I wanted to hold 80% stocks total. However I wanted 80% of that 80% to be with the S&P while the other 20% of that 80% with mid/small caps.
I was just asking if I did that correctly.
The math is right. Within your 65% Domestic stock part you have 80% S&P 500 and 20% S&P Completion Index (the underlying index for the Vanguard Extended Market ETF). With that 80/20 split in the domestic section, you are roughly replicating VTI or generally speaking the total US stock market weighted by market capitalization.
While market capitalization is definitely a legitimate way to structure your portfolio, some people prefer to overweight certain parts of the stock market (e.g., small cap, value, momentum). The rationale for this are factor premiums based on the research of Fama/French, Swedroe and others, which have found that past excess return were linked to certain factors. This Vanguard article gives a nice overview on the topic
https://personal.vanguard.com/pdf/ISGFBI_042015_Online.pdfHowever, the three-factor model and factor-based investing is quite debated. One could also argue, that this is not passive investing anymore, since you actively choose a (factor-based) strategy over a market-cap portfolio :)
However, if you stick to market capitalization as a rationale for the US, why not sticking to market capitalization on a Global scale?
If I take the MSCI All Country World IMI Index as a reference (~99% of Global investable market cap), US stocks are only ~52% of global market capitalization (see
https://www.msci.com/documents/10199/4211cc4b-453d-4b0a-a6a7-51d36472a703 second page, pie chart on the right).
EDIT: For your reference, you might also want to look at the asset allocation in the Vanguard Target Retirement funds. If I take the Target 2040 and 2050 as an example, Vanguard is allocating their stock part into ~60% domestic and ~40% International. Only the stock/bond ratio is changing over time (
https://investor.vanguard.com/mutual-funds/target-retirement/#/mini/holdings/0696).
Don't get me wrong, as I said previously, there is no right and wrong in terms of how your portfolio should look like. Putting more emphasis on the home market and home currency is okay if it is done intentionally and with a certain rationale (and not only home bias). I just want to make sure that the choices you have made are intentional.
BTW, did you already run your portfolio through
https://www.portfoliovisualizer.com/ The page has quite some nice backtesting features for trying out different portfolio combinations.