I think the OP was after the smallest % that the investor decides to hold. They have the holding for its performance not its components.Am I missing something? The math in many of the responses here doesn't seem consistent with how we generally think about diversification, does it?
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I think the OP was after the smallest % that the investor decides to hold. They have the holding for its performance not its components.
I have a very small percentage (<2%) of our portfolio assigned to "speculation".
If I ignore that, our smallest holding is about 7%.
But I guess I don't see the sense in the distinction. I don't buy SPY or BND for being SPY and BND, I buy SPY and BND to get exposure to all their components.I think the OP was after the smallest % that the investor decides to hold. They have the holding for its performance not its components.
I have .37% invested in VOO (most of the rest of our portfolio is in other funds, like SPY or EAFE). The reason I put some in VOO is because a few years ago I received a small inheritance from an aunt. We don't need that money, so I wanted to invest/set it aside for my young/future nieces and nephews. Having it "separate" just helps me with the mental accounting to keep the initial investment earmarked along with any growth. There's probably a better way to do it, but that's what I came up with at the time. I have maybe one other fund like this that is also <1% of the portfolio.
I'm open to suggestions if there's a better way to track something like this without doing a bunch of math, lol.
OK so my smallest individual holding is 0.14% but it is direct as I do not break down my funds that way since I have no control over them. Why would I say it is a holding if it can disappear overnight without any input from me? The idea behind holding 2 different ETFs is diversity. I agree that if they have many of the same holdings, it makes no sense.But I guess I don't see the sense in the distinction. I don't buy SPY or BND for being SPY and BND, I buy SPY and BND to get exposure to all their components.
It's not like SPY represents a single holding, it represents all it's holdings. I just don't see how looking at it any other way does anything useful. With that view, I could hold two different S&P500 funds/ETFs and ignore that they really are essentially the same investment? Makes no sense to me.
-ERD50
5% in vwo, which is emerging equity. Technically I hold to boost my overall emerging exposure to a total of 10% because i have much larger index holdings that are partially emerging(veu,vss).
I gave $100K to the Schwab robot as test porfolio a year or two ago. The robot likes to take tiny positions. As % of our total portfolio these are ridiculous; as % of the robot's portfolio (shown) they are merely silly.
Vanguard Global ex-U.S. Real Estate Index Fund ETF Shares 1.7%
Schwab U.S. REIT ETFâ„¢ 3.6%
Schwab International Small-Cap Equity ETFâ„¢ 3.9%
Schwab Emerging Markets Equity ETFâ„¢ 3.9%
-Cash- 6.0%
Schwab Fundamental International Small Company Index ETF 6.3%
Schwab U.S. Small-Cap ETF 6.8%
Schwab Fundamental Emerging Markets Large Company Index ETF 7.2%
Schwab International Equity ETFâ„¢ 9.3%
Schwab Fundamental U.S. Small Company Index ETF 10.8%
Schwab U.S. Large-Cap ETF 11.2%
Schwab Fundamental International Large Company Index ETF 12.5%
Schwab Fundamental U.S. Large Company Index ETF 16.7%
Well, here's the rest of the story:... might be a slight advantage to my very simplistic approach. ... So my simple approach isn't that much simpler, and I have less diversification (whether it is needed or not). ...
Well, here's the rest of the story:
...
So ... my first benchmark was 65% total US market and 35% total international market, started on Jan 1 of 2015. No rebalancing. I call this one my "couch potato" (CP) portfolio.
I started the robot account on April 1 of 2015 and it has never outperformed the CP on a cumulative basis. Cumulative performance of the CP for 9 quarters to the end of 2Q17 is 19.9% and the robot is at 15% for its equity holdings (no drag from the cash it insists on holding). ...
....
Back to our regularly scheduled program: I don't think you need to feel like this complicated robot portfolio offers any significant advantage compared to much simpler approaches.
After looking at a number of professionally managed portfolios it is my suspicion that they are complicated because the professionals want their customers to believe that investing is complicated, not because the complication brings any financial benefits.