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Three-fund portfolio, as explained in this fantastic book.

Also 23. Generally looks good. You're heavier on small cap stock than would be recommended for our age group. You are also really low on bonds in general. There have been some studies that the gains from having less than 20% bonds are minimal compared to the losses you get from having less bond holdings. I'm personally 80/20.

I'd recommend reading the last chapters of The Four Pillars of Investing and Random Walk Down Wall Street - they have example portfolios I found helpful in crafting mine.

Morningstar even had something on some of these alternative ETFs recently: http://www.morningstar.com/cover/videocenter.aspx?id=791365

Now, I'm not saying you should use morningstar to drive your investing decisions, but when 92% of the etfs in that category fail to be properly uncorrelated and meet their benchmark returns, the category might just be a crappy one.

If you want to change your investing outside of the basic 4 fund you can do so without going into the Alternatives category. You can tilt(by value, size or geography) in equities or invest in more specialized categories of bonds (long term treasuries, emerging market bonds, floating rate bonds).

I'm not advocating you choose any of those, but i think you'll find they are likely more proven tools for tweaking your portfolio than the murky world of alternatives.

Nice job starting at while you're young -- it will pay off!

Reddit is really big on Roth over Traditional IRA. If you can comfortably max out a Roth that's probably a good move, but if you don't think you can max it out you might prefer a traditional IRA (you'll get a much bigger tax refund, which I found nice when my income was lower).

Another comment recommended a three fund portfolio... At your age I would avoid bonds entirely though. The return has been terrible for at least a decade now, and you don't need to worry if the market tanks (if it does, invest more!) So I would opt for the two fund portfolio (US + International) or even one fund portfolio (whole market).

Alternatively you could do a target date fund which re-balances your portfolio over time, shifting from risky investments to safer ones (mostly stocks to bonds). Schwab has their set of own target date funds:

https://www.schwab.com/mutual-funds/mutual-fund-portfolio/target-funds

The one fund, two fund, and target date fund portfolios are all good choices. Some people may tell you that one is better than another, but no one really knows which will outperform in over 40 years. Just pick one and don't fret the dips.

Your allocation so far is complicated (random?), expensive, and (arguably) conservative for your age.

Your 401(k) options are garbage, which is unfortunate. The Spartan 500 index fund is the only passive-managed fund you have. PIMCO Total Return is the best of your bond funds at 0.46%, but that's still not great compared with what you can get in an IRA. If possible, petition HR for better, lower-cost index fund options in your 401(k).

I would take the minimum free money (employer matching), stick it in the Spartan 500 index, and put anything extra you can save towards an IRA (either kind) (at Vanguard, for example). And then build your portfolio mostly out of the IRA, if possible.

And either way, read http://www.bogleheads.org/wiki/Bogleheads%C2%AE_investing_start-up_kit . Edit: Also this: https://www.reddit.com/r/personalfinance/wiki/401k_funds

mREITs are extremely, extremely sensitive to interest rates. They will not be able to continue paying these dividends if interest rates rise. That's not to say you can't have any exposure to them, but they make up a ridiculously high amount of your portfolio. You are taking on far more risk than you realize. Also, your 2x leveraged ETFs are not designed to be held long term. Go read http://seekingalpha.com/article/1864191-what-you-need-to-know-about-the-decay-of-leveraged-etfs if you don't understand why leveraged ETFs are bad.

Is your target date fund also known as "American Funds Target 2055" fund?
http://www.morningstar.com/funds/xnas/rdjtx/quote.html

If so, it's expense ratio of 0.76% is a bit high. It might be better to look at the "expense ratios" offered in your plan, and invest 100% in the mutual fund with the lowest expense ratio. Most often, that will be a passive index fund, which are cheap to operate.

The people who lump everything in target date funds also tend to be people who don't want to think too much about the fund. So that probably explains why so many target date funds outside Vanguard have high fees (Vanguard charges 0.15% expense ratios on it's target date funds).

You should ideally allocate some international, but without knowing your fund's choices, that might have to be in an IRA (where you can pick a lower expense ratio fund).

I think you need re-train yourself, and maybe your spouse if they helped pick stocks. Your approach to investing involves picking individual companies, which was more common decades ago when mutual funds were rare. Without replacing those ideas with something else, I think you'll just keep picking stocks. Essentially, I don't know where to start with your portfolio since I usually try to help someone in the direction they're already going. I can't find the direction of your portfolio.

I think I'd recommend "The Only Guide You'll Ever Need for the Right Financial Plan" (Larry Swedroe) for you. Larry Swedroe discusses the risk of investing in individual companies in a way that might help you adjust your thinking. My criteria for investment books is that they provide decades of stock market data to back their claims, and compare against a benchmark. That way, you're not just reading someone's recent theory.

There's essentially too much work here to cover on reddit or in a single reply. It would help a lot if the person (or people) who pick stocks read investment books like "A Random Walk Down Wall Street" or the Larry Swedroe book I mentioned above (probably available at a local library).

A 5 year history offers very little value in predicting future volatility.

Yes, S&P 500 outperformed total market during the period. That does not mean that trend will continue long term . Similarly, investing after the 22% yearly return from IBB is akin to betting on Internet based companies in the late 90s. Sure, you might get a couple years of similar growth, but do you really want to be holding the pieces if it is a bubble that bursts? If you haven't read A Random Walk Down Wall Street, now might be a good time to.

edit:

Here i've added a 3rd portfolio with only 3 of your funds that has both higher returns and lower std deviation: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2016&lastMonth=12&endDate=10%2F15%2F2016&initialAmount=50000&annualOperation=0&annualAdjustment=0&i...

Do you actually think that portfolio is either more likely to have better long term returns than either of your versions or less risky? It just happens to be using data-points that are anomalies as normal. That skews the entire data and paints a very unrealistic picture of the situation.

