Join Early Retirement Today
View Poll Results: Are you a lumper or a splitter?
Lumper 34 52.31%
Splitter 24 36.92%
Neither 7 10.77%
Voters: 65. You may not vote on this poll

Reply
 
Thread Tools Display Modes
Poll:Lumper or Splitter?
Old 10-10-2018, 09:16 AM   #1
Thinks s/he gets paid by the post
 
Join Date: Aug 2007
Posts: 2,857
Poll:Lumper or Splitter?

I'm debating if I should simplify my portfolio and this made me wonder how other people manage their portfolios? If you choose to vote, it'd also be great if you added why you chose one of these options.

Of course, I know there are many here that are neither lumper or splitters. I added a poll option for you so you don't feel left out. I also suspect that there are some here that are somewhere in between. Such as holding a chunk in Wellesley/Wellington. I'd tend to think that would still fit in the lumper category, but I'll let you decide on how to answer.

For those that aren't familiar with the terms, a lumper is somebody who invests in US/Intl Total Stock/Bond Indexes and Splitters are those that slice and dice their portfolios by overweighting with other asset classes, such as Value/Growth, REITS, Small Cap, etc.

I've always been a splitter, but lately I've been thinking if I should be come a lumper. I've tracked my portfolio performance to Vanguard's Life Strategy Growth Fund. That fund is 80/20, with a 60/40 US/Intl Equity split. The 20 is split in a US/Intl Total Bond fund.

My portfolio has a different assets, but similar equity/bond exposure and for the last decade, it's tracked within about 1%. This makes me wonder if I should even bother with a slice/dice portfolio.

What has me concerned is:

1. Total US is large-cap heavy and that has done really well over the last 10 years. If US large-cap starts to lag, then it could be that a slice/dice portfolio might perform better.

2. I've held a 50/50 US/Intl equity mix and I still managed to track to a fund with a 60/40 mix. In a period where Intl has lagged the US. This goes back to #1: I might be dealing with recency bias.

3. Volatility. In all the modeling I did ages ago, a slice/dice portfolio appeared to have less volatility. At least that's what the math says. But I'm wondering how much this really matters?

Should I be concerned about anything else?
__________________
Eat, Drink and Be Merry.
tulak is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-10-2018, 10:49 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 13,202
Lumper. Most of my equities are in taxable. I don't want to be taking the tax hit to be selling to keep things in balance. I also don't want the effort to slice and dice when I'm not seeing an advantage to it. I think the fees on the slice and dice funds are higher, aren't they?

To your point 1, Total US IS large-cap heavy because the value of large caps make up the bulk of the market. If you want to track the total market, you will be large-cap heavy. If you would rather slice/dice to weigh one group over another, you could still use Total US as your core and also buy the funds in the group you want heavier, rather than buying all the sectors with more in some than others. If you want to totally leave out some groups this won't work, but that means your goals are totally different, so of course your method has to be different.
RunningBum is offline   Reply With Quote
Old 10-10-2018, 11:05 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,266
Lumper.... go to funds are Total Stock and Total International Stock (over 50% in just those two tickers). Usually Total Bond for fixed income but currently parked in VMMXX while rates are rising.... plus some Total International Bond... those 4 tickers are 77% of total.... most of rest is PenFed CDs and some emerging market equities and fixed income.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Old 10-10-2018, 11:35 AM   #4
Thinks s/he gets paid by the post
Red Badger's Avatar
 
Join Date: Jan 2017
Location: Hog Mountian
Posts: 2,077
Lumper.

Equities are 90% total domestic market & 10% total international.
Bonds are 1/2 TIPS and 1/2 total bond market.
Short term are some lumpy CD's (varying amounts/varying duration) that go out about a year.

Happy to keep a simple 4 fund portfolio and just ride the market ups and downs.
__________________
Never let yesterday use up too much of today.
W. Rogers
Red Badger is offline   Reply With Quote
Old 10-10-2018, 12:01 PM   #5
Thinks s/he gets paid by the post
nash031's Avatar
 
Join Date: Jun 2013
Location: Bonita (San Diego)
Posts: 1,795
Lumper, but I have probably a dozen individual investments across my accounts. TSP itself is 5 different funds, but I weight those to make them close to VTSAX, VTIAX, and my desired bond allocation. Outside TSP, most of my investments are VTSAX and VTIAX, with small individual stock allocations in my Roth IRA.

