApp/iip ... RiskReturn
Emphasis mine. The words “will always” when referring to something that has already happened seems inappropriate. It’s like saying “Historically we know that the St. Louis Cardinals will always win the 2011 World Series”.

We only know what happened in the past, and hope to realize our expectations for the future.

If you want to maximize the potential for wealth, take a big swing and try to hit a home run if you will, then sure, 100% equities. Many home run hitters strike out a lot.

If the goal is broader than taking a shot at maximum wealth, perhaps you have a minimum balance you hope to achieve, then 100% equities is the wrong approach to managing this risk.

Selecting an appropriate AA is about more than just your ability to “take human emotion out of the equation”, it’s about risk management.
I don't understand.. why is risk a factor when the money won't be needed for thirty years? Do you mean for the last few years incase there was a crash before accessing the money? The Vanguard link is from 1926-2019 with the 100% equities example.
Risk is factor if you have typical goals, for example you want a high probability of having enough funds available for a comfortable retirement. Let’s say you estimate you could get to that goal earning 4% real. IMO it would be a mistake to take the risk that 100% equity would achieve this goal, especially since you can have some reasonable level of confidence that a 60/40 AA would achieve that goal with a lot less volatility. On the other hand if your goal is to have a final balance in 30 years that has grown to 25 to 30x its initial value, your only chance is 100% equities, though the probability is likely low and the road bumpy.
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Re: 30 Years and 100% VTI

Post by livesoft »

Usually the word "Japan" rears its head in threads like this, so since I didn't see it mentioned yet, I thought that I would mention it.
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Re: 30 Years and 100% VTI

Post by z3r0c00l »

I would say don't forget about Japan and the lessons learned there. Truthfully one must use the proper tense here. 30 years, stocks have always come out ahead in one (big) country. We could easily see a 30 year run where bonds do better in the US. My 30 year AA is global market cap stocks, but I understand why some might want bonds in there.
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Re: 30 Years and 100% VTI

Post by Trader Joe »

Ben8848 wrote: Fri Apr 02, 2021 2:07 pm Let's say you're going to be away from your investments for 30 years and will never add another dime or see your portfolio. The point is to take human emotion out of the equation completely, so you're Tom Hanks in Cast Away for 30 years and can't find out what the markets are/economy is doing if you wanted to.

You can set up your portfolio to rebalance automatically 60/40, 70/30, etc. but it has to stay set that way for 30 years. After that you'll have a few years to adjust for fixed income in retirement.

What would your asset allocation be set to for 30 years? What's wrong with 100% VTI when taking out human emotion and why doesn't everyone do this? As someone said to eat your password in a different post.

Historically we know 100% equities will always win out in the highest return (10.29%):
https://advisors.vanguard.com/VGApp/iip ... RiskReturn
Easy answer - 100% VFIAX/VTSAX.
NotTooDeepLearning
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Re: 30 Years and 100% VTI

Post by NotTooDeepLearning »

VTI has way too little currency and country diversification. The dollar could crumble, political/domestic issues could arise, valuations are already very high historically, and more. I'd go VT all the way. It's easy to say go US only but that's because people have been conditioned by the post WWII era and often believe the same paradigm will continue for the rest of their lives, when in reality there's a good chance it won't.
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Re: 30 Years and 100% VTI

Post by David Jay »

Ben8848 wrote: Fri Apr 02, 2021 6:04 pmI don't understand.. why is risk a factor when the money won't be needed for thirty years? Do you mean for the last few years incase there was a crash before accessing the money?
Yes, that is a problem with a fixed period (30 years), sequence of returns in, say, year 28 or 29.

I was 100% stocks until age 58 but tapered down my holdings to a more balanced portfolio over the last 5 working years.
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Re: 30 Years and 100% VTI

Post by DB2 »

I'll vote for VT (or VTWAX).

Target fund could be a great option although you're letting Vanguard (if you go with them) decide allocations and glide path, but their skills are surely as good as anyone else's...and at least they are using all index funds (most important). Maybe the very best 'set and forget' option for someone. I like Paul Merriman's analogy to Target funds being like a pension in a sense.
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Re: 30 Years and 100% VTI

Post by anon_investor »

DB2 wrote: Fri Apr 02, 2021 7:03 pm I'll vote for VT (or VTWAX).
Where are all the ARK funds and Bitcoin folks?

