Feedback on my new portfolio allocation choices, tilted toward emergent?

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Topic Author
escape321
Posts: 2
Joined: Wed Jan 08, 2020 1:42 am

Feedback on my new portfolio allocation choices, tilted toward emergent?

Post by escape321 » Sat Jan 11, 2020 6:43 pm

Hello there,
I am looking to build a passive portfolio where I can deploy my cash and contribute to every paycheck. This will be a taxable account.
The goal would maximize total returns over the next 2 decades. It will be funded by a starting amount and DCA into every 2 weeks. It will be rebalanced automatically every month (with the cash additions, without selling) and dividends will be reinvested (using M1 finance).

- Emergency funds: 6month+
- Debt: 0
- Tax Filing Status: Married
- Rate: 35%+
- State: CA
- Age: 33
- Desired Asset allocation: 0% bonds, 100% equities and alternatives
- Desired International allocation: 30-40%

Current assets:
- 100k in stocks (taxable account). I’ve started selling some stocks position so I will be able to divest into the new portfolio.
- 200k cash in a CD account
- 30k cash in a 401k Roth (I've just opened it 4 months ago and maxed it out but haven’t decided on asset allocation on it yet).


Portfolio mix:
1- US SP500 Equal Weight (RSP) 30%
2- US Mid-Cap ETF (IJH) 10%
3- Developed Markets ETF (VEA) 5%
4- REIT (VNQ) 10%
5- Gold (IAU) 10%
6- Emerging Markets ETF (VWO) 15%
7- Russia ETF (RSX) 4%
8- Vietnam ETF (VNM) 4%
9- India ETF (INDA) 4%
10- South Korea ETF (EWY) 4%
11- China (MCHI) 4%

Expense ratio of the mix: 0.23%

Allocation rationale:

1- Exposure to the US. I like equal weight (over VTI) because it makes the different sectors more equal in terms of allocations (and not overweight by tech). Also, equal weight seems to provides alpha (at least, during the last 40 years the Equal Weighted Wilshire Large-Cap outperformed their market weight alternative).
2- Exposure to mid-cap that 1. doesn’t provide.
3- Diversification to developed market (although I am tempted to remove that one).
4- Exposure to real estate, as I don’t currently own any property.
5- Gold has done well in the past when US securities were too high, as it now. This could be a temporary position (sold in a couple of years post-recession).
6- Exposure to EMs. It seems to me this is where value is, and where growth will be coming from in this next decade.
7-11 A couple of countries I have researched that seems to be currently cheap in term of valuation, but that have good growth prospects. There are cheaper ETFs for buy and hold (ie Franklin ETFs), but they are not available on the platform I will be using (M1 finance).

The Portfolio is tilted toward emergent, as they seem to be undervalued right now. Plus, I am already over-exposed to the US (I work here and started vesting US stock from a large tech company).
I am comfortable with volatility and looking to maximize total returns.

Any comments or criticism about my investment rationale and mix?

Topic Author
escape321
Posts: 2
Joined: Wed Jan 08, 2020 1:42 am

Re: Feedback on my new portfolio allocation choices, tilted toward emergent?

Post by escape321 » Mon Jan 13, 2020 3:56 pm

No comments? Is my allocation stupid? :|

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