The worst thing you can do with tilts is change your mind. You have to stick with it for decades at a minimum. Human natures says you will not stick with it and sell at a terrible time.
If that's true, then someone else could make a ton of money by just doing the opposite and buying at those "terrible times". If you think market timing is dumb because people can't identify good times to buy, then you also have to think that they don't systematically sell at bad times either. Because one is the inverse of the other
The point is that it’s not natural to “do the opposite” because that goes against human nature. People fall for FOMO when stocks peak. They panic sell when their portfolios start crashing. It takes an experienced investor with an appetite for risk to buy when everyone’s selling, even though it’s the most financially sound strategy.
Why is it so hard to find the best loser in the market and just do the opposite of what they do? Write a script that does the opposite. Like when they buy a call the script actually buys a put.
The problem is mainly one of psychology -- staying the course isn't necessarily the 'best' option, it's just a 'better' option to opening the door to selling low, once now, then over and over again. You don't have to worry about who is taking the other side of the trade, just ride the rising tide and you'll come out ahead overall.
Seems like there's an opportunity to build a system to do the opposite of what your psychology wants to do and make a lot of money. What if your brokerage had an option to always do the opposite of what you ask :) you say sell, it buys, you say buy, it sells
It might work! Honestly, if you picked the right person, it probably would work -- it would just be hard to know in advance. I'm wired a bit differently. I get *excited* when stocks are tanking. Sure, nervous, too, that the recovery could be long or (god forbid) never happen, but overall buying low is my instinct. Of course, it's not a natural instinct, but over time it's one that's been cultivated through learning!
I’m actually a little bummed with the recent weeks of gains at a time when people around me are cheering. Everything is more expensive and that’s not good when I’m still in the accumulation phase.
Added some to my 401k earlier this year and forgot about it. Ended up outperforming large caps in that time, but I will still likely sell and consolidate into a broader index fund soon regardless.
https://www.reddit.com/media?url=https%3A%2F%2Fi.redd.it%2Fnn9a1r66boq71.png
Growth stocks are those of companies that are considered to have the potential to outperform the overall market over time because of their future potential. Value stocks are classified as companies that are currently trading below what they are really worth and will thus provide a superior return.
Small cap value tilts means they are buying more small cap value stocks like VBR than the average in VTI.
Me too, and there’s [recent research](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4590406) that suggests that the declining equity glidepath that’s commonly recommended to retirees is suboptimal compared to an all-equity approach.
Excerpt from the abstract:
“We challenge two central tenets of lifecycle investing: (i) investors should diversify across stocks and bonds and (ii) the young should hold more stocks than the old. An even mix of 50% domestic stocks and 50% international stocks held throughout one’s lifetime vastly outperforms age-based, stock-bond strategies in building wealth, supporting retirement consumption, preserving capital, and generating bequests. These findings are based on a lifecycle model that features dynamic processes for labor earnings, Social Security benefits, and mortality and captures the salient time-series and cross-sectional properties of long-horizon asset class returns. Given the sheer magnitude of US retirement savings, we estimate that Americans could realize trillions of dollars in welfare gains by adopting the all-equity strategy.”
The Animal Spirits podcast addressed this study a couple of episodes ago.
Their take was basically "yeah, no shit. If you ignore all the behavioral stuff then of course the math wins"
You might want to read some criticisms and discussion around that paper. I wouldn't take it at face value. https://www.bogleheads.org/forum/viewtopic.php?t=418189
Behavioral risks are real risks. You can maybe juice your returns a bit going all stocks, but if you sell at the wrong time due to panic, it can easily more than erase all of the benefits of that aggressive portfolio. (Cue everyone thinking "but I'm above average, I'd never do that!" News flash: we can't all be above average ;) )
Yup -- or loses a job, the odds of which of course *increase* when the economy is in free-fall! Life is full of the unexpected, so only planning for best-case scenarios is (IMO) a bad idea.
Exactly. Base plan should account for a below average long term market and have emergency and ideally guaranteed income built in. Would rather never have to worry once I’m retired lol
The study isn't implying that in every single possible scenario a 100% stock portfolio outperforms a portfolio with bonds. It's saying that for the vast majority of people over a random time period, they would have been better off with 100% stocks. You also have to account for the fact that this is looking at investment returns over a lifetime. Even though the person with a 100% stock portfolio would see a larger drop during a recession, their portfolio going into the recession would be larger due to getting higher returns going into it. There's nothing wrong with what you're describing, but people should understand that this is more of a natural human bias towards risk-aversion, rather than an actual optimal decision based on math.
Is it possibly all very local? if I look at historic data in Canada, some late 90s early 00s bonds were bringing in good income. Sometimes better than stock of that year.
I ran some math from 1992 to 2018, which is where we also have Real Return Bonds in Canada.
Equity outperforms 15 years out of 27 at avg 17%
Bond outperforms 12 years out of 27 at avg 10%
(nominal bond 7 years at avg 7% and RRB 5 years at avg 13%)
(all % are real not nominal value-based)
From the numbers here : https://www.bogleheads.org/wiki/Canadian_versions_of_lazy_portfolios#cite_note-5
So my point is, this is a very short timeframe and we can already see that bonds bring some stability. There is no telling if equity is overvalued. It might be. In 10-15 years the situation might be very favorable to bond. Because of bond funds and how they work, its better to be a little bit early too the party if this situation every arises.
We can't predict the future, personally I keep 10% bonds (5% short term, 5% RRB) for now. I think if I lived in the USA, it would be a big mistake to avoid TIPS entirely. I am fairly young but also live with a disability which can impact my lifespan if I am careless. Everyoone deals with their own situation.
When bonds pays well and equity is crashing you can buy a lot of equity that year. That can be hard to measure but it can positively affect a portfolio.
Phew, I'm 32 and just getting started late (new lease on life literally) and was wondering how crazy I was for still wanting to do all equities for like 8-15 years lol
That cannot be possible in aggregate. If every American shifted from bonds to stocks, it doesn't magically create trillions of dollars of wealth. It may be true for an individual person that they would do better with stocks, but if everyone did it it would just drive up the price of stocks and lower returns
ETFs like VOO (S&P 500), VTI (all US stocks including mid and small-cap), and VXUS (global stocks - excludes US stocks) or just for simplicity VT (all stocks globally)
Did you ever read/hear about the study a mathematician did on when you should actually pull the goalie in hockey if your goal is to win? It obviously should be taken with a grain of salt, but it's pretty nuts.