I vote 100% VTI/VTSAX!
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Re: 30 Years and 100% VTI

Post by jason2459 »

DB2 wrote: Fri Apr 02, 2021 7:03 pm I'll vote for VT (or VTWAX).

Target fund could be a great option although you're letting Vanguard (if you go with them) decide allocations and glide path, but their skills are surely as good as anyone else's...and at least they are using all index funds (most important). Maybe the very best 'set and forget' option for someone. I like Paul Merriman's analogy to Target funds being like a pension in a sense.
They go by market cap weightings. It's a passive indexed fund.
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Re: 30 Years and 100% VTI

Post by warner25 »

Without getting political at all, I offer this quote by William Bernstein, fellow Boglehead and recommended author on financial and economic history:
William Bernstein wrote:History’s best-case scenario was the Roman Empire, which survived more or less intact for about seven centuries (if you ignore the odd sackings of the capital after 200 A.D.). A wildly optimistic historian might give us another few centuries of economic, political, and military continuity. Back-of-the-envelope, that’s about an 80% survival rate over the next 40 years.
I'd want to diversify beyond the USA. I'd want to diversify beyond 100% publicly-traded stocks too, as the nature of markets and stock ownership could fundamentally change again one day - say 1/3 in various government bonds, and maybe directly held real-estate if possible.
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Re: 30 Years and 100% VTI

Post by watchnerd »

Ben8848 wrote: Fri Apr 02, 2021 2:07 pm You can set up your portfolio to rebalance automatically 60/40, 70/30, etc. but it has to stay set that way for 30 years. After that you'll have a few years to adjust for fixed income in retirement.
I'd pick what I already have in my signature.

It has global equities, long-short bonds / inflation - deflation protection.
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Re: 30 Years and 100% VTI

Post by anon_investor »

watchnerd wrote: Fri Apr 02, 2021 7:56 pm
Ben8848 wrote: Fri Apr 02, 2021 2:07 pm You can set up your portfolio to rebalance automatically 60/40, 70/30, etc. but it has to stay set that way for 30 years. After that you'll have a few years to adjust for fixed income in retirement.
I'd pick what I already have in my signature.

It has global equities, long-short bonds / inflation - deflation protection.
When can I buy your portfolio in a low cost ETF? :wink:
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watchnerd
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Re: 30 Years and 100% VTI

Post by watchnerd »

anon_investor wrote: Fri Apr 02, 2021 7:59 pm
watchnerd wrote: Fri Apr 02, 2021 7:56 pm
Ben8848 wrote: Fri Apr 02, 2021 2:07 pm You can set up your portfolio to rebalance automatically 60/40, 70/30, etc. but it has to stay set that way for 30 years. After that you'll have a few years to adjust for fixed income in retirement.
I'd pick what I already have in my signature.

It has global equities, long-short bonds / inflation - deflation protection.
When can I buy your portfolio in a low cost ETF? :wink:
Let's start a SPAC
60% Global Market Stocks (VT,FM) | 15% Long Treasuries 15% short TIPS 10% cash / currencies || RSU + ESPP | LMP TIPS/STRIPS
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anon_investor
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Re: 30 Years and 100% VTI

Post by anon_investor »

watchnerd wrote: Fri Apr 02, 2021 8:03 pm
anon_investor wrote: Fri Apr 02, 2021 7:59 pm
watchnerd wrote: Fri Apr 02, 2021 7:56 pm
Ben8848 wrote: Fri Apr 02, 2021 2:07 pm You can set up your portfolio to rebalance automatically 60/40, 70/30, etc. but it has to stay set that way for 30 years. After that you'll have a few years to adjust for fixed income in retirement.
I'd pick what I already have in my signature.