The Bogleheads Guide to Investing is a good book to read - active funds will underperform passive ones on average over time, high turnover means higher tax costs means lower returns, and past results do not predict future returns. If it were as easy as picking last year's winners everyone would do it ;)

http://www.forbes.com/sites/rickferri/2014/03/24/3-to-1-odds-favor-index-investors/

1. Returns reported by most institutions and websites are after expenses, and include dividend reinvestments.

2. I would also like to hear more quantitative explanation from others about this topic. But the facts are

• Expenses are guaranteed, while returns are not guaranteed.
• Actively managed funds underperform the market in general. (In 2014, 86% of large-cap fund managers underperformed SPX - source).
• Retail investors are not equipped to know which one will outperform the market and when.

My International/EM exposure is in my Schwab 2055 Indext TDF (SWYJX).

• International = 25.28%
• Em = 7.11%

Kudos for trying to not investing in something you don't understand.

It's definitely possible to diversify even when you're just starting out. This one well-written series of guides really set the tone for my whole investment philosophy: http://seekingalpha.com/article/15134-the-seeking-alpha-etf-investing-guide

Some of the details and tax advice will be different if you're in Belgium, and you can skip some of the articles.

Also, read up on stock dividends. Some stocks and index funds actually pay out pretty good annual returns (~3%) even if the stock price stays flat.

If you want to play around with stocks in individual companies, take the advice to set aside a small-ish amount of your overall savings. It can be a fun hobby.

Finally: second guess all investing advice, including mine!

Schwab Target 2045 ("SWMRX") shows 0.79% expense ratio:
http://www.morningstar.com/funds/XNAS/SWMRX/quote.html

Can you post the name / symbol of the Schwab target date fund with much lower expense ratio? Sounds like OP could benefit.

Purely geographic diversification - 40 years is a long time. The last 40 years won't act identical to the next 40 years. In the last 40 years picking US over the rest of the world worked out, we don't know if that will always be the case.

I'm not sure how short term high yield performed in the recession, but you can check one of the high yield funds 10 year performance here: http://www.morningstar.com/funds/XNAS/BHYIX/quote.html

Short version: Morningstar's ratings are pretty meaningless.

Long version: Morningstar's ratings are based on recent past returns. So any international index fund will have low ratings today because international as a whole has underperformed over the last 3-4 years.

Morningstar does publish some good information. In particular their fee, fund composition, historical performance graphs, etc, are all legit. But the ratings are bogus. Here's a pithy graphic: http://i40.tinypic.com/fk49as.jpg .

For comparison, Morningstar also gives VXUS (Vanguard's ex-US equity fund) 2 stars: http://www.morningstar.com/etfs/xnas/vxus/quote.html

> I do not know her marginal income tax bracket

Sorry, I was confused. As a married couple the combined income bracket is what matters.

> all her American Funds were purchased over a year ago

Great!

> our after-tax joint income this year is around $430K, next year around $300K since she'll b on maternity leave and then part-time

Because your combined income is below $464,850, it looks like you'll pay 15% on the $9000 in gains (so, $1350 in Federal taxes). At $300k, you'd still be paying 15% in LTCG, so no reason to wait there.

Source: https://www.schwab.com/public/schwab/nn/articles/Taxes-Whats-New

> we are in FL, with no income tax, but do not know if any investing-related tax

From what I've found googling around, Florida has no capital gains taxes, so you'll just pay the 15% to the fed. (E.g. http://www.fool.com/personal-finance/taxes/2014/10/04/the-states-with-the-highest-capital-gains-tax-rate.aspx )

I use Personal Capital for everything. You can link all your checking/savings accounts, any credit cards, and any investment accounts. The accounts refresh everytime you login. They have an allocation tool that puts all your investment accounts in a nice readable table. You can have all your investment accounts linked and then select all or some and see their allocation to a detail. I login to this app daily and can see everything that is going on with my money and net worth. Highly recommend.

https://www.personalcapital.com

You dont need to have them manage anything to use their service. They have the option to have them manage your investment accounts but I don't think very many people use that

Benchmarking is a tool not the only tool. If you want to build a good portfolio start with fundamentals not benchmarks. I generally don't recommend this book because it is too mathy (assumes comfort with basic algebra) but I think you might like it: https://www.amazon.com/dp/B005XM6NRY/ . You want to work top down you need to decide what your portfolio is designed to do. The reason you can't pick a portfolio is you haven't answered that question beyond "grow fast".

In terms of how best to set it and forget it I think the Robo portfolios often do a good job: Schwab's SIP (80/20) and WealthFront(also do 80/20 or more) are both very good robos. Ellevest is a great choice if you are female. If you can't control your asset allocation you are more likely to stop trying.

Sorry for your daughter's condition. But your post is vague. Is there some long term expense or just say 2-3 years of cancer expenses? This matters a lot since medical bills rise faster than inflation.

Assuming its 2-3 years you want to do a relatively normal long term growth portfolio with most of this money and a small chunk for rapid depletion. For the normal portfolio my recommended first book is: https://smile.amazon.com/Four-Pillars-Investing-Building-Portfolio-ebook/dp/B0041842TW

If on the other hand it is 10-15k from $300k inflation adjusted or more for decades then entirely different situation. That's an income portfolio. Most of the the book above will still apply but some of it won't. Income is harder but income investing theory assumes you already know growth investing.

You might want to read "A Random Walk Down Wall Street" so you understand that your chances of beating the market. Your choices involve individual funds and specific sectors, neither of which seems like a diversified approach to investing.

I don't know every fund and stock by ticker symbol, so you might want to expand on those. But it looks like you have 0% international, and picked 3 specific companies with 1/3rd of your brokerage money. I'd recommend reading up on diversification and indexing.

Can you explain why Bitcoin went up 20x in one year? Most people buy it to sell it later to someone else, and with those two ingredients (in my opinion) you have a bubble. I expect you to ignore this warning since it looks like a successful gamble so far. But when it crashes, you had the facts available to you ahead of time.

If you can find a copy of "A Random Walk Down Wall Street", I'd recommend you read it. Your portfolio needs a lot of work, and I can't see a good starting point. Until you agree that out guessing the market doesn't work, I think you'll keep trying to pick winners.

I tried to read that book as well (The Intelligent Investor) and it was to dense for me. The sidebar info is very good. Try a book by William Bernstein as he is much more approachable and modern. Plus he tells you what to avoid - individual stocks, last years hottest funds, and financial advisers.

Best of luck!

