2018 Asset Allocation

[NCTarheel]

What is your optimal Asset Allocation for 2018

 - U.S. stocks
 - Bonds
 - International stocks
 - etc

Personally I am HEAVILY (70+%) weighted in the Large Cap US stocks and know that I probably need more bonds to balance the portfolio.  I plan on working at least 10 more years until FIRE.

Thank you in advance for your responses

A few examples for reference:

The All-weather portfolio - Dalio came up with for this strategy and promoted by Tony Robbins:

    30% Stocks
    40% Long-Term Bonds
    15% Intermediate-Term Bonds
    7.5% Gold
    7.5% Commodities

Rick Ferri’s Two-Fund Lazy Portfolio
    60% stocks
    40% bonds


Taylor Larimore’s Three-Fund Lazy Portfolio
Developed by the guy who Jack Bogle called “The King of the Bogleheads,” this fund is another one that’s pure 60/40 rule. However, unlike the aforementioned two-fund portfolio, this one suggests investing in both international index funds as well as stock market index funds.

The percentages for the asset allocation look like this then:

    42% U.S. stocks
    18% international stocks
    40% bonds

Dr. Bernstein’s “No-Brainer” Lazy Portfolio

As a neurologist turned financial wizard and author of The Intelligent Asset Allocator and The Birth of Plenty, Dr. William Bernstein has championed the power of the index fund over individual stocks and bonds for YEARS. So it’s no surprise that he suggests you put your money in a lazy portfolio that’s made of a few of them.

One portfolio that he suggested in The Intelligent Asset Allocator is called the “No-Brainer” Portfolio, and is comprised of four equal funds:

    25% U.S. stocks
    25% small-cap U.S. stocks
    25% international stocks
    25% bonds

You can see why it’s a “no-brainer.” This portfolio also gives investors a chance to diversify their risk (since there are four equally distributed funds) over time.
Here are his suggestions for the funds you can invest in:

    Vanguard 500 Index (VFINX)
    Vanguard Small-Cap Index (NAESX)
    Vanguard Total International Stock Index (VGTSX)
    Vanguard Total Bond Market Index (VBMFX)


**
most of this was referenced from a random internet search but very helpful
https://www.iwillteachyoutoberich.com/blog/lazy-portfolio/

[caracarn]

My allocation for 2018 is the same as it has been for 2017 and years before it and the same as it will be for 2019 and the years after it.  Point of simple buy and hold investing is to select a small list of index funds and use it, not try to determine and asset mix and think I'm doing anything other than market timing.  My mix is 85% stock/15% bonds.  This was arrived at by comparing historical rates of various mixes from Bogle sources and finding that 90/10 . 80/20 and 85/15 were very close to each other (and very close to other mixes) and determining what my risk tolerance was and adjusting down a bit from the 90/10 I had used very early on.  My expectation at this time is to ride 85/15 forward.

[damnedbee]

I have the following allocation based on the Bogleheads four-fund lazy portfolio:

40% US stocks
30% International stocks
22% Bonds
8% REIT

I've been using this allocation for a few years and feel comfortable in terms of risk tolerance (the recent correction was a good test of that). No plans to change for 2018 as that would be market timing.

[hadabeardonce]

I mimic a Vanguard target date fund using their admiral funds:

7% VBTLX Bond US
3% VTABX Bond International
35% VTIAX Stock International
55% VTSAX Stock US

For accounts where that's not an option, I use the target date fund.

[Laura33]

My allocation for 2018 is the same as it has been for 2017 and years before it and the same as it will be for 2019 and the years after it.

+1.  I have maybe 5-7% in cash (partly because I like having cash, partly because DH has never gotten around to do anything with his last couple of bonuses), and the rest in mutual funds.  Our core MF holdings (80% overall?) are broad market indexes (e.g., VTSAX).  The rest is invested per our personal preferences -- I gravitate to value investing and international diversification, so I have an international fund and a value fund in my 401(k)/Roth; DH likes growth investing and stockpicking, so he has some growth funds and then a brokerage account for an old IRA.  And yes, we do tend to balance each other out and should just throw everyting at VTSAX and call it good.  :-)  And we are heading in that direction -- honestly, we used to spend a lot more time searching for just the right funds/allocation, but the older we get, the less we care, and the more we just default to VTSAX.

The only thing that I see changing is that in a couple of years we will need to start setting up a bond/CD ladder -- but that is based on our needs (e.g., RE cashflow), not what we think the market is going to do.

[ricgnzlzcr]

My asset allocation is different from most because my priorities are different. Based on my current savings rate I could retire in 17 years. That's too long for me. Instead I've transitioned to a low-effort job that gives me lots of free time.

I like to keep 2-years of savings in mostly cash since I like having the option to take on different projects. I actively manage the rest of my portfolio.

If I invested with a passive asset allocation I would probably use a conservative allocation like the Ray Dalio one or the Golden Butterfly from PortfolioCharts.com since I can't handle seeing my portfolio drop by 50% and know that with a high savings rate the difference in being mostly in stocks and a more conservative portfolio is minuscule over the 17 years it'll take me to FIRE.

[stephen902]

I'm 50/15/15/20 = SP500, Smallcap, Midcap, international. I'm 35 and in this for the longer haul, so I have zero bonds.

[SwitchActiveDWG]

My asset allocation is 70% US total stock market index and 30% international stock market index. All as vanguard admiral shares with the exception of my 401k that uses Black Rock/iShares.