But on the whole, I manage my AA across all of my accounts, and make my AA adjustments inside my IRA or TSP, and by adjusting my contributions to achieve a desired end (e.g. I've been buying more international and more bonds during the current domestic stock run-up).
__________________
"So we beat to our own drummer in the sun;
We ask for nobody's permission to run.
I just wanna live in a world like that;
Now I'm gonna live in a world like that!" - World Like That, O.A.R.
nash031 is offline   Reply With Quote
Old 10-10-2018, 12:07 PM   #6
Full time employment: Posting here.
Retch The Grate's Avatar
 
Join Date: Jul 2010
Location: San Francisco
Posts: 861
Lumper, everything is in Vanguard Total Stock Market, except for one IRA that is in the S&P500 that I need to switch over at some point.
Retch The Grate is offline   Reply With Quote
Old 10-10-2018, 12:14 PM   #7
Thinks s/he gets paid by the post
 
Join Date: Nov 2014
Location: Austin
Posts: 1,382
Splitter: Lots of Mid and Small Cap Value plus a touch of EM and Int'l small cap. Bonds are intermediate treasuries. Then TIPs/Ibonds to generate an inflation adjusted income stream on top of SS.
big-papa is offline   Reply With Quote
Old 10-10-2018, 12:53 PM   #8
Thinks s/he gets paid by the post
Cobra9777's Avatar
 
Join Date: Jul 2012
Location: Texas
Posts: 3,024
I guess I'm a splitter. 60% of the portfolio is Total Stock, Total Bond, Total International Stock, and Total International Bond. The rest falls mainly into three categories: (1) real estate... mix of individual rental properties and VNQ (REIT), (2) high-dividend equity like VYM and two others, and (3) corporate bond ETFs (LQD and HYG). We like owning real estate in addition to stocks/bonds, plus all three boost income such that we rarely sell shares.

I've tracked results against a 50/20/30 benchmark (VTI/VXUS/BND) and performance is sometimes better, sometimes worse, but never by a significant amount. In fact, I just compared the two portfolios in Portfolio Analyzer. Over the last 7 years, our portfolio outperformed the benchmark, but only by 38 basis points (CAGR). Other stats are nearly identical. Certainly a case could be made for simplification, but at this point, we sort-of like the income and many of the funds are in taxable with very significant embedded CGs.
__________________
Retired at 52 in July 2013. On to better things...
AA: 85/15 WR: 2.7% SI: 2 pensions, SS later
Cobra9777 is offline   Reply With Quote
Old 10-10-2018, 01:13 PM   #9
Recycles dryer sheets
 
Join Date: Nov 2017
Location: Green Bay
Posts: 226
Historically I've been more of a splitter. While accumulating our nest egg, I enjoyed choosing where to invest new money, especially my annual bonus which was invested after tax so there was no investment choice limitations.

Now that we are retired, I plan to move to more of a lumping strategy. I will use re-balancing and Roth conversions to transition to this to strategy.
Splash is offline   Reply With Quote
Old 10-10-2018, 01:18 PM   #10
Thinks s/he gets paid by the post
38Chevy454's Avatar
 
Join Date: Sep 2013
Location: Cincinnati, OH
Posts: 4,354
I guess I fall into the splitter category, but even though I have some sector and other specific funds, they are all widely held diversified funds. No individual stocks owned directly. Did have some company stock in 401k, but sold that when I moved those funds to IRA. I do hold a lot of what OP would consider lumper type in my accounts though.
__________________
The problem isn't artificial intelligence, it's natural stupidity.

You can't spend yourself to prosperity.

Semi-Retired 7/1/16: working part-time (60%) for now [4/24/17 changed to 80%]
Retired Aug 2, 2017; age 53
38Chevy454 is offline   Reply With Quote
Old 10-10-2018, 05:25 PM   #11
Full time employment: Posting here.
Kwirk's Avatar
 
Join Date: Mar 2006
Posts: 524
Lumper. I'm lazy and would rather think about other things.
__________________
Prepare for the future. Everything changes.
Kwirk is offline   Reply With Quote
Old 10-10-2018, 05:29 PM   #12
Thinks s/he gets paid by the post
 