It has global equities, long-short bonds / inflation - deflation protection.
When can I buy your portfolio in a low cost ETF? :wink:
Let's start a SPAC
Why not a new crypto too while we are at it? :twisted:
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Re: 30 Years and 100% VTI

Post by watchnerd »

anon_investor wrote: Fri Apr 02, 2021 8:06 pm

Why not a new crypto too while we are at it? :twisted:
#DODGYCOIN
60% Global Market Stocks (VT,FM) | 15% Long Treasuries 15% short TIPS 10% cash / currencies || RSU + ESPP | LMP TIPS/STRIPS
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Re: 30 Years and 100% VTI

Post by nisiprius »

Ben8848 wrote: Fri Apr 02, 2021 2:07 pm...The point is to take human emotion out of the equation completely... What would your asset allocation be set to for 30 years? What's wrong with 100% VTI when taking out human emotion and why doesn't everyone do this?
Why doesn't everyone take out human emotion?

1) Because it is not possible to take out human emotion.

2) Because if you do you take out human emotion, then it doesn't matter what your asset allocation is, because you will not experience either happiness or sadness, whatever the outcome.
Historically we know 100% equities will always win out in the highest return (10.29%):
Well, that is not true for thirty-year periods, anyway. In 2014, in the fifth edition of Stocks for the Long Run, Jeremy Siegel wrote:
In the first four editions of Stocks for the Long Run, I noted that the last 30-year period when the return on long-term bonds beat stocks ended in 1861, at the onset of the Civil War. That is no longer true. Because of the large drop in government bond yields over the past decade, the 11.03 percent annual returns on long-term government bonds surpassed the 10.98 percent on stocks for the 30-year period from January 1, 1982, through the end of 2011.
Last edited by nisiprius on Fri Apr 02, 2021 8:27 pm, edited 1 time in total.
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Re: 30 Years and 100% VTI

Post by bck63 »

000 wrote: Fri Apr 02, 2021 4:55 pm
Ben8848 wrote: Fri Apr 02, 2021 2:07 pm Historically we know 100% equities will always win out in the highest return (10.29%):
No, we don't.

As others said, because you haven't provided any compelling reason to skip the 6000+ stocks outside of the US.
Because US has vastly outperformed ex-US over the last two centuries (despite small periods of ex-US out-performance here and there).
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Re: 30 Years and 100% VTI

Post by whereskyle »

anon_investor wrote: Fri Apr 02, 2021 7:59 pm
watchnerd wrote: Fri Apr 02, 2021 7:56 pm
Ben8848 wrote: Fri Apr 02, 2021 2:07 pm You can set up your portfolio to rebalance automatically 60/40, 70/30, etc. but it has to stay set that way for 30 years. After that you'll have a few years to adjust for fixed income in retirement.
I'd pick what I already have in my signature.

It has global equities, long-short bonds / inflation - deflation protection.
When can I buy your portfolio in a low cost ETF? :wink:
M1 Finance would enable you to create your own "pie" of ETFs composing watchnerd's portfolio. They'll rebalance it for you too. For free. I've become a big fan (of M1, but watchnerd's port isn't too shabby either).
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle
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Re: 30 Years and 100% VTI

Post by 000 »

bck63 wrote: Fri Apr 02, 2021 8:22 pm Because US has vastly outperformed ex-US over the last two centuries (despite small periods of ex-US out-performance here and there).
Do you expect another two world wars where every other major economy is crippled to occur in your lifetime? If not, that fact is meaningless.
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Re: 30 Years and 100% VTI

Post by jarjarM »

000 wrote: Fri Apr 02, 2021 8:54 pm
bck63 wrote: Fri Apr 02, 2021 8:22 pm Because US has vastly outperformed ex-US over the last two centuries (despite small periods of ex-US out-performance here and there).
Do you expect another two world wars where every other major economy is crippled to occur in your lifetime? If not, that fact is meaningless.
World history GDP, very weird that many is so focus on the last 150 years but forgot how US came about to its current dominance. Once upon a time, other countries was more dominant in GDP than US is today.
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Re: 30 Years and 100% VTI

Post by 000 »

jarjarM wrote: Fri Apr 02, 2021 9:20 pm World history GDP, very weird that many is so focus on the last 150 years but forgot how US came about to its current dominance. Once upon a time, other countries was more dominant in GDP than US is today.
Do other investors not have this information? How is it relevant to security returns? Stocks are a derivative of corporate performance, which is another way of saying valuations matter.

