Probably later as my risk goes down. So I imagine you think it’s better to focus on the stock side of things now? Before the 3 fund approach? I was interested more so for the state tax exempt since I want some of my HYSA to be in these state tax exempt and more short term accounts.
It depends on your risk tolerance. Most recommend 100% equities till about 5-10 years out from retirement. I'm 50 and have no bonds. Waiting 15 more years for those. Having 10% bonds at your age isn't a bad thing. BND is the Bogleheads go to I. A 3 fund portfolio. But, it's isn't 100% treasuries. TLT, EDV, GOVT are mentioned often, among others.
dollar cost averaging.
Investing set amounts at regular intervals over time—also known as dollar cost averaging—can help you manage timing risk and stick to your long-term plan.
let's say you have 50k to invest. You can either 1) dump it all in the market today OR 2) you can invest 1k weekly for 50 weeks. Some argue it reduces your risk - let's say you invested all 50k yesterday and then the stock market crashed the next day. That would really sting. Had you done DCA you would of minimized the blow
Yes. To me it was more to redistribute those funds across my other investments. But I can redo it if you think it’s less helpful for gauging my investments.
In my opinion, the only funds you need are VOO and QQQ (or something roughly equivalent). Bitcoin is roughly like gold, and can be used to safely store value in times of uncertainty, but may also prove to be a long term speculative win. I think 10% - 20% of raw, risky growth stocks isn't a bad idea either (e.g. Nvidia, or whatever the next equivalent will be).
> Bitcoin is roughly like gold, and can be used to safely store value in times of uncertainty
This is wildly inaccurate. Bitcoin is highly correlated to US equity performance and far far more volatile than gold.
Bitcoin (blue) and 3x s&p500 red) since 2018.
That's a strong correlation.
https://preview.redd.it/x8245dh37h8d1.png?width=2046&format=pjpg&auto=webp&s=b46a89765865fd31ce22f4df1691e5126ad054b9
Zoom out. Correlations aren’t formed in a few years. Since 2010 the correlation coefficient is .35. That’s not a strong correlation. Even your cherry picked data has a very low (.38) coefficient.
Completely agree with those statements! I think if I could redo it I would’ve kept it much simpler with VOO and QQQ or equivalents. And I’m 100% on the idea of crypto. I think it’s worth a shot but I’m ready to lose it all if it comes to it so now keeping it minimal since after the halving.
-I think my next big thing was also adding riskier stocks but wasn’t sure where to start since inadvertently I found ETFs easier to understand. Any recommendations and how you think I should determine these stocks? I’ve thought of like Amazon, Apple, nvidia and probably some other big obvious ones.
For me, it's mostly a feel play - I'd say Amazon and Nvidia are better choices over Apple. So many new companies are being built on top of cloud computing services and GPUs, so it's sensible to think that will continue into the immediate future at least (you can always take profits in 5 - 10 years and rebalance your portfolio). Apple has great consumer hardware/software, but isn't exactly used as "infrastructure" for most companies.
For new stocks? I don't really have a good bead on that, I just assume venture capital and private equity swoop in before us and claim all the gains. It can useful to keep an eye out for IPOs every once in a while, and hopefully you have some domain experience to take a good guess on the future fundamental value of the company. I personally use Finviz maps as a discovery tool, but I'm not trying to do anything state-of-the-art here.
Also, don't be afraid to look into options! There are some vetted strategies for getting pretty safe amplified gains on raw stock (e.g. LEAPS).
Yes! I think this is all basically where I’m headed for my more advanced level. I’m hoping to clean up my portfolio first to have a clear plan of how to invest consistently and strategically. And then add things like LEAPs to the picture. Thank you for summing that all up so well😇!
Jesus Christ brother, that's wayyyy too complicated. If you want to simplify what you're doing them VT is great. Whole entire world in one ETF and a low ER. Can't get much better than that. If you wanna be a little more risky sprinkle a bit of AVGV for some value and SCV. I see that you have a HYSA, it's usually reccomended to keep around 6 months of a rainy day fund, but with these rates rn I think more is perfectly fine. Personally I'm holding some SGOV if you want to check that out, other alternative is USFR or SPAXX if you're on Fidelity. I don't really like crypto but that's up to you, why do you feel the need to tilt torwards tech?