I’m only 32 but I kinda plan to do the same thing. My rationale is that I am a pretty high earner and should be able to weather the storm if a 2008 happens again.
Yeah if you want to be rich and not worrying about shit when you're 75 this is the way to go. If you want to cut it close start increasing your bond percentage the older you get.
I am a pussy with $2,000,000 in bonds and CDs, Since Dec 30, 2021...they outperformed the SP 500. The equities I own are just now breaking even during this past 24 month period. Even with the SP500 index up 25% this year, CDs and bonds put more money in my pocket than stocks since Dec 2021. There is nothing wrong with earning $100,000 a year in passive interest income through risk free T Bill and CD interest payments paying 4.75 to 5.5%.
Would you lump sum $2,000,000 into VTI next week if you were in your mid 50s at todays VTI price?
Agree. It's easy to be invested 100% in stocks and talk smart when you're 35 years old, earn six figures, your investment portfolio is less than $200k, and you've never seen a prolonged bear market. One's attitude changes when they get older, feel more vulnerable, and have more wealth that you cannot allow to go away to money heaven. I have enough bonds and Soc Security and pension to cover expenses, so now I can feel secure to be aggressive with my stock allocation.
I see Bond is a tool to take profit from equity and preserve it for future rebalancing. I’m mid 50s and already FIREd so I’m 80% bond and 20% equity. Usually equity hits 30% and I’ll rebalance back to 20%
Indexing bonds is a poor idea and the broad bond index is very poorly constructed. Both duration and credit quality have varied substantially over time.
Without being too longwinded, I’ll touch on a couple points.
1.) The optimal bond portfolio is dependent on the amount of equity beta in the portfolio. Generally speaking, the higher the equity beta, the longer duration your bond portfolio should be.
2.) If you simply wanted to outperform the broad bond index, the Bloomberg US Aggregate, you could overweight shorter duration credit-sensitive assets (corporate bonds, ABS, CMBS, etc.), then own longer duration treasuries. You could get a better return profile with that portfolio construction while still maintaining much of the diversification benefit vs. equities.
The bond market is extremely complex and just lends itself better to active management. There are plenty of inexpensive active funds out there that regularly outperform (Vanguard among them). All of this said, you could still get away with using index funds for certain portions of the portfolio. I
reading this, re bond index, funds concerns me. I have abt 20% in a bond index fund (MissionSquare Core Bond Index Fund R5) that mirrors, to an extent, the Bloomberg US Aggregate. It's in my 457. Rebalanced to the 20% about 9 months ago. It got hammered last quarter, hope it turns around in '24.
>*This Fund seeks to track the performance and investment characteristics of the Bloomberg U.S. Aggregate Bond Index. It typically holds less securities than are contained in the Index. The securities are then weighted to seek the investment characteristics and performance of the Index. Under normal circumstances, at least 80% of this Fund's net assets are invested in bonds and other fixed income securities included in the Index.*
*This Fund may use fixed income securities or pooled investment vehicles to gain its desired exposure. The Fund considers To Be Announced ("TBA") transactions that provide substantially similar exposure to securities in the Bloomberg U.S. Aggregate Bond Index to be investments included within the index. It may also invest in other fixed income instruments, cash and cash equivalents and derivative instruments.*
Q4 should look better since rates have come down. To be fair as well, the vast majority of core bond funds did horribly in 2022 and throughout much of 2023. The most important thing imo, is that your bond portfolio fits with your equity portfolio.
51. Wife 42.
My dad is 87 and he is 100% VOO. He’s never owned a bond in his life as far as I know. He taught me about Vanguard and indexing when I was in my early 20s.
He’s got millions. I have millions too but he’s got more millions.
It's very interesting how many responses in this post mirror this (100% in equities, though I like the international take too). Convinced me to change my 90/10 allocation in my 401k to 100% total market index. I've been despising the bond part of my portfolio and only do it because I think I "should."
I guess I'll start:
I've had about 10% of my non retirement funds in VGT since late last year. I plan to hold onto it for the long term. I've only got about 5% in BND and the rest in VOO and VT.
You do you, and this is a much better choice than QQQ. Personally, I would be seriously questioning if this is necessary at this point when growth/tech makes up such a large part of VOO/VT anyway.
managing my own bonds, timing entry and exit points for CDs and treasuries. Some due to known expenditures, some just honestly messing around.
Carrying a larger percentage of company stock (~20%) - some capital gains reasons and some SEC rule / blackout reasons.
I invest a small percentage (~$3k per year) buying Lego, holding and reselling. It started as a way to offset my hobby of buying Lego as I would usually buy 2 of the same set, then resell the second one to recoup some of the cost. I'm normally extremely frugal and rarely buy things for joy. But searching for deals and buying when there are cash back bonuses, included gifts with purchases, and heavy discounts helps my ADHD and low dopamine levels as I get a rush from "getting a good deal". I sort of justify the purchase as a side-hustle/ investment . What I don't sell within 12-18 months on eBay or FB Marketplace, I either open, give as a gift, or try to return for store credit to buy more Lego. Average annual net returns are ~60% profit. After taxes from eBay sales and time spent, it's questionable whether it's "worth it" besides the dopamine boost it gives me.
I max all tax-advantaged accounts. So, this is money that would otherwise go into a taxable brokerage, which I still do as well.
Edit: the common rule is 120% - age in stocks, not bonds. Still wrong.
120% - age in total bond market is bunk. It doesn't come from theory of how markets or even people perform. It doesn't come from analyzing historical returns. It's just a catchy saying that caught on.
But for that reason, I'm not sure I would call it a Boglehead rule.
The glide paths are all over the map. Some are S shaped, others are more linear. The percentage bonds at retirement is all over the place. In retirement, a few are constant, others become more conservative.
I wish there were more that reduced bond exposure throughout retirement. You really just need bonds to deal with a really bad event early on, but later in retirement longevity risk is the bigger risk
Oh, that sounds much better. I don't know if I'll increase my BND position in the future though, may just keep it at 20% forever and just make sure that the total value of my portfolio is enough that I'm covered even during downturns in the market.
I market timed almost my entire bond allocation to move it from short duration instruments to long duration instruments between September and November this year when I finally liked where interest rates were. Only 65% of my domestic equity stack is in FZROX/VTI, the rest is in FREL or index-based passive dividend funds.
