How does my portfolio look?

[MarieL]

I am using SoFi Invest because I love that you can invest in fractional shares instead of buying a whole share in one lump sum. This has been very budget friendly for me, since I only have $100 per month (for now) to allocate.

I would like to know if I am making the right choices with these stocks or should I consider others? I tried to pick ones that were high dividend yields, REITs, and all the Vanguard ones that I have access to.

Trying to do all the smart things on my path to FI/RE!

Thank you in advance!

 

[The Cosmic Avenger]

That seems like a lot of money in stocks. I didn't put any money in individual stocks until I felt I had some "extra" to play with (that was outside of my previous retirement plan). It will also make it really difficult to maintain an asset allocation, as you'll have to rebalance among all these positions. I use one index fund and one bond fund, and that's it (with some small exceptions, like I mentioned). It's not really lazy, it's easy, which IMO is more sustainable. https://www.bogleheads.org/wiki/Lazy_portfolios

 

[Golden sunsets]

Too many holdings. If it were me I would buy one portion of a US total stock market fund, one portion of an international stock market fund and the final portion of a total bond fund. I would probably do 65/20/15.

 

[MarieL]

That seems like a lot of money in stocks. I didn't put any money in individual stocks until I felt I had some "extra" to play with (that was outside of my previous retirement plan). It will also make it really difficult to maintain an asset allocation, as you'll have to rebalance among all these positions. I use one index fund and one bond fund, and that's it (with some small exceptions, like I mentioned). It's not really lazy, it's easy, which IMO is more sustainable. https://www.bogleheads.org/wiki/Lazy_portfolios

I'm not sure I understand what you mean. The only individual stock I invested in was Tesla. The rest are ETFs, index and mutual funds.

Which index and bond fund did you invest in?

The only Vanguard ones I have access to from the Bogleheads website is VTI and BND (which I'm already investing in). But I will say, I do like the Coffeehouse portfolio since it includes REITs

 

[MarieL]

Too many holdings. If it were me I would buy one portion of a US total stock market fund, one portion of an international stock market fund and the final portion of a total bond fund. I would probably do 65/20/15.

I don't understand. How can you have too many holdings? I thought diversifying was key? Or do you mean I'm investing in more than one of the exact same holdings so it's redundant?

 

[The Cosmic Avenger]

Sorry, I saw TSLA and a bunch of symbols I didn't recognize (I recognized a few Vanguard symbols, even though I don't currently have an account there), and assumed a few of the others were stocks.

Right now I'm mostly 75% FXAIX (S&P 500 index fund) and 25% FXNAX (US bond fund), with a few minor exceptions. The FXAIX has an expense ratio of 0.015%, so I feel like they'll do a better job diversifying than I would for practically nothing. I thought about splitting the equity by adding a global index fund, but the ERs were higher, and I don't feel like it will add anything.

Anyway, IMO most of the index funds are plenty diversified. If you want to spend your time rebalancing among all those, then more power to you! I prefer set-it-and-forget-it portfolios...even though I like to check them often, it does make rebalancing incredibly easy.

 

[pb4uski]

I agree... way too many tickers. Just VTI would be sufficient and simpler. VTI owns over 3500 different companies... that's where your diversification is.

You could winnow it down to VTI, VXUS, BND... and if you wish TSLA.

But to be honest given the modest amount invested, just VTI or VT would be fine.

 

[HarveyS]

I agree... way too many tickers. Just VTI would be sufficient and simpler. VTI owns over 3500 different companies... that's where your diversification is.

You could winnow it down to VTI, VXUS, BND... and if you wish TSLA.

But to be honest given the modest amount invested, just VTI or VT would be fine.

+1.

OP, Good for you to have a solid savings plan! However, I think your current plan indicates you are over-thinking this.

 

[Midpack]

I agree with the others, way too many holdings even if you had a large nest egg. Like many here, our nest egg is 7 figures and we have 10 mutual funds. If it wasn’t for the tax impact of selling, I’d be happy with 5-6 mutual funds. Even 3 would be enough to start.

These are good models https://www.bogleheads.org/wiki/Lazy_portfolios

 

[VanWinkle]

I agree with the other replies, simple will be easier to maintain. If you own VTI, you already own Tesla within the fund. If you want to gamble with 5% of your money on Tesla, that is fine to have the individual stock as well. Just keep it to 5% of less of your total. I would use VTI and BND to start with until your assets reach 6 figures.

Good luck to you,

VW

 

[jollystomper]

I'll join in the "too many holdings" chorus. Keep it simple. My 7 figure IRA has only had 4 index funds in it since I started it over 35 years ago.