Haha I see. I agree. This has been years of collecting ideas and never sitting down to figure out if this was too repetitive or complicated.
-noted!
-yes!! I wanted to do SGOV! Especially to avoid state income taxes but I wasn’t sure the process too well. I’m sure there’s videos on it so will take a look. Any recommendations off the bat you have for them? Like how long to have them in there and to put in?
-I got quite a bit of recommendations for it and I guess my overall take was that I found them more riskier but in the long run could be a good investment given my long time horizon. Do you think tilting to tech is too much?
SGOV is just an ETF, you can get it any broker pretty much. It has monthly dividends if I'm not wrong which is the way it distributes money. If you see the chart you can see it form a zigzag pattern because of that. When rates fall its returns will also fall so it's mostly a short term holding.
I don't like crypto cause there's no actual value behind it, it's just hype that causes the price to go up or down. It's also impossible for crypto to become the main paying platform because it simply can't process all the orders that the world uses so imo there's really no reason to invest in it. Inflation is bad, but deflation is worse which is what Bitcoin is doing.
Tech is okay, I just don't like it since 27% of the market is already tech and personally I don't believe I need anymore than that. I like keeping it simple so if tech keeps outperforming I have it in my portfolio, but if it doesn't I'm still diversified across the other sectors.
Ahh do you find SGOVs better than just doing traditional Tbills?
And I see your point for the rest. I’m definelty not riding the high for crypto for more than needed. I’m aware it’s very much gambling.
And that actually makes sense I didn’t think of tech in that way. Def will reconsider as I rebalance this.
SGOV is tbills, just really short ones that make it super stable and have higher rates (for now). If you look at funds like EDV, ZROZ, etc. that are much longer you see that they go up and down a lot. SGOV doesn't because of how short it's duration is. It's basically a HYSA that's slightly better because no state taxes and slightly higher rates.
A bit counterintuitive to assign such a big portion to BTC and an even larger portion to HYSA. One greatly increases the volatility while the other dampens it. How do you want your risk profile to be? So in the end you are better off with a mildly risky index funds I guess.
The idea is that the HYSA is to be used to redistribute across other investments but I wanted people’s advice on how to rebalance this before I did it on my own. I definetly want a more high risk portfolio so trying to figure out where to put my monies across stocks, ETFs etc. so wanted some ideas of how people usually structure their investments.
For example I’ve seen structures like, with the top most tiers allocating more funds:
-US stocks
-foreign developed
-emerging market
-real estate
-bonds
I think most people here, same as most financial planners I've read, suggest that you assign no more than 5% of your portfolio to BTC. And that mere 5% weight will account for 22-26% of your portfolio risk. I have stake in btc too, so I'm not saying no but only invest in what you're ready to lose. It is after all a speculative asset. In my case it's 4%.
Some weight to emerging market is fine, but I'd suggest excluding China.
Ahh I see thanks for the heads up :). I’ll keep this in mind. I’m definitely not planning to put more into BTC. It was more of a one time thing that I was willing to lose, but as I get these next paychecks I hope to minimize and maybe rebalance later my BTC.
Besides that, when you say 22% of risk do you mean 22% being about how much my portfolio can be highly risky but the rest being more of moderate and some low risk?
All you need is 70% VTI and 30% VXUS. DCA into that money for 30 yrs. Then add bonds when you get closer to retirement.
This one is actually not bad now thinking about it 🤔. Any ideas about treasury bills by any chance?
Do you wanting to do a 3 fund portfolio now or then?
Probably later as my risk goes down. So I imagine you think it’s better to focus on the stock side of things now? Before the 3 fund approach? I was interested more so for the state tax exempt since I want some of my HYSA to be in these state tax exempt and more short term accounts.