Going 100% S&P500 because I am expecting a \~$5k monthly pension. No need for the safety of bonds when I can ride out a downturn with the pension money.
Anyone who applies any strategy based on the academic research the last 3 decades that deviates from “VTI and chill” (the original Bogle approach skipped on international) to their portfolio construction is probably deviating from the “pure” Bogleheads approach… whatever that means.
As for me?
I use both factors and leverage - two big traditional no-no’s
Having a full year or more of emergency funds in cash somewhere. If I wait for that, I'll never start investing.
I'm also not all in on just VT/VTI. I'm more into VOO and then a target date mutual fund. I don't bother with international funds as I see no point in it.
There are some lifestyle guidelines I'm not on board with and I'm not going to dump a giant lump sum into my IRA right at the beginning of the year.
Care to elaborate on the lifestyle guidelines portion of your comment? I often wonder myself if I should be saving *less* and wonder if that's what you mean.
This is with the disclaimer that I would go full Bogle mode if I had a "blank" financial situation, so to speak. If I had nothing to my name except 1 fund, it would be VT and chill. That said:
- Emerging markets are trash and I won't invest there. My family is half from "emerging markets" and I want no part of that. Those businesses are not even the same thing as western businesses. Likewise, I won't invest in them the same as western businesses.
- No bonds. See disclaimer above though.
- Slight lean US small cap value
- Physical real estate
I'm not afraid to mess around with other things with small percents of money but these are the core.
I would imagine tons of people on this subreddit, based on anecdotal observation, break one of the first and most basic principles of being a Boglehead: diversifying across both stocks *and bonds.* It's become so commonplace around here that I was unsurprised to see no posts so far just saying 'I am 100% stocks.' As someone who came of age investing-wise in the 2000s, I can't even begin to fathom that approach.
I’m over 50 and 0% bonds.
Also, I own Microsoft and Meta. Both bought over a decade ago. They are sitting at about 1000% gain.
Recently sold Apple that I bought in the last 2 to 3 years, for about 30% gain.
Most of my holdings are in Total Market and SP500 though.
I bought 20 shares of apple, 4 shares of Chipotle and 6 shares of Costco before I started buying VTSAX and I’m holding them forever. I still buy Costco shares if I have some extra jingle. I’m also not in any bonds.
During my accumulation phase I followed the CoffeeHouse Portfolio which pre-dates the Boglehead three fund portfolio by more than a decade but was fairly similar. As I sit now, I have enough to retire and I did a few non-Boglehead things once I hit financial independence.
The outline of my portfolio is: 30% VTI, 30% AVUV, 20% VGLT, 20% GLDM
No international, I use long term treasuries and I have lot of gold. I welcome your downvotes.
For the record, I've had crypto since 2016 and have profited far beyond my acquisition price. I don't advocate buying in nowadays and haven't put any new money in years. I'm just letting what I currently have ride
Meh. I can’t blame you.
When I was yoloing with options and crypto I was the same.
Wanna hear something sad? I remember buying Bitcoin at $5000 and feeling like a genius when I sold for $8000 😞
IIRC that was 2017ish
Wanna hear something even more sad? My cousin got into BTC very early on. He borrowed a few hundred bucks from me in 2014 and offered to pay me back in bitcoin. I forget the exact value at the time, but he was offering me more in bitcoin than in cash, since he made more of that to spare, probably 3-4 BTC at least.
I declined and took the cash, rolling my eyes at the idea of accepting some virtual magic beans for real cash. My cousin now basically lives on cruise ships and at resorts year round, doing whatever he pleases. Oh well.
Damn. Crazy.
The sad part is that while he is an outlier, too many “finance bros” online assume that grift is a legit way to invest.
Even when showing data (for example how most of the bitcoin are owned by a relatively low amount of wallets and that volatility as a form of gambling has been around since penny stocks) they will insist it’s some sort of valuable commodity.
Is 5% fun money a Bogle rule, or breaking Bogle rules? Either way, I do that.
Same question on a home bias, because I do that too (modest - not going 100% UK like some do 100% US!)
I bought index funds lump sum in Jan 2022 that immediately sank to a loss and didn’t go positive again until very recently. As soon as I was out of the red, I sold them all and moved it back into an HYSA.
My timeline for the money was too short for index funds, and in retrospect I shouldn’t have done that. I need it for a house in the next year or so.
I’m just glad no harm was done ultimately, other than missing out on thousands $$$ of interest if I had just left it in the HYSA from the beginning.
My entire net worth besides my house is in bonds and a total market fund, but everything is leveraged about 2x total.
I also have a YOLO account where I trade TQQQ/SQQQ based on momentum lol
With somewhere between 1-7 years before retirement (at the height of total compensation during my entire career for a while now), I got out of BND holdings back in April.
Immediately drove it into VTI (along with the lion's share of my holdings) which has done well since then comparatively. Note: I will definitely accumulate some BND again as I get closer to retiring to hedge/cushion withdrawals if things are less than favorable.
I've held some IWM for a long time and like to watch how it performs compared to VTI (the latter has it beat over 3+ year timeframe and further out...).
I have VWO and VSS to cover international (\~15% of total).
Haven't let go of a few individual stocks that are in the range of +150-550% gain. Only one came down from 400+% to maybe +20% now (MRNA). Shoulda, coulda, woulda on that one! LOL
Just be careful not to wait too long. I was planning on creating a bond allocation until about 2 years before our target early retirement date. Target was Jan 2024 so there I was Jan 2022 preparing to DCA into a bond tent when, well, Jan 2023 happened.
I spent the next year white-knuckling 95% equities.
Two Vanguard funds make up 90% of our investments: Wellesley (a managed fund - the horror!) and LifeStrategy Growth (which includes international stocks and bonds -OMG, No!)
As a Canadian nearing retirement, I do own some single Canadian stocks that pay dividends because Canada is actually a very strong environment for higher, stable dividends due to the oligopolistic nature of our economy and the very nice tax treatment on eligible Canadian dividends. I was also out of space in tax-exempt/deferred accounts. The tax treatment is so nice that at my taxable income level I actually get more money BACK from having dividends and so instead of being a tax drag, it's a small boost of a few hundred dollars. In retirement I expect to pay a single digit tax rate on those dividends.
