Asset Allocation advice

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MoRS76
Posts: 4
Joined: Wed Nov 13, 2019 5:35 am

Asset Allocation advice

Post by MoRS76 » Wed Nov 13, 2019 6:24 am

Hi,

New member and this is my 1st post (yay!). Would love to get inputs on my current asset allocation for retirement in 25 years.

Also, are there situations when changing asset allocation makes sense (besides shifting towards safer assets as you get closer to retirement)?

27% - VTI (Total US Market)
26% - Employer Stock (Equity Awards)
22% - VWO (Emerging Markets Equity)
11% - VXUS (International Equity)
8% - BND (US Intermediate Bonds)
6% - BNDX (International Intermediate Bonds)

Thanks!

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ruralavalon
Posts: 16716
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Asset Allocation advice

Post by ruralavalon » Wed Nov 13, 2019 11:42 am

Welcome to the forum :) .

MoRS76 wrote:
Wed Nov 13, 2019 6:24 am
Hi,

New member and this is my 1st post (yay!). Would love to get inputs on my current asset allocation for retirement in 25 years.

Also, are there situations when changing asset allocation makes sense (besides shifting towards safer assets as you get closer to retirement)?

27% - VTI (Total US Market)
26% - Employer Stock (Equity Awards)
22% - VWO (Emerging Markets Equity)
11% - VXUS (International Equity)
8% - BND (US Intermediate Bonds)
6% - BNDX (International Intermediate Bonds)

Thanks!
It's hard to assess the asset allocation with this limited information (we only know that you are retiring in 25 years).

What is your profession or occupation? Will you have a pension? What is your age? How safe is your job, your employer and the industry you work in? How would you describe your risk tolerance? Do you have any dependents? Any debt? Do you have an emergency fund? Please see "Asking Portfolio Questions ".

In general 14% in bonds may be low.

In my opinion international bonds are not necessary or helpful.

You are very overweight in emerging markets.

26% in employer stock is very concentrated and risky. Are there restrictions on sale of the company stock?
Last edited by ruralavalon on Wed Nov 13, 2019 11:45 am, edited 1 time in total.
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David Jay
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Location: Michigan

Re: Asset Allocation advice

Post by David Jay » Wed Nov 13, 2019 11:44 am

Two comments:

1. Too much company stock. You may or may not be able to adjust this, but if you have ability to unload some of this you need to do so. Your income and 26% of your retirement are both relying on a single company, this is the definition of single company risk.
2. 22% in Emerging Markets is a wild ride. EM has been a wild ride for decades - go take a look at historic chart. I would limit EM to 10%.

Everything else is fine.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

retiredjg
Posts: 38463
Joined: Thu Jan 10, 2008 12:56 pm

Re: Asset Allocation advice

Post by retiredjg » Wed Nov 13, 2019 11:49 am

The funds you hold are important. But it is also important where you are holding them and we can't tell that from the information presented. See the link at the bottom of this post for how to give us a better picture of what your portfolio looks like.

I agree that you are way over-weighted in emerging markets. And that's too much company stock (unless you simply don't have a choice). Of course, you may have made the choice to do these things, but you should know there is extra risk involved by doing it.

Welcome to the forum.

retired@50
Posts: 669
Joined: Tue Oct 01, 2019 2:36 pm

Re: Asset Allocation advice

Post by retired@50 » Wed Nov 13, 2019 7:16 pm

David Jay wrote:
Wed Nov 13, 2019 11:44 am
Two comments:

1. Too much company stock. You may or may not be able to adjust this, but if you have ability to unload some of this you need to do so. Your income and 26% of your retirement are both relying on a single company, this is the definition of single company risk.
2. 22% in Emerging Markets is a wild ride. EM has been a wild ride for decades - go take a look at historic chart. I would limit EM to 10%.

Everything else is fine.
+1 The VXUS fund you own already includes Emerging Markets, there isn't any need to buy a separate EM fund, you already own it in VXUS.