I have learned to stay away from individual stock and sector bets. When I was younger I thought I had special insights/magic touch into picking stocks, but this was basically hubris on my part. Sometimes my stocks went up (confirming my amazing stock picking abilities) and sometimes they went down (I didn't talk about these stocks at parties). I was playing a game vs investing. I think I was looking for excitement and validation.

It is hard to offer much advice on a sensible asset allocation for you as I don't know anything about you (age, plans, income, risk tolerance, etc). With that said I will give you my most general advice which is to invest in low cost index funds (ER<.1%) across several asset classes:

• domestic equities
  
• international equities
• bonds

For someone young who is saving for retirement, I would be almost exclusively in equities. For older folks I would increase bond holdings.

I just read a book "The Four Pillars of Investing" by William Bernstein that I really enjoyed and recommend it. You can buy it or find it as a free PDF on the web. Also look at the portfolio examples on the sidebar for samples.

Best of luck!

> I would be at risk of losing it all in a market downturn

If you buy US Total Stock Market and Total International, you own a slice of every large company in the world. How can all of those ~7000 companies go to $0 in value?

You might want to do some reading about the history of the stock market so you get a feel for this. You can read more in "A Random Walk Down Wall Street" or in Larry Swedroe's books. Larry Swedroe points to a previous "value premium" and favors "value" over growth stocks. But to start out it makes sense to just go with bonds, US stocks and international.

I think your questions about value/growth and worries you can lose 100% during a market downturn reflect a need to do some reading. It's not just the facts, but seeing the historical data. When the market reacts badly, and you know that has happened before and will probably be followed by recovery... you're less likely to panic. I think right now you have enough questions to turn that energy into research and reading. "The Investment Answer" is a very short view into it, but "A Random Walk Down Wall Street" provides more detail.

Keep in mind 0.90% isn't the only fee you pay - the funds selected by Morgan Stanley's salesperson also have fees. In some cases, funds give benefits back to investment companies - what I'd call a conflict of interest, but which is currently legal. The salesperson you speak to at Morgan Stanley does not owe you a fiduciary duty, so they do not have to work in your best interest (same as other companies).

Better is to explore expense ratios and invest on your own. For example, Vanguard's S&P 500 index fund costs 0.05% a year and is diversified into ~505 companies. According to SPIVA, it beats ~85% of actively managed funds. So right there you can beat ~85% of the fund choices, get diversification, and all at low cost.

In investing there's a lot more advertising by people who want to make money off you. Better is to read books like "A Random Walk Down Wall Street" which has gone through 11 editions. That book backs it's claims with decades of stock market data, not just opinions. When you work with a person at an investment firm, you will get opinions and personality.

A lower risk portfolio might be 60% bonds, 40% stocks. Going below that is a bit odd, and 85% bonds sounds very misguided. You don't expect to retire on $500k, I assume, so you need growth. More likely, you should be at 70-80% stocks.

Even better is teaching you, because all I did was plug in dates and percentages at portfoliovisualizer (.com). For example, 70% US and 30% global international (ex-US) and 1990-2010 gives a rough view of those years of growth. The problem is that those years don't repeat, so ultimately you need flexibility. You can get the market's future return by investing, you just don't know what it will be.

You can also visit "Vanguard nest egg calculator" which is the simplest retirement calculator I've seen that also has flexibility. You plug in stocks/bonds/cash percentage and figure out your withdrawal rate, and it runs 5,000 simulations. If you retire for just 20 years, 4%/year spending might work. Retire for 40 years and it's a different story, with a lower withdrawal rate being needed. That's why I point you to the simulator for that.

There's another benefit - sometimes you'll worry. If you can run numbers yourself, that might provide you added confidence that you're still on track. It's the same reason you should take a look at books like "A Random Walk Down Wall Street" - you see tons of past data reinforcing your approach. You're more likely to invest regularly even when the market tests you with drop in stock prices.

I'd also recommend some reading. When the stock market corrects, many people panic. It's hard to be someone who has never see a lot of money disappear quickly... and have any confidence when it happens. You might read "A Random Walk Down Wall Street" for how index funds fare against active funds. The conclusion won't be a surprise, but your goal is to see all the data and studies compiled in that book. When you see a correction, you're better off knowing it's probably going to be followed by a recovery. Knowledge and confidence can do wonders for staying the course. Good luck.

There are essentially 3 ways to invest:

1. You can invest in managers (trust their expertise to allow them to outperform the index)
2. You can invest in indexes
3. You can invest in individual assets

Choice 3 is a fantastic way to lose money. Choice 1 can(but doesn't always) beat the index, but charges fees to do it(your odds get a lot worse after fees). Indexes give you solid performance at low effort and cost. There is a reason a lot of people are moving from active funds to indexes.

Obigatory suggestion to read A Random Walk Down Wall Street

Well "Active Bear ETF" is something I would consider a bad investment. Are you saying it would be a good idea because it's an ETF?

What's the largest equity holding in your retirement portfolio? I'm just wondering if it matches my understanding of "A Random Walk Down Wall Street" or if you think all ETFs are better than all mutual funds.

Asking those questions suggests to me that you need to get some additional reading. One of John Bogle's book recommendations is "A Random Walk Down Wall Street", which could help you. Or if you are constrained by time, there's a ~96 page book called "The Investment Answer" that is hopefully available at your library (or Amazon).

To me the significant thing about your questions is that you think markets could be timed. Rather than be satisfied with a few answers here, I think you'd benefit more from an overview in books like I mentioned above. Note that Larry Swedroe might be another decent choice: "The Only Guide to a Winning Investment Strategy You'll Ever Need". Swedroe points out how historical performance data and academic studies in finance point towards ways to take additional risk.

The problem is you're using information that is already priced into the markets. The market prices reflect consensus expectations - the market knows healthcare is a growth sector, it knows retail investors are scared and all about woes in China.

There are a lot of phrases I could quote from famous investing figures about buying "when there is blood in the streets" or when "stocks are cheap" or "fighting the last war" but the gist is: you're in for a bad time if you're buying what is already doing well.

I would highly suggest reading The Bogleheads Guide to Investing and learning to cultivate a different attitude about sectors and fears in the market. Trying to use intuition or recent growth as your guide may be harmful to your future financial health. What does well in one cycle often does very poorly in the next.