 

[The Cosmic Avenger]

I am now realizing that I really should have started by saying: good for you for starting! Getting started is the hardest part, IMO, after that there's always more to learn. I've had to get used to not being an instant expert, and realizing that I could have done better if I had known about this or that earlier. Instead, I try to focus on the fact that I did start earlier than most people (not here, but in general!), and I have been doing better and better at it as I learn more.

 

[Golden sunsets]

I don't understand. How can you have too many holdings? I thought diversifying was key? Or do you mean I'm investing in more than one of the exact same holdings so it's redundant?

A us stock index fund is diversification without duplication. Same with the international index fund and the bond fund.

 

[MarieL]

I like the Core Four 80/20 portfolio on Bogleheads (I've been really into REITs lately since I'm not one to do the full-on real estate stuff that I've seen a lot of people do). Would that be good to switch to for someone in their 30s trying to FIRE?

The Vanguard Total Stock Market I have access to on SoFI is: VTI and VOO. Should I do both? or is that redundant?

I assume the 'Total International Stock' are these? VEA and VWO? It doesn't explicitly say 'Total International Stock' on them, but these are the only ones I have access to on SoFi. I see companies like Alibaba and a Taiwanese company on there, so that was why I assumed that this was the alternative to the 'Total International Stock' that Bogleheads was referring to.

I have REITs (VNQ), and the Total Bond Market (BND) so it looks like I'm good there.

So I can pretty much sell the rest and allocate the 80/20 amount to those four areas?

 

[pb4uski]

I like the Core Four 80/20 portfolio on Bogleheads (I've been really into REITs lately since I'm not one to do the full-on real estate stuff that I've seen a lot of people do). Would that be good to switch to for someone in their 30s trying to FIRE?

The Vanguard Total Stock Market I have access to on SoFI is: VTI and VOO. Should I do both? or is that redundant?

I assume the 'Total International Stock' are these? VEA and VWO? It doesn't explicitly say 'Total International Stock' on them, but these are the only ones I have access to on SoFi. I see companies like Alibaba and a Taiwanese company on there, so that was why I assumed that this was the alternative to the 'Total International Stock' that Bogleheads was referring to.

I have REITs (VNQ), and the Total Bond Market (BND) so it looks like I'm good there.

So I can pretty much sell the rest and allocate the 80/20 amount to those four areas?

VOO is the S&P 500.... so-called large-cap companies... 500 stocks.... VTI is the entire US stock market.... ~3500 companies.

If you are 30ish, go with VTI.... VTI alone is sufficient... no need for bonds (BND) at your age. If you would rather own the world's stocks rather than just US stocks, then you could add in some VXUS which covers stocks outside the US.

Or alternatively, VT covers both the US and foreign stocks so you could buy just that one fund if you want simple.

Either way, at 30ish one or two funds is all you really need.

 

[Midpack]

Don't act without thinking this through OP, you are paying fees for every trade despite what the ad copy say. SoFi isn't doing this for free...

https://qz.com/1560010/is-sofi-invests-brokerage-service-really-free/

I guess the only upside is your portfolio is so small the commissions and taxes won't amount to much, but you'll want to be aware of commissions, fees and taxes as your portfolio grows.

 

[MarieL]

Don't act without thinking this through OP, you are paying fees for every trade despite what the ad copy say. SoFi isn't doing this for free...

https://qz.com/1560010/is-sofi-invests-brokerage-service-really-free/

I guess the only upside is your portfolio is so small the commissions and taxes won't amount to much, but you'll want to be aware of commissions, fees and taxes as your portfolio grows.

Thanks for the heads up! Yeah I wanted to start small so I can get the portfolio in order without dealing with the higher fees later on.

Btw, I realized I DO have access to more Vanguard funds (see pics)

 

[Midpack]

Don't feel bad about starting with too many holdings, that's what most new investors do. They aren't sure what to buy so they buy lots of things to compensate, and they've read diversification is good - it is but mutual funds are already more diversified than most individual investors ever could manage themselves. That's why you only need a handful of funds for a solid portfolio.

Just make a plan on what you should hold, sleep on it for a month, and then migrate over.

 

[MarieL]

Thank you so much for this advice! Yes, I’ve always read about diversification and understood it to mean what I was currently doing with my allocations. I will definitely readjust accordingly

 

[Qs Laptop]

If you are retired and you have all day to do whatever you want, and you are relying on income from your investments to live on, the last thing you want to bother with is managing a portfolio. Better to stick all your money into one or two index funds, take whatever the market doles out, and be happy about it. [/sarcasm]

 

[OldShooter]

@MarieL, I teach a six-hour Adult-Ed class on investing. On the wrap-up slide I tell them this: "Investing is boring. If you're not bored, you're not doing it right."