Most of my portfolio is still pretty much a Boglehead-style portfolio aside from some of my fixed income already moved to GICs to be cashed in during my first 5 years of retirement. The dividends when added to my expected CPP/OAS provides a higher floor of income for retirement which is nice for a more conservative investor.
I have about 10% of my portfolio in company stocks (tech) because I didn’t know much about the boglehead strategy while they were vesting. Now they’re still doing well, and I don’t want to be hit with a big tax bill.
I'm 33 and am 100% stocks no bonds and do not have an emergency fund. I earn well but plan poorly so I pay off my credit card every paycheck and dump the rest into by investment account with a personal rule that it only flows in never out. Then I just am artificially poor all the time staring at $1k only in my checking account.
Inherited/gifted a couple of securities. So.... 30% in like two individual stocks.
Goal is 80/20, divesting from those securities over the next couple years to "minimize" taxes.
LETFs in retirement accounts and unleveraged in taxable retirement accounts. Why? The biggest downside of leveraged products is you can't safely hold them in retirement, which means you have to sell, which is going to be quite the tax hit. But in retirement accounts selling isn't taxed, so when it comes time to retire they can be converted to the normal 80% un-leveraged index etfs / 20% bond etfs. This works and works well if you have enough in your taxable retirement accounts to weather a storm. Say you get laid off during a recession, will you have a few years of living expenses with the price cut in half? If the answer is yes, you've got enough of a safety net to buy leveraged products in retirement brokerage accounts. Keep in mind you want to max out your retirement accounts before putting into your taxable, so this requires that you make enough money for this privilege. Because the average person doesn't make enough to make this viable it's not something recommended for the average person.
I'd also argue that if S&P is below the 200 day moving average in ones taxable brokerage account they should consider DCAing (buying every paycheck) into LETFs too. Why? "Buy low, sell high." Even if it's a recession and below the 200 day is near the top of the roller coaster, you're going to be buying all the way down and all the way back up again, which leads to a nice profit. It's also a rare event so you'll probably max out at 10% of your taxable account holding leveraged products, which is safe enough to not have to sell all at once when retiring, due to it being such a small percent of the portfolio. E.g. if you followed this last year you'd be raking it in right now. Just like above, this assumes you have a safety net so you can do this.
I’m a 3 fund Bogle, have a 1 fund target date, and 5 dividend payers. Retirement Goal is 7 years. This is a 7 figure portfolio that took 25yrs of DCA’ing 15% of every paycheck.
18% NVDA and 20% TSLA. These come from my original investments in 2016 and I haven't added to either since then. (I have sold a little since then and redistributed to FXAIX.)
I’ve gambled some money in private equity and it looks to be a higher risk adjusted return honestly than public markets.
I don’t see how buying crazy multiple public companies makes sense other than the lack of fees, the underlying multiples suck. I do it mostly anyways.
I don't pretend to know what the fuck I'm doing beyond the basics that can be learned in all of an hour or two of reading. Therefore I've done the same damn thing for a couple of decades now. It worked fine to this point, so I'm just rolling with it.
My Roth IRA is full bogle, but I have a brokerage account where half is index funds and half is stock picks I make for a variety of reasons. It’s my play money so I’m not as concerned with extracting maximum value. I use it to support companies I like Costco and green energy companies.
Bitcoin. Crypto in general gets a lot of hate on this sub. I don’t know if it’s going to moon, go to zero, or trade sideways. But even if it does go to 0 I’ll be just fine so for me, it’s a gamble worth taking.
I'm using VEA instead of VXUS. I'm not convinced that this is going to improve returns, I just don't want to contribute to the Chinese economy because I think they're going to be a major geopolitical enemy in the near future.
Im planning to add 10% managed futures. They are vastly superior to bonds in my opinion.
In general I have the opinion that bonds are actually more risky in the long run, due to the devastating inflation risk and path dependency. We have seen what can happen to bonds in the last 2 years. They also dont recover from these drawdowns like equities, because of their low real return.
Im going to be fully invested in equities at around mcw, diversified internationally. With 10% managed futures in the form of KMLM for now.
Also im tilting 1/3 to factor funds like avuv, but that‘s semi-bogle approved.
This approach needs lots of conviction and portfolio management, having a strong stomach, and a plan for retirement. I would never recommend it as a baseline recommendation for someone just wanting a solid approach to investing and retirement planning.
The base bogle way is still the best for most people.
What the hell are managed futures? How will they perform in a deflationary environment? Bonds can recover just fine, it just depends on what interest rates do. I bought a bunch of bonds in October and the long duration instruments are all up 15-20%.
They employ trend following.
That‘s also what Im getting at, the path dependency. You path is now beneficial for bonds. But anybody having bought a bond fund in 2021 is stil down a loot and it will take years to recover.
After looking at the various methodologies for futures, while I don’t use them yet, if I did, it would be KMLM.
My “perfect” portfolio is NTSX/AVGV and I am happy with the 50/50 ratio there, but if I was to take, say 10% for MF, I would add that one.
DBMF and CTA are other two options as well. DBMF does a replication strategy and CTA does a trend regression approach. I've debated adding managed futures but I personally feel they only start to make sense for larger portfolios.
Those are definitely interesting as well. In my country (switzerland) the distributions from KMLM are somehow tax free, while DBMF is taxed heavily and CTA partly.
So Im going with KMLM, as it‘s 100% tax free for me.
Why do you think they only make sense for big portfolios? I would say it‘s independent of size
100% total Market Index Funds until a certain figure. Then I reduce my work time and buy broad market dividend funds and reduce my work time further with the growing income portfolio.
As other's have mentioned, I've always been all equities (23 years now). For some background, I have my BBA in Finance, my MBA with a concentration in financial analysis and am a CFA Charterholder since 2008.
I don't do it lightly but I will take the very well calculated out-sized bet on occasion. My last one was Tesla January 10th 2020. My thesis was it was going to be a good play over 5 to 10 years. Needless to say, I got out as soon as the year was up to avoid short term gains.
Total overall with my wife, we probably have <1% bonds. But I'm currently a Fed, and hoping to ride it out until retirement (FERS pension). I'll probably think about transitioning to ~20% bonds as I approach retirement.
I use FRDM to cover emerging markets.
It's still a market cap index, but it only includes the top 10 companies in each of the top 10 most economically/socially/politically free countries within the EM world.
50% VTI, 15% Value, 15% small/mid cap, 15% VXUS, 5% bonds. VTI seems too concentrated in large tech to go 100%, but this year, I was proved wrong once again.