As for bonds: you'll get different opinions from different sources, but (1) stocks may underperform for long periods (or could forever), (2) having bonds gives you something to rebalance with (sell to buy stocks) in a stock downturn, (3) efficient frontiers, etc...

> Intrinsically, I should be contributing, at minimum, 8%. Correct?

> My salary is $96,000.

Do you have an emergency fund? Debt? Are you contributing to an IRA?

You should contribute at least 8% to get your full employer match, because it's immediate risk-free 50% return on investment.

> I do not want to go the 'lazy' route, but do not feel confident I get collect and understand the necessary information in time to put together a solid portfolio.

What do you mean by this?

The 3-fund "lazy porfolio" approach is one of the best (and simplest) long term portfolios a person can hold.

> Therefore, I am asking for advice after a quick overview of my options. This will give me a concise point to focus on learning the rest of the weekend.

Go to /r/personalfinance and read both the FAQ and long-term investing start-up kit links in the sidebar. You may also want to get the book The Bogleheads Guide to Investing from your local library.

We can make a portfolio recommendation but we will need more information. Is this your only investment account or do you have an IRA/taxable investment account/etc.?

Your company's 401(k) plan has good options for large-cap domestic stocks (Spartan 500 Index, ER 0.07%), mid/small-cap domestic stocks (Spartan Extended Market Index, ER 0.07%), international stocks (Spartan International Index, ER 0.17%), and bonds (Spartan US Bond index, ER 0.17%). This is everything you'd need to construct a complete portfolio.

At your salary level, you should ultimately aim to pay off any debts (if any), and max out both your company's 401(k) and a Roth IRA each year.

I suggest reading "A Random Walk Down Wall Street", it covers the idea that no one can consistently outperform the market averages. It may give you some reassurance. I've started reading it, and to summarize it advises to invest through diversified index funds.

Okay. Thanks to you, I'm 99% balanced (only one more t/a to go). I've also ordered "A Random Walk Down Wall Street" from Amazon - can't wait to read it! I suspect that as time goes, I'll have invested more money in my 403b (I was wrong, I don't have a 401k) than I'll have invested in my IRA - but I guess a lot of people have that problem due to the yearly IRA contribution limit. So I guess if that's the case ---- I re-allocate and re-balance by moving foreign stocks out of non-taxable accounts and into taxable.... followed by domestic... I think I have this thing down!

I'd recommend you buy a book on asset allocation as a first step. Whose brand of ETFs you buy is way down on the list of questions you will need to decide on.

My general recommendation for a first book is: https://www.amazon.com/Four-Pillars-Investing-Building-Portfolio/dp/0071385290

Buffet started investing when he was 10 years old and he is now 90. It’s the 80 years of steady compounding growth that has made him wealthy. Since you and I are not among the world’s best stock pickers, the prudent thing to do is let the market do the pricing and invest in a total market fund like VTI (see: The Simple Path to Wealth).

Do you know what $25,000 per year invested in the US total market at 11% average annual growth for 80 years comes to? $1.1 billion. Focus on earning and saving, use total market funds instead of stock picking, and you’ll do fine.

Custodial IRA

Roth Earned Income Eligibility

This is about a portfolio of yourself for hiring purposes. This forum is about Investment portfolios.

However, You should find a website you like and can get help from freelancers at UpWork.com to help build it out. Or check out Wix.com or one of those other simple website builders and there you should be able to find a template that fits your needs. If not maybe there is a platform that is designed around these type of webpages so it will have easy to build templates. You can purcahse a domain from NameCheap.com

Thank you so much for the advice!

I was discussing this elsewhere, and a couple more ideas came up: Emerging Market Sovereign Debt (like PCY), US Utilities, and Corporate Bonds; either investment grade or junk. Do you have any thoughts about those?

A lot of it has to do with how tax-efficient certain funds are. Funds that rebalance frequently (or actively trade) will have more buys/sells, which increases the turnover rate. Different asset ETFs are taxed differently as well.

https://www.schwab.com/resource-center/insights/content/etfs-and-taxes-what-you-need-to-know

Ultimately, you want to get more distributions (capital gains, dividends, etc) in a tax-advantaged account so you can escape the taxes they incur. You want higher turnover funds in a tax-advantaged account as well.

The best funds to hold in taxable accounts are broad-market index funds that rebalance once a year.

Some actively managed funds pride themselves in being "tax-efficient," (looking at funds of funds that claim this like $DUDE) though this is relative because passive funds will always be more efficient.

I think there are some missing. But these are mostly the standard funds that you would have chosen for a lazy 3 or 4 fund portfolio.

Not clear why they placed your largest bond allocation in a taxable account.

The only interesting one is $FNDF which is a schwab fundamental international index. You will have to do your own research to determine if you believe in "smart beta" styles. https://www.schwab.com/public/file/P-6970550

What do you mean by "create it automatically"? Do you mean their "Intelligent Advisor" service? If so, probably not worth the money.

It's a Roth IRA, so I assume you're saving for retirement? A target date fund is the easiest choice: it's all in one! Here's a list of Schwab target dates, you could just pick the one roughly appropriate for when you'd be retiring.

Alternatively, if you wanted to do your own mix with Schwab ETFs, I think SCHB (US total market) SCHE+SCHF (International total developed and emerging markets) and SCHZ or SCHR (US bond market OR Intermediate-term US Treasuries) are great choices for a low-cost, index-based portfolio. As for specific allocations, I'd start with however the appropriate target date is set. This might make sense if you want a different balance, but on a cost basis, the target dates are already quite low (so you wouldn't be saving much) and you're giving up the constant rebalancing you get with the all-in-one target date.

It looks a lot like iShares MSCI ACWI, which was renamed upon acquisition by Blackrock. But at 0.06% expense ratio you're doing better than that fund. "ACWI" stands for "All Country World Index", which is half US and half international (roughly).

Your allocations are pretty close to the Schwab target date funds. I would just invest it all in one of the Target Date Index Funds. They do all the rebalancing for you. I'd suggest the latest one - 2060.

Hey!