With that portfolio I don't think you're bored. To echo others, it is way too complex. Waaaay too complex.

With regard to diversification you seem to be making a common mistake. The point of diversification is to own a large number of stocks (probably over 100) arranged across size, line-of-business, and geographic categories. With that number (or more) the zigs and the zags of individual stocks cancel each other out. The academics would say "You have diversified away individual stock risk, leaving only market risk, which cannot be diversified away in an equity portfolio." So ... one mutual fund with the proper constituents (like "total US market") is all you need to be diversified. And, actually, if you add little bits and snippets like a small cap fund you are reducing diversification by a tiny amount.

Back to the portfolio, I suggest that you lock your frenzied investing mouse in a closet and take time to read "The Coffee House Investor" by Bill Schultheis and "The Bogleheads Guide to Investing" by Taylor Larimore et al. After those, "Winning the Loser's Game" by Charles Ellis or "A Random Walk Down Wall Street" by Burton Malkiel.

For reference, DW and I have 90% of our seven-figure portfolio in just three funds: VTWAX, total world stocks, and two funds/US Total Market and International Total Market in a proportion that makes them behave like VTWAX. Really we should sell the two and buy VTWAX; we only hold them for obsolete historical reasons. Buying the world is the ultimate in diversification.

Relax. Get bored. And continue your good savings practices. You will win the game with patience and without needless effort.

 

[travelover]

What is SoFi and why are you using it?

 

[MarieL]

What is SoFi and why are you using it?

It's a micro-investing app. Kind of like Robinhood, Acorns, and FirstTrade. I like using SoFi because it allows you to invest in fractional shares instead of spending more to buy the whole share. I may eventually move to a place like Vanguard if/when my portfolio value gets large enough, but for now, this has been sufficient for me for my budget, and will help me get a little better understanding of investing.

 

[kgtest]

I sort of set some investing "principles and guidelines"

1. is to not be too risky (like a reckless A/A)
2. 10 to 20% is reserved for Individual Equities (currently most of mine is AAPL)
3. When the other 90% of my portfolio moves 5% +/- I rebalance by basically buying into the mix that is necesarry.

For instance I own VUG (LargeCap) 53.4%, VOT (MidCap) 25.2% and VBK (SmallCap)21.4% Soo, when LargeCap pushes up to 55% I will start buying VBK (SmallCap) since that is the laggard. I will buy SmallCap at a discount relative to the rest of my asset classes for a while until it becomes over-priced again (+30% of my portfolio) That might not be for a year or so here.

This is really easy in terms of accumulation. I do the same thing every year and occasionally need to switch future contributions to match my Target Asset Allocation (A/A). I have projected with our current money going into Large and MidCap that I need to change my future withholding next month or I will exceed 55% LargeCap. I go into my 401k plan, make that change next month...and sit, wait and watch until that threshold is exceeded in any direction again. To me, this is like the second easiest thing to do than VTI. Still very diversified (although tilted to growth). I am 100% stocks so you could use this theory and introduce bonds as well but I have no need with low-risk investments of Real Estate rentals.

 

[MarieL]

I sort of set some investing "principles and guidelines"

1. is to not be too risky (like a reckless A/A)
2. 10 to 20% is reserved for Individual Equities (currently most of mine is AAPL)
3. When the other 90% of my portfolio moves 5% +/- I rebalance by basically buying into the mix that is necesarry.

For instance I own VUG (LargeCap) 53.4%, VOT (MidCap) 25.2% and VBK (SmallCap)21.4% Soo, when LargeCap pushes up to 55% I will start buying VBK (SmallCap) since that is the laggard. I will buy SmallCap at a discount relative to the rest of my asset classes for a while until it becomes over-priced again (+30% of my portfolio) That might not be for a year or so here.

This is really easy in terms of accumulation. I do the same thing every year and occasionally need to switch future contributions to match my Target Asset Allocation (A/A). I have projected with our current money going into Large and MidCap that I need to change my future withholding next month or I will exceed 55% LargeCap. I go into my 401k plan, make that change next month...and sit, wait and watch until that threshold is exceeded in any direction again. To me, this is like the second easiest thing to do than VTI. Still very diversified (although tilted to growth). I am 100% stocks so you could use this theory and introduce bonds as well but I have no need with low-risk investments of Real Estate rentals.

I'm so confused by this process! @.@ Is this method explained on the Bogleheads website? I'm not sure when to know when a certain withholding exceeds a certain percentage.