Regards,

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1789
Posts: 314
Joined: Fri Aug 16, 2019 3:31 pm
Location: OR

Re: Asset Allocation advice

Post by 1789 » Wed Nov 13, 2019 11:13 pm

MoRS76 wrote:
Wed Nov 13, 2019 6:24 am
Hi,

New member and this is my 1st post (yay!). Would love to get inputs on my current asset allocation for retirement in 25 years.

Also, are there situations when changing asset allocation makes sense (besides shifting towards safer assets as you get closer to retirement)?

27% - VTI (Total US Market)
26% - Employer Stock (Equity Awards)
22% - VWO (Emerging Markets Equity)
11% - VXUS (International Equity)
8% - BND (US Intermediate Bonds)
6% - BNDX (International Intermediate Bonds)

Thanks!
Welcome to the forum. I would get rid of all above other than VTI and BND. Depending how much you have emergencies/cash ,your ability/need to take risk can help you to decide allocation between two funds.

I am also 25 years away from retirement (unless i get disabled tomorrow or die) and we do 90% VTI/VTSAX/SP500 with 10% BND with 1 year emergency set aside. Good luck!
"My conscience wants vegetarianism to win over the world. And my subconscious is yearning for a piece of juicy meat. But what do i want?" (Andrei Tarkovsky)

Topic Author
MoRS76
Posts: 4
Joined: Wed Nov 13, 2019 5:35 am

Re: Asset Allocation advice

Post by MoRS76 » Fri Nov 15, 2019 7:26 pm

Thanks for the extremely helpful replies. Lots of great advice!

My apologies for not seeing the 'Asking Portfolio Questions' before posting. I also noticed there is a section for non-US investors and I will post there in the future although I always learn a lot from US investors! Below is the additional info requested; looking forward to your inputs.

Nationality/Residency: Canadian living in Singapore
Profession/Company: Cloud Data Analytics / US tech company. Stable job security based on current trends.
Age: 43
Debt: None
Pension: None
Emergency funds: 3 months of expenses
Tax Filing Status: Married with 2 dependent children (5 and 3 yo)
Tax Rate: 18% income tax (15% dividend tax and 0% capital gains tax in Singapore)
Risk Tolerance: High

Desired Asset allocation: 80% stocks / 20% bonds
Desired International allocation: 10-20% of stocks for some non-US diversification

Current portfolio
27% - VTI (Total US Market) -> will replace with equivalent ETF domiciled in Ireland to reduce withholding tax + avoid estate tax on Singapore residents
26% - Employer Stock (Equity Awards) -> these are vested stocks which I can sell (they exclude restricted stocks which are 50% of vested shares)
22% - VWO (Emerging Markets Equity) -> initial goal was additional diversification to China which is not included in VXUS
11% - VXUS (International Equity)
8% - BND (US Intermediate Bonds)
6% - BNDX (International Intermediate Bonds) -> will liquidate based on inputs received

We also have property and their value is equivalent to our equity/bond portfolio.

retiredjg
Posts: 38463
Joined: Thu Jan 10, 2008 12:56 pm

Re: Asset Allocation advice

Post by retiredjg » Sun Nov 17, 2019 8:40 am

Thank you for the update, but I doubt you will get many answers. Most of us know little of Canadian tax law and even less about Canadians living in Singapore. Maybe you'll get more responses from the non-US investing forum.

My comments would be the same...too much in emerging markets and too much company stock.

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oldcomputerguy
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Location: In the middle of five acres of woods in East Tennessee

Re: Asset Allocation advice

Post by oldcomputerguy » Sun Nov 17, 2019 9:24 am

This thread is now in the Non-US Investing forum.
"I’ve come around to this: If you’re dumb, surround yourself with smart people; and if you’re smart, surround yourself with smart people who disagree with you." (Aaron Sorkin)

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