It's AWESOME that you're starting on this so early and the more you contribute early and often and the more you learn, the better you'll do.

Here's my biggest piece of advice: Keep it simple. Over the last 30 years the S&P 500 has gone up about 10%/year but the average INVESTOR has only earned about 4% per year. That huge gap is due to bad behaviors like switching strategies, chasing past performance, timing the market etc. Buying and holding early and often is the key.

I had trouble even following your portfolio. You have 12+ different funds. That's what I call "enough rope to hang yourself with". If you keep juggling those around you're very likely to get below market returns.

People like Vanguard because they're altruistic. They basically only offer good funds and they set up their business to work in the favor of the investor. You CAN do just as well with Schwab, but you have to avoid the pitfalls of actively managed funds, high fees, etc.

That said my specific advice to you: Put 100% of your portfolio in SWYNX. That's a "fund of funds" Inside of that is a bunch of index funds that auto rebalance and will reallocate towards more conservative investments as you get older. It guarantees you your fair share of market growth and it takes away all the rope you can hang yourself with.

Invest early and often. Buy and hold my friend. That's the key to great wealth! :)

Easy info to find.

For example:

https://www.schwab.com/public/schwab/investing/investment_help/investment_research/mutual_fund_research/mutual_funds.html?path=%2FProspect%2FResearch%2Fmutualfunds%2Ffees.asp%3Fsymbol%3DSWTSX

Search for “fee”

Here's a copy of the output of TD's M* X-Ray, for comparison:

https://smallpdf.com/shared#st=b7ff1bce-409c-49de-b0a3-5070714eece6&amp;fn=xray_portfolio_allocation_05-17-2021.pdf&amp;ct=1621395343513&amp;tl=share-document&amp;rf=link

'Unconventional Success' by David Swensen

https://www.amazon.com/Unconventional-Success-Fundamental-Approach-Investment/dp/0743228383/ref=mp_s_a_1_1?dchild=1&amp;keywords=swanson+allocation&amp;qid=1629991657&amp;sr=8-1

Commodities especially energy, real estate, EM bonds, high yield bonds, EMs. Then of course there are all sorts of artificial alternatives.
My standard first book on asset allocation recommendation: https://www.amazon.com/Four-Pillars-Investing-Building-Portfolio-ebook/dp/B0041842TW

If you want to actually help, do something that actually helps: https://www.givingwhatwecan.org/report/cool-earth/

Throwing money at actively managed "green ETFs" just makes you poorer, increases your risk, and doesn't really benefit anyone except the fund manager. You want to be rich so you have the money to positively and directly impact the world. Invest for the money, and spend the gains wisely in charity.

https://smile.amazon.com/Doing-Good-Better-Effective-Altruism/dp/1592409660/ref=sr_1_2?crid=32HAQIXXKKCBF&amp;dchild=1&amp;keywords=effective+altruism&amp;qid=1617850704&amp;sprefix=effective+alt%2Caps%2C273&amp;sr=8-2

What you are describing is called glidepathing. Glidepaths are a big negative in terms of returns. The only time it potentially make sense to tolerate a low stock allocation for longer term money is when your risk profile is at its absolute highest level: early in retirement. And even then the need to be additional factors to justify it.

As far as asset allocation if you are scared to invest this $200k pick a balanced asset allocation. Either use a good robo or read a book on asset allocation. ps://www.amazon.com/Four-Pillars-Investing-Building-Portfolio-ebook/dp/B0041842TW is my standard recommendation.

If your retirement is going to be much over 30 years 80/20 is best. Longevity risk skyrockets while sequencing risk remains about the same as a 30 year retirement. Best book on the topic: https://www.amazon.com/Living-Off-Your-Money-Retirement/dp/0997403403

I should do a post on 5 sample portfolios. Because yes that question does come up a lot. Since you seem anxious to learn what I'd suggest since you have time: https://www.amazon.com/Four-Pillars-Investing-Building-Portfolio-ebook/dp/B0041842TW

Anyway if you just want an answer a good approach is

2/3rds equally split between the 6 Schwab funds: FNDA, FNDB, FNDC, FNDE, FNDF, SCHREX

1/3rd in Goldman funds: GSLC, GSIE, GEM, GSSC (I like IWC more for this), DGS, VSS.

My opinion is it is dreadful. Depending on how you count technology is somewhere between 50-70% of QQQ and over 40% of VOO. So then you throw another 17,5% with ARKK and ARKQ? VBK and XMMO are going to have overlap but at least it is small / midcap. You want a portfolio to diversify risk not concentrate them. You have done a great job concentrating your risks.

I don't see anywhere in your post a justification for diverging from a mainstream portfolio balancing domestic with international, growth with value, spreading risk out aggressively between sectors... I'm not sure whether you don't want to do that or don't know that you should. If it is don't know I'd suggest a book on asset allocation something like: https://www.amazon.com/Four-Pillars-Investing-Building-Portfolio-ebook/dp/B0041842TW . If it is don't want to then I'd suggest a book about a sector that rose high and declined like say railroad history.

Never read it so not endorsing it, but knew of the chart from a few different sources. This one specifically is from https://www.amazon.com/Excess-Returns-comparative-greatest-investors/dp/0857193511/ref=nodl_

Don't think in "number of shares". Think in dollar amounts.

I wouldn't touch those individual stocks. It takes a lot effort to trade in stocks. At the moment, it may seem that certain picks (like AAPL) would be easy wins, but there are no guarantees.

The safest you can do, and still get great returns, is to diversify across a large number of stocks. IVV is pretty good for that purpose, as it holds a basket of the US stock market's largest companies (as measured by market capitalization).

An even better choice is VTI, which holds all stocks on the US stock market — all 3,600 of them.

I would honestly ditch your individual stocks and go all in IVV or VTI.

Then read this book on how to allocate your money for long-term savings and retirement purposes, using things like tax-advantaged accounts (IRAs).

I also strongly recommend this starter guide from /r/personalfinance on where you money should go.

First off you have what you want. FXAIX is an SP500 fund. FSMAX is everything in a total market index other than the SP500. In other words just VTSAX broke into two parts (hold them in a 5.5::1 ratio if you want TSM).