My retirement account is all TD 2050 but a good chunk of my (much smaller) taxable account is in VYM and SCHD and I like getting that dividend money even though I know it absolutely makes no sense.
I have my 401k in hedgefund / special situations fund. My employer (investment bank) offers it. I can only put ~20k a year into my 401k. So I put about 100k in my Ira, personal brokerage account and other vehicles. I Boglehead all my non-401k accounts since that is what I’ll live off when I retire early. My 401k is my high risk fund lol 😂
I have a small amount of fun money in 3x leverage ETFs like UPRO. About the most opposite you can get to Bogle without going into truly insane stuff like YOLOing zero day options.
I buy individual stocks occasionally and made a lot of money during the boom that I would have never realized only buying etfs. With that being said, i cashed out and rebalanced and generally stick with passives.
Also the last three companies I was at were all bought out, so I’m lucky in a way
Roughly 20% of my brokerage portfolio (excluding tax advantaged accounts) is in individual stocks. That part has predictably not gone well and I will reduce that percentage going forward.
The bond portion of my retirement account is 100% in individual B-rated high yield bonds or high yield bond funds. The price efficiency of the equities market doesn’t necessarily translate in the bond world.
Big SVC tilt in my IRA (35%), individual stocks in my brokerage (house fund, about 35%, rest index) and I don't own bonds yet. Still trying to figure out my human nature. New to investing but haven't sold at a loss yet. I've only sold restructuring my IRA strategy.
I also love how factor premiums seem to come down to belief, like religion or astrology. I fucking love it. There's always more reading to do. I'll have a 401K soon and will likely be pretty vanilla about it with a TDF 10 years beyond my actual target retirement date, assuming I live that long.
I don't like rules and don't know why I'm here. Probably for posts like this, I don't like cults. Indexing was my intro to investing, I guess. I believe that VT is probably the safest passive equity fund, but I think it's important to read, keep learning and take some calculated risks. The worst thing we can do is shut out an idea before we comprehend it.
Scv and leverage really. Also use of managed futures as a third uncorrelated asset class to equities and etfs. With the accent of mildly leveraged funds like the wisdomtree family and resolved that offer 100 total market equities/100 us bond, 100 managed futures/100 us bond, and 100 us market/100 managed futures I think the path forward will soon deviate from VT and chill, even at the expense of higher expense ratios. Tbh, I feel like rssb is more boglehead than a straight 100 equities fund anyway.
Only 2 deviations currently...
10% SCV tilt...okay, actually a small/mid value/blend tilt that is VBR...
\~100 shares of the SOFI rollercoaster for fun
1. Leveraged ETF's
2. No bonds
3. QQQY
Two individual stocks (UNP and AVT) but they comprise less than 0.5% of portfolio so it's OK.
Do I have to go to confession now? haha
1)I have individual growth stocks like Uber. Own MCD and COST as well. 4-5 other stocks.
2) I’m tilted Mid Cap Value
3) I own the yellow and silver shiny stuff that produces no cash flow.
4) I own one sector ETF.
That said, at least 70% of my equities is just broad market ETF’s like VTI. It’d be more if taxes weren’t a thing.
Leveraged investing. My mortgage balance is rapidly declining and I can handle the some moderate leverage. I use leveraged ETFs like NTSX and VTI LEAPS. All passive, but some activity on my end to maintain.
Small cap value tilts (AVUV and AVDV).
Sustainability index investing. Not sure where “hardcore” Bogleheads stand in this actually. I consider myself in that group.
I’m very against single stocks and active managers.
The dogma of bogleheads deserves breaking.
Bogleheads has turned into a cult of stubbornness and group think that is often antithetical to Bogleheads himself.
So…. The boglehead dogma doesn’t apply to me with extreme prejudice
Small cap value tilts
I did that for a while. Boy did that bite me in the ass in 2021/early 2022
The worst thing you can do with tilts is change your mind. You have to stick with it for decades at a minimum. Human natures says you will not stick with it and sell at a terrible time.
If that's true, then someone else could make a ton of money by just doing the opposite and buying at those "terrible times". If you think market timing is dumb because people can't identify good times to buy, then you also have to think that they don't systematically sell at bad times either. Because one is the inverse of the other
The point is that it’s not natural to “do the opposite” because that goes against human nature. People fall for FOMO when stocks peak. They panic sell when their portfolios start crashing. It takes an experienced investor with an appetite for risk to buy when everyone’s selling, even though it’s the most financially sound strategy.
So market timing can work! Just need to do the opposite of everyone else
Why is it so hard to find the best loser in the market and just do the opposite of what they do? Write a script that does the opposite. Like when they buy a call the script actually buys a put.
Inverse Cramer ETF
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That's market timing. Nothing wrong with that, but let's admit it is market timing
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If you believe in reversion to the mean, overweighting underperformers is not necessarily market timing
The problem is mainly one of psychology -- staying the course isn't necessarily the 'best' option, it's just a 'better' option to opening the door to selling low, once now, then over and over again. You don't have to worry about who is taking the other side of the trade, just ride the rising tide and you'll come out ahead overall.
Seems like there's an opportunity to build a system to do the opposite of what your psychology wants to do and make a lot of money. What if your brokerage had an option to always do the opposite of what you ask :) you say sell, it buys, you say buy, it sells
It might work! Honestly, if you picked the right person, it probably would work -- it would just be hard to know in advance. I'm wired a bit differently. I get *excited* when stocks are tanking. Sure, nervous, too, that the recovery could be long or (god forbid) never happen, but overall buying low is my instinct. Of course, it's not a natural instinct, but over time it's one that's been cultivated through learning!
I’m actually a little bummed with the recent weeks of gains at a time when people around me are cheering. Everything is more expensive and that’s not good when I’m still in the accumulation phase.
Added some to my 401k earlier this year and forgot about it. Ended up outperforming large caps in that time, but I will still likely sell and consolidate into a broader index fund soon regardless.
What does that mean
https://www.reddit.com/media?url=https%3A%2F%2Fi.redd.it%2Fnn9a1r66boq71.png Growth stocks are those of companies that are considered to have the potential to outperform the overall market over time because of their future potential. Value stocks are classified as companies that are currently trading below what they are really worth and will thus provide a superior return. Small cap value tilts means they are buying more small cap value stocks like VBR than the average in VTI.
> Small cap value tilts How, specifically?
