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08-02-2021, 06:43 PM
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#1
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Confused about dryer sheets
Join Date: Aug 2021
Location: San Jose
Posts: 2
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My passive portfolio
After years of mixed results at stock picking, I have settled down on this portfolio. I got motivated after reading JL Collin's book. He advocates VTSAX. I have adopted the below: Any comments. Am I doing something that is wrong.
Appreciate your feedback.
VGT - 33%
QQQ - 33%
SMH - 34%.
Thanks
Sai
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08-02-2021, 07:08 PM
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#2
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Full time employment: Posting here.
Join Date: Apr 2010
Posts: 717
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Quote:
Originally Posted by sairamss
After years of mixed results at stock picking, I have settled down on this portfolio. I got motivated after reading JL Collin's book. He advocates VTSAX. I have adopted the below: Any comments. Am I doing something that is wrong.
Appreciate your feedback.
VGT - 33%
QQQ - 33%
SMH - 34%.
Thanks
Sai
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If you like it - fine.
I think there are some unknowns - your age and your risk tolerance.
Why VGT and SMH? What’s your thinking behind these selections?
As an alternative I’d suggest to consider:
VTI - xxx%
QQQ - yyy%
__________________
“The problem with the world is that the intelligent people are full of doubt, while the stupid people are full of confidence.”
(—Charles Bukowski)
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08-02-2021, 09:08 PM
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#3
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Confused about dryer sheets
Join Date: Aug 2021
Location: San Jose
Posts: 2
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Quote:
Originally Posted by wanaberetiree
If you like it - fine.
I think there are some unknowns - your age and your risk tolerance.
Why VGT and SMH? What’s your thinking behind these selections?
As an alternative I’d suggest to consider:
VTI - xxx%
QQQ - yyy%
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sorry for missing out on the details. My style is to invest in growth companies. My level of risk tolerance is aggressive. But, I want to spread out my risk. Hence investing in these. VGT and QQQ are Technology oriented. SMH is tilted towards the Semiconductor industry. I looked at the 10-year returns.
VGT - 10-year growth rate is 22% and expense ratio is 0.1%
https://investor.vanguard.com/etf/pr...erformance/vgt
QQQ - 10-year growth rate is 21%
https://www.invesco.com/qqq-etf/en/i...rformance.html
SMH is a newer ETF. 5 year growth is 37%.
https://www.vaneck.com/us/en/investm...uctor-etf-smh/
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08-03-2021, 04:28 AM
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#4
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Thinks s/he gets paid by the post
Join Date: Dec 2015
Location: Michigan
Posts: 4,942
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Your 3 choices are all tech and you have little diversification. I would suggest that you pick one of them for 25% and the rest VTI.
__________________
"The mountains are calling, and I must go." John Muir
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08-03-2021, 05:56 AM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,201
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+1 not diversified enough and too concentrated in tech
__________________
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
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08-03-2021, 06:02 AM
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#6
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Thinks s/he gets paid by the post
Join Date: Jun 2013
Posts: 2,518
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Just as stock picking exposes you to uncompensated risk, sector picking will do the same. I have not read JL Collons, but know who he is and I imagine he is index oriented without the tech tilt.
__________________
"Luck favors the prepared mind"
Pasteur
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08-03-2021, 08:16 AM
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#7
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Thinks s/he gets paid by the post
Join Date: Jan 2020
Location: Milwaukee
Posts: 3,941
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Also, I see that you location is San Jose, which leads me to speculate that you may be employed in the tech sector. If so, then having your employment prospects AND your investment prospects tied to one sector is generally advised against.
__________________
The closing years of life are like the end of a masquerade party, when the masks are dropped. -Arthur Schopenhauer, philosopher (1788-1860)
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08-03-2021, 12:29 PM
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#8
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gone traveling
Join Date: Apr 2021
Posts: 74
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If you read Collins' book and ended up with that portfolio I suggest a reread.
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08-03-2021, 03:56 PM
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#9
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Full time employment: Posting here.
Join Date: Jan 2008
Location: Flyover America
Posts: 679
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I did not look at each fund in detail but
1. You are tilted heavily toward tech
2. Guessing that the three funds selected overlap on several companies (i.e. duplicate)
VTSAX contains all the companies that are in the three index/funds you selected.....plus a lot more....
Tech sector has done very well in the last decade.......have no idea moving forward....so if you are ok losing a large % in any given year/decade/... (50+%) than
I wish you God's speed....
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08-04-2021, 10:40 AM
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#10
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Thinks s/he gets paid by the post
Join Date: Dec 2016
Posts: 1,290
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Like others have noted it is an extremely tech heavy portfolio. That doesn't mean it won't do well over time, but just know it isn't really diversified.
Also , forget your age, what is your investment time horizon?
"passive" investing always sounds simple, but truly staying put is challenging; most "passive" investors are not really disciplined and make moves based on emotions. Only you yourself know your investment temperament. In this long bull market what did you do when we went down almost 20% in 2011? or in August of 2015? or in December 2018?March 2020?
__________________
Retired 1/6/2017 at 50 years old
Immensely grateful
“The most important quality for an investor is temperament, not intellect.”—Warren Buffett
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08-04-2021, 01:55 PM
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#11
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Full time employment: Posting here.
Join Date: Aug 2019
Posts: 691
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The wrong thing is to be very heavily concentrated in one sector.
Have you thought about what you want your asset allocation to be? (% stocks / % bonds)
The beauty of an asset allocation is to hold assets that are uncorrelated. As a result you have the option to rebalance to your specified asset allocation when one asset appreciates more than another. Then the rebalance means that you sell appreciated assets and buy lower priced assets relative to the last rebalance. This is advantageous psychologically, because when the market changes (up or down) there is only one thing to do, rebalance. So no stress about timing, security choices, etc. The one decision you have to make, and stick with, is the asset allocation. Good luck!
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--At what age does spending less now in order to have more later stop making sense?
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08-06-2021, 01:12 PM
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#12
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Thinks s/he gets paid by the post
Join Date: May 2014
Posts: 1,390
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Without knowing your age and/or investment time horizon it is hard to have an opinion. Just know if a bear market hits, your investments could take a big, big hit.
Remember, stocks do go down as well as up .
__________________
Understanding both the power of compound interest and the difficulty of getting it is the heart and soul of understanding a lot of things. Charlie Munger
The first rule of compounding: Never interupt it unnecessarily. Charlie Munger
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08-06-2021, 03:32 PM
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#13
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Thinks s/he gets paid by the post
Join Date: Oct 2017
Location: Tellico Village
Posts: 2,595
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Quote:
Originally Posted by sairamss
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Picking funds based on past returns is not a good method and will likely lead to reduced returns compared to the overall market. JLCollins book is specific and recommends VTSAX at Vanguard for the equity portion of your investments. Very diversified and not betting on past returns or sectors.
Good luck to you,
VW
__________________
Retired May 13th(Friday) 2016 at age 61.
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