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Medium-term all stock portfolio help
Old 07-11-2017, 03:33 PM   #1
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Medium-term all stock portfolio help

Hello,

Newbie here - and a huge fan of this site! I was hoping for some help on picking a portfolio for a particular goal.

DH recently got a new job, and we got a "surprise" distribution from his ESPP account at his old job - we knew it was there, but had not really looked at it for planning purposes. Since this is kind of an extra bonus, and not really huge (less than $10K), we decided to put it away in a "buy a second home" fund.

So we plan to put it in a taxable account, and fund that account maybe $5K to $6K/year going forward for the next 10-15 years - and use the money to buy real estate in a sunshine state when the next market correction hits.

I was going to go with the Vanguard lazy three-fund portfolio strategy (we are definitely buy-and-forget-about-it people, in case it wasn't obvious), but figured I would ask here - where would you put this money if you had this specific goal?

What I am looking for is:
- all stock
- it should reflect inverse RE - we will specifically use it if and when the FL/AZ RE market goes soft.
- open to risk, since if it all tanks, we would just not execute on the plan


All suggestions will be welcome! We are not market savvy investors, so please be kind!
Thanks!
Desi
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Old 07-11-2017, 04:44 PM   #2
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I would suggest SPY, VTI, or RSP, all full equity ETF's that I own.
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Old 07-11-2017, 05:13 PM   #3
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Quote:
Originally Posted by dg001 View Post
Hello,

Newbie here - and a huge fan of this site! I was hoping for some help on picking a portfolio for a particular goal.

DH recently got a new job, and we got a "surprise" distribution from his ESPP account at his old job - we knew it was there, but had not really looked at it for planning purposes. Since this is kind of an extra bonus, and not really huge (less than $10K), we decided to put it away in a "buy a second home" fund.

So we plan to put it in a taxable account, and fund that account maybe $5K to $6K/year going forward for the next 10-15 years - and use the money to buy real estate in a sunshine state when the next market correction hits.

I was going to go with the Vanguard lazy three-fund portfolio strategy (we are definitely buy-and-forget-about-it people, in case it wasn't obvious), but figured I would ask here - where would you put this money if you had this specific goal?

What I am looking for is:
- all stock
- it should reflect inverse RE - we will specifically use it if and when the FL/AZ RE market goes soft.
- open to risk, since if it all tanks, we would just not execute on the plan


All suggestions will be welcome! We are not market savvy investors, so please be kind!
Thanks!
Desi
I think I missed the boat on getting Florida home on a fire sale. If your tracking the market there, and you see a nice ocean front, 2 bedroom, 2 bathroom with a balcony in Boca, thats really cheap, and you dont want it PM me, thanks.
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Old 07-11-2017, 05:33 PM   #4
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Quote:
Originally Posted by dg001 View Post
...

What I am looking for is:
- all stock

All suggestions will be welcome! We are not market savvy investors, so please be kind! i
Actually, all the research says that thinking that one is a market savvy investor is hazardous to your wealth.

The real world is:

1) Passive strategies beat virtually all active strategies over the long haul, 5+ years.

2) While there is a tiny fraction of active managers who outperform, it is impossible to identify them ahead of time.

Here is a great page of videos: https://famafrench.dimensional.com/videos.aspx I suggest that you start with "Is This a Good Time for Active Investing? " and "Identifying Superior Managers "

Specific investments that will beat the vast majority of managers:

100% in a total world stock market fund like Vanguard Total World Stock Index

or a split between a total US market fund and a total International ex US market fund. Using the single fund is almost the same as a 50-50 split between these two funds. If you want more home country bias (lots of opinions on this) you can increase the % you put into the total US market fund. See also "Home Bias " There is a Vanguard study that says 30-40% international minimizes volatility in a stock portfolio.

Shop for lowest fee funds. There is a price war going on right now and we investors are the beneficiaries.

If you want to do a little reading, Google for "S&P SPIVA Report Card" and "S&P Manager Persistence Report Card." These are semiannual reports that always say the same thing: "Passive beats active" and "it's impossible to identify a winning active manager ahead of time."
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Old 07-12-2017, 09:14 AM   #5
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..... 100% in a total world stock market fund like Vanguard Total World Stock Index ....
This. KISS.
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