Second I think Fidelity brokerage is a far better option than either target date or simple indexes. You can put the 5% in the target date fund. But if you do this you want a real asset allocation. https://www.amazon.com/Four-Pillars-Investing-Building-Portfolio-ebook/dp/B0041842TW is my usual recommendation for learning the basics of asset allocation.

If you can invest in Vanguard funds, why would you mix them with the others?

Heed Lars Kroijer and read his book or Tim Hale's <em>Smarter Investing</em>.

There is no balance to strike: you either predict the market, or you rebalance regardless of the market. A long term perspective generally favors ignoring the market and having your own plan. A short term perspective reacts to the market and changes allocations relatively frequently. But you can't really have it both ways: ignoring the market moves but also reacting to them.

Your goal with bonds isn't to increase risk. Overall I think you're chasing all these ideas and would be better off getting a foundation in investing. You might check out "A Random Walk Down Wall Street" from the library, and see if you agree with both the ideas and the data in that book.

I can't respond to every idea here, but in general bonds are the safe area of your portfolio. EM bonds are higher risk as EM countries are more likely to stop making payments. You will also see higher yield - but there's no free lunch in the bond market, it's very efficient. So higher yield comes with higher risks. In addition, EM bonds have currency risk.

I recommend Benjamin Graham's book, The Intelligent Investor.

Because of it - and perhaps because of my natural inclination, too - I favour value funds over growth ones.

I admit I don't know that much about the latter, though.

You could read "A Random Walk Down Wall Street" and then decide if you are still better at stock picking than millionaire experts on Wall Street. You can buy "Vanguard Total Stock Market" and get a slice of every U.S. stock, and then "Vanguard Total International" to apply that to non-U.S. stock as well.

Executive summary, read "The Investment Answer" because it's really short and covers basics of investing. At a library for free or cheap at Amazon. With more time, "A Random Walk Down Wall Street" is an even better classic of investing.

For really long retirements, I'd guess a 3.3% withdrawal rate, which implies $7.5M to allow $250k/year withdrawal. You mentioned your income which is fine, but how much of that gets saved each year? You need about $2M more in growth and contributions.

If you have $5.5M all in stock funds, that's 100% equities. If the stock market drops, your entire retirement drops with it. A stock market crash can make you delay retirement. If that's okay, so be it. Otherwise it's time to use bond funds to bring stability.

I know, ordinary income tax. So you want "tax-exempt bond funds" which invest in municipal bonds. You can find "NY tax-exempt" or "CA tax-exempt" as well, which are exempt from both state and Federal tax. So the income is not taxed.

Do you have 0% international? You should really read about diversifying to international, and a bond allocation. The strongest argument I can make is to have you look at the most popular target retirement funds. All of them have international, and all of them have bonds. The experts are doing something different than you, which hopefully convinces you they might know something you don't.

Good luck.

>Also pretty cash heavy. I've been saving cash waiting for a downturn in the market to take advantage, and it just hasn't come.

I'm learning about portfolios this year. Here are my notes from A Random Walk Down Wall Street as to why it's best to just send money automatically each month.

Buy Low - Dollar cost averaging: send the same fixed amount of money to your index funds each month. You will automatically purchases fewer stocks when they are more expensive and more stocks when they are cheaper. Your average purchase price per share will be lower than the average price at which you bought the shares. P355 random walk

Sell High - Annual Rebalancing: determine your asset mix (e.g. 70/30 stocks and bonds). At the same time each year, bring your portfolio back into balance. If stocks went up, they will be more than 70% of your portfolio. So sell some (High) to buy bonds. If stocks are crashing, buy some (Low) to bring them back up to 70%. This will increase your rate of return overall in your portfolio. P360 random walk

I find the S&P 500 is about 75% or 80% of the US whole market by market cap.

Based on my prejudices, I would favour 40% - 60% of my US holdings in medium- and small-cap.

I would be interested in your thoughts on that.

I need to read more - I emphasise that these are just preliminary thoughts. I am plodding through The Intelligent Investor at the moment and have Bogle's <em>The Telltale Chart</em> bookmarked to reread.

http://www.businessinsider.com/world-stock-market-capitalizations-2016-11

https://blog.wealthfront.com/emerging-markets/ That is from Burton Malkiel, of A Random Walk Down Wall Street Fame.

Other research supports this as well. I am quite familiar with the Vanguard funds, which is why instead of using the Vanguard Total International Index I use VEMAX (Int Developed) and VTMGX (EM) with the weights I want.

Please read either "The Investment Answer" (~96 pages, if you don't want to read) or "A Random Walk Down Wall Street". Research tools cannot predict future performance - nor can anyone. The Securities and Exchange Commission (SEC.gov) even requires all mutual funds to warn investors about that:
&quot;That's why the SEC requires funds to tell investors that a fund's past performance does not necessarily predict future results.&quot;

I mention that because staying at TD Ameritrade for their research tools mostly makes sense if you believe you can outperform the market. There are a lot of active mutual funds, lead by people with millions of dollars to research the top stocks, and they still can't pull it off. About ~85% of funds can't beat the S&P 500 according to the SPIVA scorecard. And what's worse... the top funds for 3 years or 10 years are different. So that's my attempt to convince you that you can't predict performance - I encourage you to read from books that rely on decades of stock market history to reach their conclusions, like "A Random Walk Down Wall Street".

It's good that you've started investing. Take a look in the prospectus for those mutual funds, and you will find a fund's past performance does not necessarily predict future results. It's a warning required by the Securities and Exchange Commission (SEC, as in sec.gov) because you can't expect repeat performance.

I think VCSAX is interesting, because it's performance has been below S&P 500 but it fits your comment that "it looks as if the market is heading in a downward direction." You could also just accept the market performance, without trying to beat it, and buy Vanguard Total Stock Market. If you want to learn why historical data supports that approach, give "A Random Walk Down Wall Street" a read - it's probably available at a local library, so you can check it out for free.

Be careful when you pick non-Vanguard funds, and check for a high expense ratio. T. Rowe Price Small-Cap Value Fund (PRSVX) charges 0.80% or 0.92% of your money every year just to keep the fund running. You could buy iShares Morningstar Small-Cap Value ETF (JKL) and have a better expense ratio (0.30%) while also avoiding larger companies (PRSVX has ~18% mid/large, while JKL has ~12% mid/large). I didn't mention Vanguard Small Cap Value because it holds 40% mid/large cap, but it's expense ratio is even better at 0.08%.

