Will You Share What Funds You're In?

[SoReadyToRetire]

I've discovered over the past year, since retiring, that managing money is a LOT of work. It shouldn't be this stressful.

I want to just get into 4 or 5 or 6 (or some reasonable, manageable number of) ETFs and/or mutual funds and then sit back and put our accounts on autopilot (with the normal occasional rebalancing, of course), so I can relax.

The endless research trying to decide on the "perfect" mix is making me nuts. Every time I think I've chosen a few funds that would be a good balance, the sectors I've decided on seem to tank.

I've gotten suggestions from my broker (Fido), but they always want me to put what I feel is too much into international stocks and into bonds. I know we need SOME of those, but not the percentages brokers seem to like.

I just want our money to grow at a reasonable, consistent rate over the next several years, so I can be sure we'll be okay.

Would any of you who have done what I'm saying be willing to share a list of exactly which ETFs/funds you're in, and the percentage of your total that's in each?

Although I'd appreciate hearing from anyone, I'd especially be interested in folks like us, with a ~$1M portfolio, who started this strategy in the past few years, and for whom it seems to be working well. The previous decade of crazy gains was waaaay too much of a best-case scenario, so I'm less comfortable with data from those years.

Thanks--appreciate your input.

 

[W2R]

Here are the funds I have, with rough percentages of each. I am a 72 year old woman and a very conservative investor; I'm certainly not saying these are right for everyone! But I am satisfied with them, for me.

VBTLX 21% Vanguard Total Bond Market Index Fund Admiral Shares
VWIAX 30% Vanguard Wellesley Income Fund Admiral Shares
VTSAX 20% Vanguard Total Stock Market Index Fund Admiral Shares
VFWAX 9% Vanguard FTSE All-World Ex-US Index Fund Admiral Shares
TSP "G Fund" 7% (bond fund for federal employees/retirees)

I also have cash in Vanguard money market funds and elsewhere which makes it add up to 100%. Right after I rebalance, the cash plus the two bond funds plus the bond portion of Wellesley roughly add up to 58%, and the equity funds plus the equity portion of Wellesley roughly add up to 42%. So, my AA is 42:58.

I re-balance the first week in January and take my spending money for the year at that time. Other than that I leave it alone other than checking the balance to see how it is doing.

If/when you have some idea of what you want to do, I'd recommend running it by the people over at the Bogleheads forum. Might be helpful.

 

[Markola]

OP, You might be a good candidate for the simple, powerful Three Fund Portfolio. Taylor Larimore wrote a brief book about it, too. https://www.morningstar.com/articles/871546/the-3-fund-portfolio

 

[disneysteve]

OP, You might be a good candidate for the simple, powerful Three Fund Portfolio. Taylor Larimore wrote a brief book about it, too. https://www.morningstar.com/articles/871546/the-3-fund-portfolio

This. You need 3 funds.

That is not what we have because our portfolio has been cobbled together over the past 30 years but if I was starting from scratch, this is what I would do.

 

[W2R]

OP, You might be a good candidate for the simple, powerful Three Fund Portfolio. Taylor Larimore wrote a brief book about it, too. https://www.morningstar.com/articles/871546/the-3-fund-portfolio

This. You need 3 funds.

That is not what we have because our portfolio has been cobbled together over the past 30 years but if I was starting from scratch, this is what I would do.

I think that's great advice, too. Go for the 3 fund portfolio!

 

[Major Tom]

The 3 fund portfolio is exactly what I am doing. I have -

62% VTSAX
5% VTIAX
30% VBTLX
3% CASH

I used to have more VTIAX, but am slowly selling it off. In a few years, I'll just have VTSAX and VBTLX. Simple is good! I also used to have a few different individual equities, such as Google/Alphabet, but the amounts were small. I've been doing the simple 3-fund thing for around 10 years or so now. It has been working well so far. I have a useful ability to ignore my investments when the market is down, which I think will help keep me invested like this. I spend about 20 minutes a year on portfolio maintenance/rebalancing. Maybe 30 minutes. Not really sure. It's not much.

