The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: investor2019 on June 10, 2019, 04:29:45 PM
-
MMM recommends various reasons to ONLY own VTI (e.g., diversification, simplicity, etc.).
Wondering how many people still follow this recommendation. Figured this is also a good way to discover other funds.
What are your current holdings and asset allocation? (include age/risk tolerance)
-
Did MMM really advise to only hold VTI and nothing else? I must have missed that. My AA has never been 100 US equities. And why on earth would I not want to diversify into non-US equities? With a short runway (>50 years of age currently), fixed income holdings seems highly prudent.
Roughly speaking my AA is 75/25 (equity/bond), with an 80/20 split on US/non US equities. I also have a small REIT (VGSLX) and small cap tilt. I dont want the volatility of EM so I exclude that from my AA. Regarding risk, I have a need and willingness to take on more risk (hence the 75/25), but my ability to take on such risk is probably lower than I estimate. I have been through both the dot com and 2008 meltdowns, and been brutally burned, if that means anything.
-
I'm as close to 100% VT (https://investor.vanguard.com/etf/profile/VT) as I can get with my workplace retirement account. That is, I approximate VT with some other funds.
-
Both 35 with 2 small children. Currently very low income, with 245k in investment accounts. Debating continuing to work very little just to make ends meet and let our accounts grow until 65ish.
20% VTSAX
20% VFSAX
20% VFWAX
20% IJS
20% bonds/cash (heavy on cash right now because we might buy an investment property)
-
The strength of $VTI is getting a good return with only market risk.
The downside is cash flow. A dividend rate of 1.8% means that you're having to sell some shares.
Rental property has a much better cash flow. But that leaves you exposed to the local real estate market conditions. For some people it's not a ton of trouble to manage a rental property, but that may not be you.
-
I don't follow this advice at all.
I think it is excellent advice for those who are starting out or want to keep investing simple.
Personally, I am not comfortable with the risk associated with this investing strategy. I keep an AA of 65% equities (2/3 domestic, 1/3 international), 25% well diversified fixed income, and 10% alternatives. This is my well-earned risk tolerance, and not really a recommendation for anyone other than myself.
I think the other place the 100% VTI (or similar) strategy could be improved is diversification. Sure, the bloggers shout from the rooftop that it's diversified. But dig under the hood a bit, and these funds are typically heavily weighted towards large-caps, and large countries. I haven't looked at VTI specifically, but it is a common issue among cap-weighted indices. Mathematically, increased diversification is the only free lunch in investing (per the efficient market hypothesis), so I prefer to increase this above the basic amount provided by a single index tracker.
-
Strong small-value tilt.
Slight tilt away from US.
Individual funds are an implementation detail.
-
I don't follow this advice at all.
I think it is excellent advice for those who are starting out or want to keep investing simple.
Personally, I am not comfortable with the risk associated with this investing strategy. I keep an AA of 65% equities (2/3 domestic, 1/3 international), 25% well diversified fixed income, and 10% alternatives. This is my well-earned risk tolerance, and not really a recommendation for anyone other than myself.
I think the other place the 100% VTI (or similar) strategy could be improved is diversification. Sure, the bloggers shout from the rooftop that it's diversified. But dig under the hood a bit, and these funds are typically heavily weighted towards large-caps, and large countries. I haven't looked at VTI specifically, but it is a common issue among cap-weighted indices. Mathematically, increased diversification is the only free lunch in investing (per the efficient market hypothesis), so I prefer to increase this above the basic amount provided by a single index tracker.
+1
No way I am doing a 100/0, 90/10 or even a 60/40. I am closer to 40/50/30 (equity, bond, alternative) and sleep very well at night.
-
100% stocks...
60% total US
37.5% total ex-US
2.5% EM (mild tilt)
Goal was to be at 9x living expenses by year end. Currently at 10+ so correction/recession isn't worrying me with diversification like this and a near 75% savings rate.
-
I am 89% stocks/11% bonds.
Within the stock category, I am 75% total US and 25% total international.
Total US is mostly VTSAX, but also a mix of Fidelity funds that are available in my 401(k) (FXAIX, FSMDX, FSSNX) and some VFIAX/SCHX/SCHA from past AA iterations and accounts that I don't want to sell due to cap gains.
Total international is almost all VTIAX, but some leftover SCHE.
Bonds are FXNAX (again, what's available in my 401(k)).
Bonds are held pre-tax. International is targeted at taxable for the tax credit, but some still hanging out in Roth until I can save more in taxable. US fills in the gaps everywhere else.
Year 1 of implementing a 20 year bond tent (10 years up, 10 years down). Subject to change, of course, if FIRE looks closer or further off in a couple years.
-
Great signature line about how you should be unhappy with part of your portfolio!