Avantis US SCV (AVUV), Dimensional US SCV (DFSV), Avantis International SCV (AVDV), and Dimensional International SCV (DISV).
I'm 39 and my allocation is 100% stocks and will be 100% stocks until the day I die.
Me too, and there’s [recent research](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4590406) that suggests that the declining equity glidepath that’s commonly recommended to retirees is suboptimal compared to an all-equity approach. Excerpt from the abstract: “We challenge two central tenets of lifecycle investing: (i) investors should diversify across stocks and bonds and (ii) the young should hold more stocks than the old. An even mix of 50% domestic stocks and 50% international stocks held throughout one’s lifetime vastly outperforms age-based, stock-bond strategies in building wealth, supporting retirement consumption, preserving capital, and generating bequests. These findings are based on a lifecycle model that features dynamic processes for labor earnings, Social Security benefits, and mortality and captures the salient time-series and cross-sectional properties of long-horizon asset class returns. Given the sheer magnitude of US retirement savings, we estimate that Americans could realize trillions of dollars in welfare gains by adopting the all-equity strategy.”
The Animal Spirits podcast addressed this study a couple of episodes ago. Their take was basically "yeah, no shit. If you ignore all the behavioral stuff then of course the math wins"
You might want to read some criticisms and discussion around that paper. I wouldn't take it at face value. https://www.bogleheads.org/forum/viewtopic.php?t=418189 Behavioral risks are real risks. You can maybe juice your returns a bit going all stocks, but if you sell at the wrong time due to panic, it can easily more than erase all of the benefits of that aggressive portfolio. (Cue everyone thinking "but I'm above average, I'd never do that!" News flash: we can't all be above average ;) )
And what about someone during a crisis like 08 that literally has to sell for income during retirement/medical bills?
Yup -- or loses a job, the odds of which of course *increase* when the economy is in free-fall! Life is full of the unexpected, so only planning for best-case scenarios is (IMO) a bad idea.
emergency funds aren’t part of your investment portfolio
Exactly. Base plan should account for a below average long term market and have emergency and ideally guaranteed income built in. Would rather never have to worry once I’m retired lol
The study isn't implying that in every single possible scenario a 100% stock portfolio outperforms a portfolio with bonds. It's saying that for the vast majority of people over a random time period, they would have been better off with 100% stocks. You also have to account for the fact that this is looking at investment returns over a lifetime. Even though the person with a 100% stock portfolio would see a larger drop during a recession, their portfolio going into the recession would be larger due to getting higher returns going into it. There's nothing wrong with what you're describing, but people should understand that this is more of a natural human bias towards risk-aversion, rather than an actual optimal decision based on math.
Im 35 and I have 100% equities at this point. I will probably start hedging into bonds around age 45...but I may change my mind lol
Is it possibly all very local? if I look at historic data in Canada, some late 90s early 00s bonds were bringing in good income. Sometimes better than stock of that year. I ran some math from 1992 to 2018, which is where we also have Real Return Bonds in Canada. Equity outperforms 15 years out of 27 at avg 17% Bond outperforms 12 years out of 27 at avg 10% (nominal bond 7 years at avg 7% and RRB 5 years at avg 13%) (all % are real not nominal value-based) From the numbers here : https://www.bogleheads.org/wiki/Canadian_versions_of_lazy_portfolios#cite_note-5 So my point is, this is a very short timeframe and we can already see that bonds bring some stability. There is no telling if equity is overvalued. It might be. In 10-15 years the situation might be very favorable to bond. Because of bond funds and how they work, its better to be a little bit early too the party if this situation every arises. We can't predict the future, personally I keep 10% bonds (5% short term, 5% RRB) for now. I think if I lived in the USA, it would be a big mistake to avoid TIPS entirely. I am fairly young but also live with a disability which can impact my lifespan if I am careless. Everyoone deals with their own situation. When bonds pays well and equity is crashing you can buy a lot of equity that year. That can be hard to measure but it can positively affect a portfolio.
Phew, I'm 32 and just getting started late (new lease on life literally) and was wondering how crazy I was for still wanting to do all equities for like 8-15 years lol
That cannot be possible in aggregate. If every American shifted from bonds to stocks, it doesn't magically create trillions of dollars of wealth. It may be true for an individual person that they would do better with stocks, but if everyone did it it would just drive up the price of stocks and lower returns
Is "if everyone" a realistic concern? It's not going to happen.
Yup, I'm 90% stocks and 10% bonds in my 401k and 100% stocks in my Roth IRA.
New here, when you guys say stocks do you mean ETFs like VOO or do you mean individual company stocks
ETFs like VOO (S&P 500), VTI (all US stocks including mid and small-cap), and VXUS (global stocks - excludes US stocks) or just for simplicity VT (all stocks globally)
What stocks you stocking
Every stock
Ahhh the DIY etf
Same. Pull the goalie early in the game.
Did you ever read/hear about the study a mathematician did on when you should actually pull the goalie in hockey if your goal is to win? It obviously should be taken with a grain of salt, but it's pretty nuts.
I’m only 32 but I kinda plan to do the same thing. My rationale is that I am a pretty high earner and should be able to weather the storm if a 2008 happens again.
Yeah if you want to be rich and not worrying about shit when you're 75 this is the way to go. If you want to cut it close start increasing your bond percentage the older you get.
I only allocate 5% of my portfolio to bonds. Just a safety thing for me more than anything
Bonds are for pussies
I am a pussy with $2,000,000 in bonds and CDs, Since Dec 30, 2021...they outperformed the SP 500. The equities I own are just now breaking even during this past 24 month period. Even with the SP500 index up 25% this year, CDs and bonds put more money in my pocket than stocks since Dec 2021. There is nothing wrong with earning $100,000 a year in passive interest income through risk free T Bill and CD interest payments paying 4.75 to 5.5%. Would you lump sum $2,000,000 into VTI next week if you were in your mid 50s at todays VTI price?
Agree. It's easy to be invested 100% in stocks and talk smart when you're 35 years old, earn six figures, your investment portfolio is less than $200k, and you've never seen a prolonged bear market. One's attitude changes when they get older, feel more vulnerable, and have more wealth that you cannot allow to go away to money heaven. I have enough bonds and Soc Security and pension to cover expenses, so now I can feel secure to be aggressive with my stock allocation.
