More aggressive allocation

[sergio]

Hey all!

I'm looking for some advice on making my taxable brokerage account allocation a little more aggressive. My current allocation is approximately 70% VTI (total stock market) and 30% VXUS (total int'l stock market). I'd like to make it something like 60% VTI, 25% VXUS, and 15% X, where X is something a little riskier but potentially more rewarding. I currently am considering some combination of the following ETFs:

• VB/VBK/VBR (US small cap/small cap growth/small cap value ETFs)
• VSS (int'l small + mid cap ETF)
• VDE (energy ETF) or VHT (health care ETF)
• VWO (emerging markets ETF)

I understand that I would be over-weighting things already contained in either VTI or VXUS. This is my "retire early" account to hold me over until I'm 59 and can withdraw from my Roth IRA and 401k. I'm 28 years old and would like to retire sometime between 45 and 50, which makes my time frame around 20 years. Any suggestions would be super appreciated !

Thanks so much everyone!

[utrecht]

I probably wouldn't go with 15%, but VHT would be my choice. Health Care has been one of the best sectors for a long time and I don't see it slowing down anytime soon.

[eta2020]

Quote:

Originally Posted by sergio Hey all! I'm looking for some advice on making my taxable brokerage account allocation a little more aggressive. My current allocation is approximately 70% VTI (total stock market) and 30% VXUS (total int'l stock market). I'd like to make it something like 60% VTI, 25% VXUS, and 15% X, where X is something a little riskier but potentially more rewarding. I currently am considering some combination of the following ETFs: VB/VBK/VBR (US small cap/small cap growth/small cap value ETFs) VSS (int'l small + mid cap ETF) VDE (energy ETF) or VHT (health care ETF) VWO (emerging markets ETF) I understand that I would be over-weighting things already contained in either VTI or VXUS. This is my "retire early" account to hold me over until I'm 59 and can withdraw from my Roth IRA and 401k. I'm 28 years old and would like to retire sometime between 45 and 50, which makes my time frame around 20 years. Any suggestions would be super appreciated ! Thanks so much everyone!

I love your allocation. Simple and great. You are on right track. If you can stick to your plan you will do great over a long time. You do not see often that simple and that good allocation as you have.

I would allocate maybe 20% to High Quality wide Moat equities. That is VIG and SCHD. That makes it a bit LESS aggressive with
tilt for High Quality. Quality pays off for people with 20 year time horizon.

You do not need more aggressive portfolio. You need quality tilt IMO.

[mrfeh]

Quote:

Originally Posted by eta2020 You do not need more aggressive portfolio.

+1

You are 100% equities. Great index funds, but I don't see why you want to be "more aggressive".

If you want a tilt, I suggest small-value (VBR). However, I would also suggest 10-20% of your portfolio in bonds. It won't hurt your returns (historically there is essentially no difference in returns between 80% equities and 100% equities).

[dallas27]

Quote:

Originally Posted by mrfeh However, I would also suggest 10-20% of your portfolio in bonds. It won't hurt your returns (historically there is essentially no difference in returns between 80% equities and 100% equities).

I have a really hard time, at this particular moment in macroeconomic history, believing 100 won't beat 80. You could certainly be right, but i just can't imagine this being a good bet at the zero bound.


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[sergio]

Quote:

Originally Posted by mrfeh +1 You are 100% equities. Great index funds, but I don't see why you want to be "more aggressive". If you want a tilt, I suggest small-value (VBR). However, I would also suggest 10-20% of your portfolio in bonds. It won't hurt your returns (historically there is essentially no difference in returns between 80% equities and 100% equities).

Why be more aggressive? I'm be willing to risk a bit of volatility over a 20-year period for the prospect of a (slightly) higher return. Again, this would be around ~10% of my taxable brokerage.

Also, does it make sense to put bonds in a taxable brokerage account? My tax-advantaged accounts (401k, HSA, and Roth IRA) are each 10-12% bonds.

[mrfeh]

Quote:

Originally Posted by sergio Why be more aggressive? I'm be willing to risk a bit of volatility over a 20-year period for the prospect of a (slightly) higher return. Again, this would be around ~10% of my taxable brokerage. Also, does it make sense to put bonds in a taxable brokerage account? My tax-advantaged accounts (401k, HSA, and Roth IRA) are each 10-12% bonds.

Ah, I wasn't aware we were discussing a portion of your portfolio. I was under the impression the AA of your entire portfolio was 100% equities.

[racy]

Quote:

Originally Posted by utrecht I probably wouldn't go with 15%, but VHT would be my choice. Health Care has been one of the best sectors for a long time and I don't see it slowing down anytime soon.

+1