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?
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?