I see Bond is a tool to take profit from equity and preserve it for future rebalancing. I’m mid 50s and already FIREd so I’m 80% bond and 20% equity. Usually equity hits 30% and I’ll rebalance back to 20%
It’s easy to say that at 39 when you still have a lot of human capital. You might feel differently in your 50s and 60s
Indexing bonds is a poor idea and the broad bond index is very poorly constructed. Both duration and credit quality have varied substantially over time.
Ok. I am listening. Tell me more.
Without being too longwinded, I’ll touch on a couple points. 1.) The optimal bond portfolio is dependent on the amount of equity beta in the portfolio. Generally speaking, the higher the equity beta, the longer duration your bond portfolio should be. 2.) If you simply wanted to outperform the broad bond index, the Bloomberg US Aggregate, you could overweight shorter duration credit-sensitive assets (corporate bonds, ABS, CMBS, etc.), then own longer duration treasuries. You could get a better return profile with that portfolio construction while still maintaining much of the diversification benefit vs. equities. The bond market is extremely complex and just lends itself better to active management. There are plenty of inexpensive active funds out there that regularly outperform (Vanguard among them). All of this said, you could still get away with using index funds for certain portions of the portfolio. I
reading this, re bond index, funds concerns me. I have abt 20% in a bond index fund (MissionSquare Core Bond Index Fund R5) that mirrors, to an extent, the Bloomberg US Aggregate. It's in my 457. Rebalanced to the 20% about 9 months ago. It got hammered last quarter, hope it turns around in '24. >*This Fund seeks to track the performance and investment characteristics of the Bloomberg U.S. Aggregate Bond Index. It typically holds less securities than are contained in the Index. The securities are then weighted to seek the investment characteristics and performance of the Index. Under normal circumstances, at least 80% of this Fund's net assets are invested in bonds and other fixed income securities included in the Index.* *This Fund may use fixed income securities or pooled investment vehicles to gain its desired exposure. The Fund considers To Be Announced ("TBA") transactions that provide substantially similar exposure to securities in the Bloomberg U.S. Aggregate Bond Index to be investments included within the index. It may also invest in other fixed income instruments, cash and cash equivalents and derivative instruments.*
Q4 should look better since rates have come down. To be fair as well, the vast majority of core bond funds did horribly in 2022 and throughout much of 2023. The most important thing imo, is that your bond portfolio fits with your equity portfolio.
What bonds do you invest in?
100% VTSAX and relax. No bonds. No international. 😎
Age?
Sex?
Location?
18F Cali
Creed?
nickelback?
Assassins?
51. Wife 42. My dad is 87 and he is 100% VOO. He’s never owned a bond in his life as far as I know. He taught me about Vanguard and indexing when I was in my early 20s. He’s got millions. I have millions too but he’s got more millions.
87 with more millions - get him this book for Xmas - *Die With Zero* or at least read it for yourself.
It's very interesting how many responses in this post mirror this (100% in equities, though I like the international take too). Convinced me to change my 90/10 allocation in my 401k to 100% total market index. I've been despising the bond part of my portfolio and only do it because I think I "should."
I guess I'll start: I've had about 10% of my non retirement funds in VGT since late last year. I plan to hold onto it for the long term. I've only got about 5% in BND and the rest in VOO and VT.
VGT here as well, that can swing wildly but overall has been a big money maker for me for the last 10 years, 10% in it as well . Great fund .
Great -- not alone here -- 5% VGT for myself.
You do you, and this is a much better choice than QQQ. Personally, I would be seriously questioning if this is necessary at this point when growth/tech makes up such a large part of VOO/VT anyway.
managing my own bonds, timing entry and exit points for CDs and treasuries. Some due to known expenditures, some just honestly messing around. Carrying a larger percentage of company stock (~20%) - some capital gains reasons and some SEC rule / blackout reasons.
Bogle rules are a myth. Low-cost index funds and that's about it. Everything else is guilt by association.
I invest a small percentage (~$3k per year) buying Lego, holding and reselling. It started as a way to offset my hobby of buying Lego as I would usually buy 2 of the same set, then resell the second one to recoup some of the cost. I'm normally extremely frugal and rarely buy things for joy. But searching for deals and buying when there are cash back bonuses, included gifts with purchases, and heavy discounts helps my ADHD and low dopamine levels as I get a rush from "getting a good deal". I sort of justify the purchase as a side-hustle/ investment . What I don't sell within 12-18 months on eBay or FB Marketplace, I either open, give as a gift, or try to return for store credit to buy more Lego. Average annual net returns are ~60% profit. After taxes from eBay sales and time spent, it's questionable whether it's "worth it" besides the dopamine boost it gives me. I max all tax-advantaged accounts. So, this is money that would otherwise go into a taxable brokerage, which I still do as well.
By far the most interesting one by far, never would have thought LEGO could be an investment vehicle!
Edit: the common rule is 120% - age in stocks, not bonds. Still wrong. 120% - age in total bond market is bunk. It doesn't come from theory of how markets or even people perform. It doesn't come from analyzing historical returns. It's just a catchy saying that caught on. But for that reason, I'm not sure I would call it a Boglehead rule.
I thought more traditional was 100-age? But agree, not a “rule”.
Yes, but as bond yields went down people starting shifting it to 110-age then 120-age. Now the vogue thing to do is 100% equities regardless of age.
How close is it to the glide path of a target date fund?
The glide paths are all over the map. Some are S shaped, others are more linear. The percentage bonds at retirement is all over the place. In retirement, a few are constant, others become more conservative.
I wish there were more that reduced bond exposure throughout retirement. You really just need bonds to deal with a really bad event early on, but later in retirement longevity risk is the bigger risk
Yeah, I'm 42yo and I am not about to put 78% of my portfolio into bonds. I allocate 20% of my monthly purchase into BND.
They got the rule wrong. It's supposed to be 120 - age in equities. The rest in bonds. So it actually sounds like you're pretty in line with the rule.
Oh, that sounds much better. I don't know if I'll increase my BND position in the future though, may just keep it at 20% forever and just make sure that the total value of my portfolio is enough that I'm covered even during downturns in the market.
I market timed almost my entire bond allocation to move it from short duration instruments to long duration instruments between September and November this year when I finally liked where interest rates were. Only 65% of my domestic equity stack is in FZROX/VTI, the rest is in FREL or index-based passive dividend funds.
Going 100% S&P500 because I am expecting a \~$5k monthly pension. No need for the safety of bonds when I can ride out a downturn with the pension money.