Moreover, your chart seems to disprove your own implicit assertion that share-of-world-GDP drives stock growth as US share-of-world-GDP has been on the decline since the 1950s yet US stock performance has been excellent since then.

Finally, I don't think we should assume the past is likely to repeat. The variables that lead to economic and stock growth in the US in the past were what they were but we are faced with new variables today. It would be more instructive to find other historical societies that were similarly situated as the US today.
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Re: 30 Years and 100% VTI

Post by jarjarM »

000 wrote: Fri Apr 02, 2021 9:25 pm
jarjarM wrote: Fri Apr 02, 2021 9:20 pm World history GDP, very weird that many is so focus on the last 150 years but forgot how US came about to its current dominance. Once upon a time, other countries was more dominant in GDP than US is today.
Do other investors not have this information? How is it relevant to security returns? Stocks are a derivative of corporate performance, which is another way of saying valuations matter.

Moreover, your chart seems to disprove your own implicit assertion that share-of-world-GDP drives stock growth as US share-of-world-GDP has been on the decline since the 1950s yet US stock performance has been excellent since then.

Finally, I don't think we should assume the past is likely to repeat. The variables that lead to economic and stock growth in the US in the past were what they were but we are faced with new variables today. It would be more instructive to find other historical societies that were similarly situated as the US today.
I think in long term performance, GDP does play a role in stock returns though you're right that US share-of-world GDP declined sine 1950s. I would think that's due to the raise of global trade and significant shares of US companies' revenue is now from international side. I would think the most analogues of current US situation maybe the British empire of the 1800s. So basically while the GDP/manufacturing prowess of the country degraded, due to its governance, still a happy market for capital. I'm only ~15% leaning to international so my hope is still that US will be dominant force in the next few years until I retire.
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Re: 30 Years and 100% VTI

Post by abuss368 »

jason2459 wrote: Fri Apr 02, 2021 2:17 pm Most likely if you add money to VTI or any fund and never look at it again at all for 30 years you will have very little gains. Escheat.
Why?
John C. Bogle: “Simplicity is the master key to financial success."
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Re: 30 Years and 100% VTI

Post by abuss368 »

LongTermInvestor88 wrote: Fri Apr 02, 2021 3:38 pm Really don't get the advice in this post, not one person said go total small, total value, total quality, total momentum. Pretty sure that any one of these beats nearly every 30 year period over total stock market. Could go one better and diversify across the risk factors/drivers of returns. If only concern is what total amount will be in 30 years, there's better options than having nearly all the returns driven by U.S large Cap.
How could any sub sector of market beat for 30 years?

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Re: 30 Years and 100% VTI

Post by Random Musings »

45% total world stock - VTWAX
10% US SCV
5% Int'l SCV
5% Emerging SCV
10% gold
10% nominal bonds - 2/3 domestic
7.5% VTAPX
7.5% VIPSX

Rebalance +/-10% bands. Hope I can survive on the island for 30 years.

RM
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Re: 30 Years and 100% VTI

Post by anon_investor »

whereskyle wrote: Fri Apr 02, 2021 8:51 pm
anon_investor wrote: Fri Apr 02, 2021 7:59 pm
watchnerd wrote: Fri Apr 02, 2021 7:56 pm
Ben8848 wrote: Fri Apr 02, 2021 2:07 pm You can set up your portfolio to rebalance automatically 60/40, 70/30, etc. but it has to stay set that way for 30 years. After that you'll have a few years to adjust for fixed income in retirement.
I'd pick what I already have in my signature.

It has global equities, long-short bonds / inflation - deflation protection.
When can I buy your portfolio in a low cost ETF? :wink:
M1 Finance would enable you to create your own "pie" of ETFs composing watchnerd's portfolio. They'll rebalance it for you too. For free. I've become a big fan (of M1, but watchnerd's port isn't too shabby either).
Good point. Wish someone else bigger had M1's tech.
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