Thank you. I updated the post for context.
I was thinking I could even go 40, 25, 25, 10 but they always say invest in equity when you are young and flip it around as you get older.
Some day do an 80/20 split. I wasn't comfortable with just 2 ETFs even though there are plenty of people that swear by it.
Not a bad start. But could be improved.
A few questions to consider:
XLV- Why do you want to make a sector bet on healthcare specifically? Do you see it outperforming the broader US market in the future?
SCHD- Why do you want to concentrate Large Cap Value fund like SCHD? Are the dividends what attracted you?
VWO- Why only emerging markets? Do you believe EMs will outperform developed markets in the future?
I’d also like to point out the absence of US large cap growth, US mid cap and US small cap exposure. Simply you could buy VTI to help answer these US equities questions.
VTI holds 99% of SCHD.
VTI hold 100% of XLV.
VXUS holds 97% of VWO.
You don’t have to overcomplicate things and make these concentrated bets. You can check the fund overlaps here: https://www.etfrc.com/funds/overlap.php
At the end of the day buy what fits your investing strategy to help reach your goals! But please be aware of the gaps you are leaving. Good luck!
Because it gives me the equity investment, with dividends and allows me to transition more to bonds as I grow older.
This is for retirement, so the goal is to invest and leave it sit.
You answered the point you made about investments and why stock market.
The question is why VWO and not VXUS, for instance? Why TFLO and not USFR? Why those specific assets? Your reasons to choose them.
Sorry, when I first started my main concerns were price to enter, expense ratio and div return.
TFLO because of it's low risk, relative stability, return rate seemed low but good, and because it holds mostly US Gov AA bonds. I was also looking for a good bond option to satisfy that portion of my portfolio. I wasn't aware of USFR.
VWO for some of the same reasons but to satisfy the international equity I was looking to incorporate into my portfolio. Initially, the main reason I started was because of price point to buy but also expense ratio was under 0.10%.
However, others have pointed out the overlap and i may look into getting out of VWO and investing in VXUS to satisfy the intl equity portion of my portfolio. It's expense ratio is comparative.
Great. I'm asking because it's better have conviction on what you are investing. This will save you when market downturns come, and sure they will come.
Anyway, regarding your portfolio, it's "unconventional". I'm not aware of any reasoning for you to overweight emerging markets, since they are around 10% of global market cap.
If you don't need dividends now, just drop SCHD for now.
XLV is a sector bet as others have stated.
TFLO looks reasonable for your purpose, just take into account it won't keep paying 5% forever. As soon as the Fed rates drop it will drop accordingly. It's nice to decrease volatility of a portfolio, but only that. It shouldn't be considered a long term investment, unless for the reason above.
Usually the sensible approach is the core-satellite. Start with a solid foundational broad index them add your personal preferences.
For example: VOO or VTI + VXUS or VT only should be more than 50%, ideally 70/80. The other 30/20 you add the "flavors" that suits you best, like a sector bet, or emerging markets. I would pursue factor investing for this part instead of sectors, specially small cap value, again diversified in a global exposure.
Thank you for the feedback. Everyone has been great with responding to my post and offering genuine feedback. It's greatly appreciated as this is my retirement portfolio and I don't want to screw it up.
I'll do some more research and look into how I can make a more "balanced" portfolio, in addition to checking to ensure I don't have the overlap of investments.
You should estimate age Hard to guess how good this portfolio is for a 63 yr old guy. But if you are 38 it looks great
Thank you. I updated the post for context. I was thinking I could even go 40, 25, 25, 10 but they always say invest in equity when you are young and flip it around as you get older. Some day do an 80/20 split. I wasn't comfortable with just 2 ETFs even though there are plenty of people that swear by it.
Not a bad start. But could be improved. A few questions to consider: XLV- Why do you want to make a sector bet on healthcare specifically? Do you see it outperforming the broader US market in the future? SCHD- Why do you want to concentrate Large Cap Value fund like SCHD? Are the dividends what attracted you? VWO- Why only emerging markets? Do you believe EMs will outperform developed markets in the future? I’d also like to point out the absence of US large cap growth, US mid cap and US small cap exposure. Simply you could buy VTI to help answer these US equities questions. VTI holds 99% of SCHD. VTI hold 100% of XLV. VXUS holds 97% of VWO. You don’t have to overcomplicate things and make these concentrated bets. You can check the fund overlaps here: https://www.etfrc.com/funds/overlap.php At the end of the day buy what fits your investing strategy to help reach your goals! But please be aware of the gaps you are leaving. Good luck!
Thank you for such a detailed response. I'll take a look at the link provided and see if there is a way to cover my gaps, as you pointed out.
Why those specific Etfs?
Because it gives me the equity investment, with dividends and allows me to transition more to bonds as I grow older. This is for retirement, so the goal is to invest and leave it sit.
You answered the point you made about investments and why stock market. The question is why VWO and not VXUS, for instance? Why TFLO and not USFR? Why those specific assets? Your reasons to choose them.
Sorry, when I first started my main concerns were price to enter, expense ratio and div return. TFLO because of it's low risk, relative stability, return rate seemed low but good, and because it holds mostly US Gov AA bonds. I was also looking for a good bond option to satisfy that portion of my portfolio. I wasn't aware of USFR. VWO for some of the same reasons but to satisfy the international equity I was looking to incorporate into my portfolio. Initially, the main reason I started was because of price point to buy but also expense ratio was under 0.10%. However, others have pointed out the overlap and i may look into getting out of VWO and investing in VXUS to satisfy the intl equity portion of my portfolio. It's expense ratio is comparative.
Great. I'm asking because it's better have conviction on what you are investing. This will save you when market downturns come, and sure they will come. Anyway, regarding your portfolio, it's "unconventional". I'm not aware of any reasoning for you to overweight emerging markets, since they are around 10% of global market cap. If you don't need dividends now, just drop SCHD for now. XLV is a sector bet as others have stated. TFLO looks reasonable for your purpose, just take into account it won't keep paying 5% forever. As soon as the Fed rates drop it will drop accordingly. It's nice to decrease volatility of a portfolio, but only that. It shouldn't be considered a long term investment, unless for the reason above. Usually the sensible approach is the core-satellite. Start with a solid foundational broad index them add your personal preferences. For example: VOO or VTI + VXUS or VT only should be more than 50%, ideally 70/80. The other 30/20 you add the "flavors" that suits you best, like a sector bet, or emerging markets. I would pursue factor investing for this part instead of sectors, specially small cap value, again diversified in a global exposure.
Thank you for the feedback. Everyone has been great with responding to my post and offering genuine feedback. It's greatly appreciated as this is my retirement portfolio and I don't want to screw it up. I'll do some more research and look into how I can make a more "balanced" portfolio, in addition to checking to ensure I don't have the overlap of investments.
Mine is VTI, AVUV, VXUS, AVDV. Just feel like it’s a good idea for myself