I'd strongly encourage some offline reading where the author shows graphs with decades of stock market history. Since you're already tilting towards small cap, I'd favor Larry Swedroe's books as he tends to favor small & value tilts. I suggest that because what I'd rather hear is that you favor small cap owing to it's history of beating large caps, but you're aware that subtracting the 1980s leaves a dimmer picture. You need to be aware of the strengths and weaknesses of your particular choice. And with historical data you gain confidence that is harder to shatter when events turn for the worse.

I wouldn't advise predicting crashes and reading wordpress blogs for financial information. Blogs, TV news and online news all get paid by more visitors. If they ever compared their ideas to the S&P 500, they'd fail badly. But if they just touted the S&P 500 all day, they'd have no viewers. Which is why they avoid mentioning passive investing, and keep spouting new ideas or new fears. For example, your news article mentions a "a recent analysis of P/E ratios at major peaks ...". No, actually Robert Schiller has studied P/E ratios for decades and even refined the concept to the CAPE ratio to smooth out P/E over 10 year periods. It's not a new concept, but this article has to make it look new or you won't have any fear about it - it will seem like old news. That's why I'd strongly recommend some books with more academic citations - academics at least don't want to profit off you.

"A Random Walk Down Wall Street" is excellent, though for small cap investing I'd favor "The Only Guide to a Winning Investment Strategy You'll Ever Need" so you add more data and confidence to your small cap tilt. And even then, smaller than 50% might be prudent.

The fund industry has lots of people looking out for their own interests, not yours. So reading is important - "A Random Walk Down Wall Street" is in it's 11th edition, and it's conclusions are supported by the decades of stock market history it shows in various tables and graphs throughout the book.

Your accountant's role is figuring out the tax implications of selling, not deciding what investments you should make. I'd suggest diversifying into a total stock market fund or ETF that you can buy with no commission. There's Vanguard Total Stock Market, Schwab Broad Market, and iShares Total Market (free at Fidelity, I believe). These 3 are big institutions that have diverse choices of index funds with low costs.

Your next step will hopefully be mutual funds that can diversify your $300k trust. Fidelity, Vanguard and Schwab are all good choices - but make sure you're aware of the "expense ratio" in a fund you buy. Under 0.25% is good, close to 1.00% is bad. The higher the expense, the more of your money they take each year to keep the fund running.

Don't view "annual expenses" in aggregate. View them per fund - you should even decide which funds to keep or remove based on expense ratio. You cannot predict future performance, but you can decide how much each of your money will be consumed.

Also keep in mind U.S. mutual funds are assembled from a long list of ~3500 public U.S. companies. It's the contents of the funds that provide diversification. If you bought just Vanguard or iShares Total Market, you'd actually be more diversified than having 9 different U.S. stock funds. Capturing the entire market is diversification - holding funds that overlap misses that point.

A quick overview you might find useful is "The Investment Answer" (~96 pages), or a longer but more popular classic is "A Random Walk Down Wall Street". Check for those at a local library and see if that changes your thinking about picking mutual funds. Saving on fees, and focusing on diversification of assets (instead of number of funds) can help your portfolio.

You haven't said what you plan to do. You can retire on this money - will you? Does a chunk need to be sold to buy a house / apartment?

I think your bond percentage is extremely low. When you have sufficient assets to retire, you want to preserve that wealth. Your assets getting cut in half may spoil your retirement, but doubling those assets doesn't let you retire twice. The reason to have 30-40% bonds is to keep the money you have - to rebalance and fund your retirement from bonds when stocks take a severe hit.

I know it feels like a lot, but your money is too small for the next class of Vanguard funds (institutional). The S&P 500 index has Admiral class ($10,000) then institutional ($5 million) and institutional plus ($200 million). Other funds are similar - you won't hit any of the institutional classes while trying to diversify.

It's good you're thinking of expense ratios. But Schwab's 0.03% Broad Market and Vanguard's 0.05% Total Market are just 0.02% apart, which is $20/year on $100,000. One other danger here is avoiding international funds because of barely higher expense ratios, and not getting any foreign stock exposure.

Note most stock funds and bond funds yield about 2%. On $3 million, that's about $60,000/year. All of it taxable. I'd suggest both increasing your bond percentage, and using tax-exempt bonds.

Get some reading in from books that use a lot of stock market history. Larry Swedroe is probably too counter to your approach - he advocates a "value" and "small cap" tilt where you prefer growth. Hopefully you've read "A Random Walk Down Wall Street" already, or one of John Bogle's books.

Go to the column with "expense ratio" and click on the arrow that lets you sort that column ("A->Z"). You'll see BlackRock S&P 500 come out on top (0.11%) with a BlockRock international fund in 3rd. Expense ratios subtract directly from your money and tend to be stable. You can't predict future performance, but you can see how much of that performance is consumed by expenses.

When you buy an S&P 500 fund, you're getting about 3/4ths of the stock market, by market value. It takes a ton of small companies to add up to one Apple Inc. So you don't need growth and value and all that - you need to have a slice of the market, so your performance matches it. An index fund takes a sample of every company, in proportion to it's market weight.

Have you read "A Random Walk Down Wall Street"? The best learning advice I can give a scientist is to treat investing like an academic subject. When you're reading books, make sure they cite academic studies and use long time horizons (20-30 years). If you see a lot of 3 year performance claims, you can bet it's a new idea that hasn't been as proven as indexing.

You should be aware of another option for your old 403(b) plan: roll it into an IRA at Vanguard, Schwab, Fidelity, etc. You'd want a "trustee to trustee" transfer so everything is handled for you, and you'd start this at the place you want your retirement assets to go. So if you pick Vanguard, you'd fill out a form online to transfer your 403(b) to Vanguard, and they'd do the work. That allows you to pick a much better variety of funds than if you stay restricted to an employer's plan. Also, employers can make their choices worse, so you avoid that possibility.