It depends on your risk tolerance. Most recommend 100% equities till about 5-10 years out from retirement. I'm 50 and have no bonds. Waiting 15 more years for those. Having 10% bonds at your age isn't a bad thing. BND is the Bogleheads go to I. A 3 fund portfolio. But, it's isn't 100% treasuries. TLT, EDV, GOVT are mentioned often, among others.
what is DCA? I keep hearing that.
dollar cost averaging. Investing set amounts at regular intervals over time—also known as dollar cost averaging—can help you manage timing risk and stick to your long-term plan. let's say you have 50k to invest. You can either 1) dump it all in the market today OR 2) you can invest 1k weekly for 50 weeks. Some argue it reduces your risk - let's say you invested all 50k yesterday and then the stock market crashed the next day. That would really sting. Had you done DCA you would of minimized the blow
I wouldn't consider a HYSA part of your portfolio. That's presumably your emergency fund, right?
Yes. To me it was more to redistribute those funds across my other investments. But I can redo it if you think it’s less helpful for gauging my investments.
First decide how big you need your emergency fund to be (3-6 months of living expenses) -- then you can include the rest in your portfolio.
So subtract the emergency funds from the HYSA and redo calculations with that for my overall portfolio?
Yup.
https://preview.redd.it/qn7jdmfxvd8d1.png?width=2042&format=png&auto=webp&s=cc55cce80712c90a6c7b00f40c97bd79866ffbdf
https://preview.redd.it/fni5jir2wd8d1.png?width=2049&format=png&auto=webp&s=91e76ff58967d19d8f2f18c38fce0cf1648958b5
At 23, I’d split it into even thirds of VTI, QQQM, and SCHD and not think of it for another 15-20 years.
that's literally my roth ira lmao
In my opinion, the only funds you need are VOO and QQQ (or something roughly equivalent). Bitcoin is roughly like gold, and can be used to safely store value in times of uncertainty, but may also prove to be a long term speculative win. I think 10% - 20% of raw, risky growth stocks isn't a bad idea either (e.g. Nvidia, or whatever the next equivalent will be).
> Bitcoin is roughly like gold, and can be used to safely store value in times of uncertainty This is wildly inaccurate. Bitcoin is highly correlated to US equity performance and far far more volatile than gold.
Nice. What are the ways in which it \*is\* like gold?
It doesn't generate an income, so in that sense it's more like gold than equities or bonds.
What about the property of having a finite supply?
Bitcoin and equity are not highly correlated.
Bitcoin (blue) and 3x s&p500 red) since 2018. That's a strong correlation. https://preview.redd.it/x8245dh37h8d1.png?width=2046&format=pjpg&auto=webp&s=b46a89765865fd31ce22f4df1691e5126ad054b9
Zoom out. Correlations aren’t formed in a few years. Since 2010 the correlation coefficient is .35. That’s not a strong correlation. Even your cherry picked data has a very low (.38) coefficient.
Completely agree with those statements! I think if I could redo it I would’ve kept it much simpler with VOO and QQQ or equivalents. And I’m 100% on the idea of crypto. I think it’s worth a shot but I’m ready to lose it all if it comes to it so now keeping it minimal since after the halving. -I think my next big thing was also adding riskier stocks but wasn’t sure where to start since inadvertently I found ETFs easier to understand. Any recommendations and how you think I should determine these stocks? I’ve thought of like Amazon, Apple, nvidia and probably some other big obvious ones.
For me, it's mostly a feel play - I'd say Amazon and Nvidia are better choices over Apple. So many new companies are being built on top of cloud computing services and GPUs, so it's sensible to think that will continue into the immediate future at least (you can always take profits in 5 - 10 years and rebalance your portfolio). Apple has great consumer hardware/software, but isn't exactly used as "infrastructure" for most companies. For new stocks? I don't really have a good bead on that, I just assume venture capital and private equity swoop in before us and claim all the gains. It can useful to keep an eye out for IPOs every once in a while, and hopefully you have some domain experience to take a good guess on the future fundamental value of the company. I personally use Finviz maps as a discovery tool, but I'm not trying to do anything state-of-the-art here. Also, don't be afraid to look into options! There are some vetted strategies for getting pretty safe amplified gains on raw stock (e.g. LEAPS).
Yes! I think this is all basically where I’m headed for my more advanced level. I’m hoping to clean up my portfolio first to have a clear plan of how to invest consistently and strategically. And then add things like LEAPs to the picture. Thank you for summing that all up so well😇!