PS - you wanted to hear from people who have ~$1M. I have a little more than that, but not much more. I'm in the ballpark.

 

[Out-to-Lunch]

Another vote for the 3-fund portfolio for you. Here is a brief guide: https://www.bogleheads.org/wiki/Three-fund_portfolio

 

[SoReadyToRetire]

Thanks!

Thank you all for your helpful responses.

I’m thrilled that multiple people suggested the three-fund portfolio—it sounds like exactly what I was looking for! Finally, maybe the end of my long search for smart-and-easy is near .

Thanks for the links as well.

 

[livingalmostlarge]

You could also do the vanguard ETFs like VTI, BND, and VXUS instead of MF

 

[donheff]

I'm another fan of three funds. Like some others our portfolio is cobbled together from various IRAs, 401Ks, taxable brokerage, and TSP so we have more funds but they add up to variations on the three fund approach (total stock, total bond, total international). We manage the bunch of them as one portfolio.

 

[Exchme]

I too have a whole mess of funds with small, small growth small value, emerging markets, etc. But over time they are not beating the 3 fund portfolio by enough to compensate for the extra volatility and rebalancing headaches, so I am slowly working my way 3 funds too.

The 3 fund portfolio is a great choice for your Roth or tax deferred accounts, but you may have a lot of capital gains taxes if you try to change your taxable accounts, so you will have to consider what to do there (maybe move some money each year) so you don't get slammed with excess taxes.

 

[VanWinkle]

I have 7 figures invested in 3 funds:

VTSAX 53%
VBILX 18%
VBTLX 18%
personal mortgages 11%

I'm not an expert, but I listen well!!

VW

 

[RetireAge50]

25% VTSAX Stock Index
25% VEIRX Stock Value
25% GAT Stock Growth
25% CD’s and SVF

 

[disneysteve]

The 3 fund portfolio is a great choice for your Roth or tax deferred accounts, but you may have a lot of capital gains taxes if you try to change your taxable accounts, so you will have to consider what to do there (maybe move some money each year) so you don't get slammed with excess taxes.

This is my problem. We have a lot in taxable accounts where switching funds has significant consequences.

 

[freedomatlast]

VTSAX and Fidelity Growth Company Commingled Pool are two of my larger holdings. The Fidelity fund has done outstanding over the long term (and short term too) and made it easier for me to take the plunge to ER.

 

[Midpack]

We have 11 holdings for a value and small tilts, but that's unnecessary - I'll be simplifying, but it will take many years to avoid outsized cap gains hits. Here's another good resource of "lazy portfolios" with 3 or more funds. You probably can't go wrong with any of them.

https://www.bogleheads.org/wiki/Lazy_portfolios

 

[jollystomper]

The endless research trying to decide on the "perfect" mix is making me nuts. Every time I think I've chosen a few funds that would be a good balance, the sectors I've decided on seem to tank.

Perhaps you are making "perfect" the enemy of "good"?

 

[disneysteve]

Every time I think I've chosen a few funds that would be a good balance, the sectors I've decided on seem to tank.

Stop looking at sectors. At any given time, some will be doing well and others will be doing poorly. As many of us have said, take a broad, total market approach. It's easy. It's cheap. And it's virtually maintenance-free.

 

[jazz4cash]

Stop looking at sectors. At any given time, some will be doing well and others will be doing poorly. As many of us have said, take a broad, total market approach. It's easy. It's cheap. And it's virtually maintenance-free.

+1. Promoting sector investing seems to be a popular way for brokers to stimulate trading activity.