How much does the stock market average per year, and how deep are the times when the stock market does badly? If you run the numbers, the opportunities to tax loss harvest evaporate over time. You may be pleased at first (which gets you in the door, paying the extra fees), but think 5-10 years down the line from each contribution.

If your money has grown 5 years at maybe 7% a year, that money has a +40% gain. Even if the stock market takes a major correction, down -20%, you can't sell at a loss. After some number of years, it takes a very steep decline to make it worth while.

Betterment makes it's fees off all of your money - but only recent money can tax loss harvest. And after a decade, when most of the fees aren't worth it anymore... you can't sell. You have so much gains that selling and moving to Vanguard would require planning for the tax consequences.

I'm biased - I'm at Vanguard and happy with their fund choices. Fidelity has a very competitive offering as well, allowing $0 commission trades on many iShares ETFs that are as good as Vanguard ETFs. But Fidelity might end that $0 trades program when it no longer profits their shareholders. Vanguard clients also own the company, so I trust their incentives more.

I'd strongly recommend reading "A Random Walk Down Wall Street". You can give up a lot of money in fees if you aren't aware of the cost of what you're getting. And I mean "cost" in a number of ways: higher expense ratios, funds requiring a "load" to buy or sell, and actively managed funds that fall further behind indexing given time.

Okay, so the house sale is motivating diversification. I ask because some people who profit off individual stocks are rather attached to the idea, and help diversifying can fall on deaf ears. If you haven't read "A Random Walk Down Wall Street" I'd recommend it (investment classic, in 11th edition, and based on decades of stock market history).

You have a few US stocks, and the most diversification you can get within the US is with broad US stock market funds (like SCHB, VTI). Those funds have thousands of US stocks rather than just a few. Their annual "expense ratio" is probably less than you spent making trades - for example, $9/trade at Schwab means $18 to buy then sell Amazon stock. If you invested $6,000 in Vanguard Total Market, that would cost $3/year... or $18 over 6 years. And that would be ~3500 stocks instead of one, so essentially the whole US market.

Right now you have a lot of individual company risk. If one company does well, you're happy (MSFT's July performance). But if that doesn't happen, your risk won't get paid off. An index fund holds these same stocks - but lots more as well.

You might want to consider tax if you switch. Your "cost basis" is how much money you put in. The IRS taxes you on the current value minus whatever you put in. So if you paid $5,000 for AMZN and it grows to $6,000 you owe tax on $1,000 of gain. In the 25% tax bracket, that's $250 if you hold it under a year, and 15% or $150 when held over a year (special rates for long-term assets).

In Jack Bogle's interview earlier today, he recommended "A Random Walk Down Wall Street" for reading. Jack Bogle founded Vanguard and created the first S&P 500 index fund in the 1970s.

Funds tend to bounce around average performance - up sometimes, down sometimes. But the annual expenses don't vary, so it's vital to know those. You might add that information, and look at the lowest expense ratio funds for investing.

I would only keep so much bonds if you're extremely risk averse and can only continue investing with a portfolio of half bonds. Otherwise, trim the allocation down to 10-20% of your portfolio.

You could benefit from reading "A Random Walk Down Wall Street", or if that's too long maybe "The Investment Answer". Guessing that IT or energy will do better than the market assumes you know better than the market. What's worse, if you're accidentally right you might put everything into your next guess, and you won't always be right.

The tricky thing is that past performance is no guarantee of future results. Open any prospectus - any booklet on a mutual fund - and by law they must tell you that. It's also on the SEC website. They will try to imply it, bragging about recent performance - but it's not predictive. You can also look at "best funds" over 3 year, 5 year and 10 years... and interestingly, they don't match.

Fidelity has a Total Market Index fund you should consider, with a 0.10% expense ratio. Even though that's lower than everything you picked, it's more diverse than holding 3 funds. The contents are what matter, and a Total Market Index fund owns everything. It has ~3600 stocks where the Energy ETF has only 370.

Start with "The Investment Answer" because it's about 96 pages. If switching strategy often reveals a short attention span, that's the book to read. A more patient read is "A Random Walk Down Wall Street" originally published 1973 and latest edition published in 2014. Your library may have both books, or look for a used copy on Amazon. It's very much worth your time reading something outside the financial news.

Stop looking at monthly or YTD performance, though. That does not predict future performance (per SEC warning that appears in every prospectus). The books I mentioned above use decades of performance data to confirm general ideas about investing.

I actually read and re-read A Random Walk Down Wall Street before starting investing.

I was not necessarily asking if we can time it, BUT I was curious under what conditions small cap stocks tend to go down. I.E. is it when oil prices go up, when interest rates/inflation go up or down, or some other factor? Mr. Malkiel discusses it somewhat in his book. He also recommends diversifying significantly and I tried to follow his recommendations as much as I could.

While Wellington is pretty good as far as actively-managed funds go, look into the history of active funds vs index funds before you worry about your funds (the index ones) under-performing. Historically, the index funds are in the upper fourth of performance each year within each asset class, and the ones above it change year to year. Over a 5-10 year period, very few active funds out-perform index funds. Over the time period between now and your retirement, the odds that any fund will outperform the index is very small (and even smaller is the chance that you or I or anyone else could pick said fund in advance).

The short story is that professional investors are woefully bad at out-performing a simple index.

Additional reading: check out A Random Walk Down Wall Street.

So you're saying

>Obviously we can't time the market

which I'd argue isn't obvious and might not be true (Bridgewater and a couple others seem to do okay at it), when the entire post is literally about nothing else than timing the market. Which is fine, I guess...

I do think there exist risk premia that can be harvested systematically -- the problem is that you're being paid to take that risk for a reason.

Check out one or the other (or both) of Asset Management by Andrew Ang and/or Expected Returns by Antti Ilmanen.

And realize that you're not at all the first person to try backtesting something that looked like it worked, and there are enough people who do this for a living that most of the best opportunities are pretty picked-over.

How far back does your backtest go? If you can, try your favorite parameters out of sample. Most people who do this are disappointed by the results, but maybe this is different.

Have a read of Meb (not Mark) Faber's "Global Asset Allocation" (free Kindle copy here ) and Rick Ferri's All About Asset Allocation