Join Date: Nov 2006
Posts: 1,639
Lumper. 95% of our retirement portfolio is in Life Strategy Moderate. I do it for simplicity. It's easy to tell if I've lost money by just looking at one ticker - especially today.
PatrickA5 is offline   Reply With Quote
Old 10-10-2018, 06:27 PM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: NC
Posts: 21,204
I’m a splitter with value, small and (intl) emer mkts tilts - but it hasn’t made a big difference. So I’d be comfortable as a lumper and expect to slowly simplify in the decades ahead. I’ve already gone from 11 funds to 9.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 10-11-2018, 05:03 AM   #14
Thinks s/he gets paid by the post
Badger's Avatar
 
Join Date: Nov 2008
Posts: 3,395
Between the two of us it is mainly Wellesley, Wellington, MM, and then a few individual stocks to play with. I would sell the stocks but they are taxable and I don't want to take the tax hit. Unless there is an unforeseen catastrophic event they will go to the children anyway at a different basis.


Cheers!
Badger is offline   Reply With Quote
Old 10-11-2018, 05:39 AM   #15
Full time employment: Posting here.
racy's Avatar
 
Join Date: May 2007
Posts: 881
Splitter.
51% bonds: Short term corp, Inter-med term corp, Wellesley, hi-yield.
44% stocks: US Stk market, Sm Cap, Int'l Sm Cap, Healthcare, REIT, Wellesley
5% farm land trust deeds & mortgage dependent promissory notes

Why? I enjoy it. But, as I get older & mental competency declines I'll get lumpier. (I trust someone will let me know when that point arrives).
__________________
"It is better to have a permanent income than to be fascinating". Oscar Wilde
racy is offline   Reply With Quote
Old 10-11-2018, 07:45 AM   #16
Thinks s/he gets paid by the post
 
Join Date: Jul 2013
Posts: 1,879
Poll is somewhat confusing, as I don't usually see the term "splitter" for somebody that tilts their portfolio from the standard 3 fund boglehead prescription...

Anyway, we tilt to small value. Otherwise quite vanilla: 40 US, 20 ex-US, 40 total bond.
mrfeh is offline   Reply With Quote
Old 10-11-2018, 12:08 PM   #17
Thinks s/he gets paid by the post
 
Join Date: Jun 2016
Posts: 4,661
Splitter, but moving more towards lumper as we simplify our portfolio. Transition will take several years as we have significant unrealized capital gains.
Scuba is offline   Reply With Quote
Old 10-11-2018, 08:57 PM   #18
Thinks s/he gets paid by the post
 
Join Date: Aug 2007
Posts: 2,857
Thanks for the responses. So far it looks like there are a few more lumpers than splitters, but not a big difference.

Quote:
Originally Posted by mrfeh View Post
Poll is somewhat confusing, as I don't usually see the term "splitter" for somebody that tilts their portfolio from the standard 3 fund boglehead prescription...
The term splitter comes from The Four Pillars of Investing by Bernstein. Or at least that's where I got it from. I'm not sure if he originated the term or took it from somewhere else.

There are more references out there using the same terminology. For those that are interested, I found a good summary about Lumpers vs Splitters here: Kevin On Investing: Lumpers vs. Splitters

But I think most people around here are already familiar with the concepts.
__________________
Eat, Drink and Be Merry.
tulak is offline   Reply With Quote
Old 10-12-2018, 05:50 AM   #19
Thinks s/he gets paid by the post
 
Join Date: Nov 2014
Location: Austin
Posts: 1,382
Not too surprised by the poll results. This debate goes on endlessly over at Bogleheads with the simplicity crowds (2 or 3 fund portfolio) vs. everybody else including slicer/dicers, tilters, factor geeks, etc.

Heck, there was recently an epic 1000+ posting thread, which is finally beginning to slow down, about whether holding market weight international makes any sense. And it's not like it was the first time it was ever discussed.
big-papa is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
CATV Splitter kaneohe Other topics 29 07-18-2017 05:59 AM
Cable Router/Splitter Question yakers Other topics 24 05-11-2017 08:37 AM
Poll: Eat the best first, or last (a totally trivial poll) Midpack Other topics 10 11-28-2012 06:25 AM
Poll: Did you answer this poll? Midpack Other topics 22 01-24-2012 07:59 AM
Poll About Captain Honors Poll TromboneAl Other topics 10 01-04-2011 07:40 PM

» Quick Links

 
All times are GMT -6. The time now is 10:38 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.