25% US Large Cap
25% US Mid
25% US Small Cap
25% International
No bonds. Will reconsider at age 40.
Tax strategy - Traditional is more focused in Large and Mid. Small and Intl (higher expected returns) go in Roth.
this post was submitted on 30 Aug 2023
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You should go look at the top 10 holdings of your equity funds you’re in. I bet for two of them it’s identical.
This is correct. S&P 500 and whole market funds are nearly identical. I'd choose the lower cost fund, and throw in a small allocation to small cap value, but that's just me.
Gonna set a fire in here:
62% UPRO 3x S&P500
11% UMDD 3x S&P400 MidCap
27% East Coast Strategic Credit fund (Credit Spread strip strategy)
Quarterly rebalancing with a 70% equity / 30% alternative "neutral" balance target.
Investment horizon ~50+ years
You are young, however this is a very aggressive portfolio. You're 3% bonds, 6% international stocks, and 90% domestic stocks.
I'm not saying it's bad to be aggressive, as I'm actually 100% in stocks, but be aware of the worst case scenario.
I think your math is assuming FFLDX is 100% domestic stock, but according to the Fidelity research page it's ~55% domestic stock, ~35% foreign stock, ~10% bonds so it actually very closely mirrors my Roth distribution (totally accidentally however... I actually hadn't looked at it before today, I just knew the returns were only about half of the S&P500 over any given period of time).
100% TDF, set it and forget it
I'm pushing 60, so I've collected accounts at Vanguard, Fidelity, Schwab and a couple credit unions. I've got too many individual funds and ETFs to list, but my allocation is:
45% domestic stocks 25% international stocks 25% US bonds 5% short term/cash
My stocks are nearly all index with a slight small-value tilt.
More or less:
- 70-75% US total market
- 25-30% international total market
My only bonds are in my efund, which makes my portfolio quite aggressive.
So mine looks pretty similar to yours, but I have a little more international and no bonds. I'm guessing our portfolios perform similarly.
Edit: tax strategy
My after tax accounts are in international funds for the foreign tax credit, my Roth accounts are in US stocks (highest expected growth), and my pre-tax accounts fill in the gaps.
I don't make enough to max 401k + Roth but if I ever get there I'll have to remember the foreign vs. domestic note. From reading this thread I think I definitely need to phase out contributing to bonds for a while.
Bonds should reflect your risk tolerance and time horizon to retirement. The closer you are to retirement or the more nervous you'd get if the market has a significant downturn (say, >30% losses in a single year), the more bonds you should have.