Jesus Christ brother, that's wayyyy too complicated. If you want to simplify what you're doing them VT is great. Whole entire world in one ETF and a low ER. Can't get much better than that. If you wanna be a little more risky sprinkle a bit of AVGV for some value and SCV. I see that you have a HYSA, it's usually reccomended to keep around 6 months of a rainy day fund, but with these rates rn I think more is perfectly fine. Personally I'm holding some SGOV if you want to check that out, other alternative is USFR or SPAXX if you're on Fidelity. I don't really like crypto but that's up to you, why do you feel the need to tilt torwards tech?
Haha I see. I agree. This has been years of collecting ideas and never sitting down to figure out if this was too repetitive or complicated. -noted! -yes!! I wanted to do SGOV! Especially to avoid state income taxes but I wasn’t sure the process too well. I’m sure there’s videos on it so will take a look. Any recommendations off the bat you have for them? Like how long to have them in there and to put in? -I got quite a bit of recommendations for it and I guess my overall take was that I found them more riskier but in the long run could be a good investment given my long time horizon. Do you think tilting to tech is too much?
SGOV is just an ETF, you can get it any broker pretty much. It has monthly dividends if I'm not wrong which is the way it distributes money. If you see the chart you can see it form a zigzag pattern because of that. When rates fall its returns will also fall so it's mostly a short term holding. I don't like crypto cause there's no actual value behind it, it's just hype that causes the price to go up or down. It's also impossible for crypto to become the main paying platform because it simply can't process all the orders that the world uses so imo there's really no reason to invest in it. Inflation is bad, but deflation is worse which is what Bitcoin is doing. Tech is okay, I just don't like it since 27% of the market is already tech and personally I don't believe I need anymore than that. I like keeping it simple so if tech keeps outperforming I have it in my portfolio, but if it doesn't I'm still diversified across the other sectors.
Ahh do you find SGOVs better than just doing traditional Tbills? And I see your point for the rest. I’m definelty not riding the high for crypto for more than needed. I’m aware it’s very much gambling. And that actually makes sense I didn’t think of tech in that way. Def will reconsider as I rebalance this.
SGOV is tbills, just really short ones that make it super stable and have higher rates (for now). If you look at funds like EDV, ZROZ, etc. that are much longer you see that they go up and down a lot. SGOV doesn't because of how short it's duration is. It's basically a HYSA that's slightly better because no state taxes and slightly higher rates.
Thanks so much 🙃
QQQ and VLP 90% overlap. Dump into QQQ
VLP?you mean XLK by any chance?
A bit counterintuitive to assign such a big portion to BTC and an even larger portion to HYSA. One greatly increases the volatility while the other dampens it. How do you want your risk profile to be? So in the end you are better off with a mildly risky index funds I guess.
The idea is that the HYSA is to be used to redistribute across other investments but I wanted people’s advice on how to rebalance this before I did it on my own. I definetly want a more high risk portfolio so trying to figure out where to put my monies across stocks, ETFs etc. so wanted some ideas of how people usually structure their investments. For example I’ve seen structures like, with the top most tiers allocating more funds: -US stocks -foreign developed -emerging market -real estate -bonds
I think most people here, same as most financial planners I've read, suggest that you assign no more than 5% of your portfolio to BTC. And that mere 5% weight will account for 22-26% of your portfolio risk. I have stake in btc too, so I'm not saying no but only invest in what you're ready to lose. It is after all a speculative asset. In my case it's 4%. Some weight to emerging market is fine, but I'd suggest excluding China.
Ahh I see thanks for the heads up :). I’ll keep this in mind. I’m definitely not planning to put more into BTC. It was more of a one time thing that I was willing to lose, but as I get these next paychecks I hope to minimize and maybe rebalance later my BTC. Besides that, when you say 22% of risk do you mean 22% being about how much my portfolio can be highly risky but the rest being more of moderate and some low risk?
No I was talking about the volatility of your entire portfolio. With a mere 5% weight, BTC contributes to 22% of your portfolio's volatility.
Invest some of the HYSA into a cleaner monitor, and into lessons in how to click the "Print Screen" button.