 

[DangerDad]

Consider something even simpler than the 3 fund portfolio:
A single Vanguard LifeStrategy all-in-one fund is the ultimate in simplicity.
They have four of these with various asset allocations ranging from 80/20 to 20/80.
Another all-in-one option is the Vanguard Target Retirement funds.
There are pros and cons of the all-in-one versus 3 fund portfolio.
Good luck,
DD

 

[stephenson]

We started investing in funds a few decades ago - both taxable and non taxable accounts. We corrected the expensive, actively traded fund choices in the non taxable accounts as we got smarter, but have so much in the taxable accounts the tax burden would be pretty painful, so just let them ride … waaaaay too many, and a lot of duplication in holdings (the mistakes of relative childhood) - our process was to review funds doing well over 3-5 years and then pick the best rated by whatever magazines we had - made mistakes, but kept saved money going into them, so I guess that was good.

I chuckle - sadly - about how haphazardly all this was done as we worked, raised kids, etc … but, still a bit of chuckle ...

Taxable
EGINX
FAMVX
GABGX
GABGX
HACAX
JACTX
JAENX
JAGIX
JAMRX
JORNX
KAUFX
NGSSX
NICSX
NMANX
OAKIX
OAKMX
PRSCX
SFAAX
STAFX
TWCUX
TWIEX
WFDAXks
ETFS and stocks

Non Taxable
FIENX
FSKAX
VTIAX
VTSAX
ETFS and stocks

 

[Lsbcal]

I've discovered over the past year, since retiring, that managing money is a LOT of work. It shouldn't be this stressful.

I want to just get into 4 or 5 or 6 (or some reasonable, manageable number of) ETFs and/or mutual funds and then sit back and put our accounts on autopilot (with the normal occasional rebalancing, of course), so I can relax.

The endless research trying to decide on the "perfect" mix is making me nuts. Every time I think I've chosen a few funds that would be a good balance, the sectors I've decided on seem to tank.

I've gotten suggestions from my broker (Fido), but they always want me to put what I feel is too much into international stocks and into bonds. I know we need SOME of those, but not the percentages brokers seem to like.

I just want our money to grow at a reasonable, consistent rate over the next several years, so I can be sure we'll be okay.

Would any of you who have done what I'm saying be willing to share a list of exactly which ETFs/funds you're in, and the percentage of your total that's in each?

Although I'd appreciate hearing from anyone, I'd especially be interested in folks like us, with a ~$1M portfolio, who started this strategy in the past few years, and for whom it seems to be working well. The previous decade of crazy gains was waaaay too much of a best-case scenario, so I'm less comfortable with data from those years.

Thanks--appreciate your input.

Personally I would consider a cash or short term bond fund for the FI. Then go with a simple portfolio like others have suggested in this thread. Maybe in a few years as rates adjust upwards move the FI to an intermediate term bond fund. You could do this by averaging into the bond fund.

I think international funds are OK and have a place in portfolios. My guess is that they will shine more as vaccines roll out to those parts of the world. I would stay out of emerging markets funds (see Rekanthaler recent article on the Morningstar site).

 

[frank2009]

Roughly, my portfolio allocation is:

80% Vanguard Total World (VT) and its mutual fund equivalent

3% ARKK, ARK innovation. This is as John Bogle called it, my "funny money"
account.

17% in a one year CD

 

[gayl]

I was an active trader (300+ per year plus options) and this set it and primarily forget it mix does ALMOST as well:
SCHB: 86.78%
PWZ: 4.49%
5 individual stocks: 3.04%
$cash: 5.69%

 

[rkser]

Taxable -

Cash - 5% - Banks
VTSAX -42% - Vanguard Total Stock Market Index
VTABX - 19% - Vanguard International Stock Index
VWIUX - 13% - Intermediate Tax Exempt Bonds


Tax Deferred -

VBTLX - 14% - Vanguard Total Bond Index
VTABX - 7% - Vanguard International Bond Index

- Initially I was in more number of funds, but gradually came down to 5 self managed Vanguard Funds, a 7 figure Portfolio, Asset Allocation of 60/40 & overall expense ratio of 0.07%