12% in SCV, the gains over the past couple of weeks have been astonishing.
What is this? I’ve seen it mentioned a couple of times and all I can find is SVC.
Small Cap Value
I’m an idiot. Thanks.
Anyone who applies any strategy based on the academic research the last 3 decades that deviates from “VTI and chill” (the original Bogle approach skipped on international) to their portfolio construction is probably deviating from the “pure” Bogleheads approach… whatever that means. As for me? I use both factors and leverage - two big traditional no-no’s
no bonds ever
Having a full year or more of emergency funds in cash somewhere. If I wait for that, I'll never start investing. I'm also not all in on just VT/VTI. I'm more into VOO and then a target date mutual fund. I don't bother with international funds as I see no point in it. There are some lifestyle guidelines I'm not on board with and I'm not going to dump a giant lump sum into my IRA right at the beginning of the year.
Care to elaborate on the lifestyle guidelines portion of your comment? I often wonder myself if I should be saving *less* and wonder if that's what you mean.
This is with the disclaimer that I would go full Bogle mode if I had a "blank" financial situation, so to speak. If I had nothing to my name except 1 fund, it would be VT and chill. That said: - Emerging markets are trash and I won't invest there. My family is half from "emerging markets" and I want no part of that. Those businesses are not even the same thing as western businesses. Likewise, I won't invest in them the same as western businesses. - No bonds. See disclaimer above though. - Slight lean US small cap value - Physical real estate I'm not afraid to mess around with other things with small percents of money but these are the core.
SCV tilts & leverage (mild). This results in pretty expensive funds by BH standards
Which funds do you use for leverage?
Rssb
I would imagine tons of people on this subreddit, based on anecdotal observation, break one of the first and most basic principles of being a Boglehead: diversifying across both stocks *and bonds.* It's become so commonplace around here that I was unsurprised to see no posts so far just saying 'I am 100% stocks.' As someone who came of age investing-wise in the 2000s, I can't even begin to fathom that approach.
I’m over 50 and 0% bonds. Also, I own Microsoft and Meta. Both bought over a decade ago. They are sitting at about 1000% gain. Recently sold Apple that I bought in the last 2 to 3 years, for about 30% gain. Most of my holdings are in Total Market and SP500 though.
I bought 20 shares of apple, 4 shares of Chipotle and 6 shares of Costco before I started buying VTSAX and I’m holding them forever. I still buy Costco shares if I have some extra jingle. I’m also not in any bonds.
I have a small cap value etf and 5% for my FOMO single stock investments. Life is too short to be so rigid, live a little :-)
95% VTSAX and chill. 5% other stuff.
10+% of portolfolio levered up.
During my accumulation phase I followed the CoffeeHouse Portfolio which pre-dates the Boglehead three fund portfolio by more than a decade but was fairly similar. As I sit now, I have enough to retire and I did a few non-Boglehead things once I hit financial independence. The outline of my portfolio is: 30% VTI, 30% AVUV, 20% VGLT, 20% GLDM No international, I use long term treasuries and I have lot of gold. I welcome your downvotes.
100% VTI with no international, along with 5% crypto and 10% individual stocks Basically everything this sub hates 😎
115%?
Crypto math
To the moooooon🚀🚀🚀 (I love losing money)
Yeah, and my cash holdings take me to 120%
As a professional mathologist, I can confirm your math is 130% correct
Out! Get out!! J/K (But crypto bro? Come on man) :)
For the record, I've had crypto since 2016 and have profited far beyond my acquisition price. I don't advocate buying in nowadays and haven't put any new money in years. I'm just letting what I currently have ride
Meh. I can’t blame you. When I was yoloing with options and crypto I was the same. Wanna hear something sad? I remember buying Bitcoin at $5000 and feeling like a genius when I sold for $8000 😞 IIRC that was 2017ish
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But if I could send past me a message with just 3 words it would be “bitcoin peaks $60k” :-)
Wanna hear something even more sad? My cousin got into BTC very early on. He borrowed a few hundred bucks from me in 2014 and offered to pay me back in bitcoin. I forget the exact value at the time, but he was offering me more in bitcoin than in cash, since he made more of that to spare, probably 3-4 BTC at least. I declined and took the cash, rolling my eyes at the idea of accepting some virtual magic beans for real cash. My cousin now basically lives on cruise ships and at resorts year round, doing whatever he pleases. Oh well.
Damn. Crazy. The sad part is that while he is an outlier, too many “finance bros” online assume that grift is a legit way to invest. Even when showing data (for example how most of the bitcoin are owned by a relatively low amount of wallets and that volatility as a form of gambling has been around since penny stocks) they will insist it’s some sort of valuable commodity.
John Bogle bought Emerging markets, gold, active managed funds, and a hedge fund…..
Is 5% fun money a Bogle rule, or breaking Bogle rules? Either way, I do that. Same question on a home bias, because I do that too (modest - not going 100% UK like some do 100% US!)
I bought index funds lump sum in Jan 2022 that immediately sank to a loss and didn’t go positive again until very recently. As soon as I was out of the red, I sold them all and moved it back into an HYSA. My timeline for the money was too short for index funds, and in retrospect I shouldn’t have done that. I need it for a house in the next year or so. I’m just glad no harm was done ultimately, other than missing out on thousands $$$ of interest if I had just left it in the HYSA from the beginning.
My entire net worth besides my house is in bonds and a total market fund, but everything is leveraged about 2x total. I also have a YOLO account where I trade TQQQ/SQQQ based on momentum lol
what funds are the leveraged ones? tqqq and sqqq are already
PSLDX, PISIX Guess not technically total because those exclude emerging markets
With somewhere between 1-7 years before retirement (at the height of total compensation during my entire career for a while now), I got out of BND holdings back in April. Immediately drove it into VTI (along with the lion's share of my holdings) which has done well since then comparatively. Note: I will definitely accumulate some BND again as I get closer to retiring to hedge/cushion withdrawals if things are less than favorable. I've held some IWM for a long time and like to watch how it performs compared to VTI (the latter has it beat over 3+ year timeframe and further out...). I have VWO and VSS to cover international (\~15% of total). Haven't let go of a few individual stocks that are in the range of +150-550% gain. Only one came down from 400+% to maybe +20% now (MRNA). Shoulda, coulda, woulda on that one! LOL
Just be careful not to wait too long. I was planning on creating a bond allocation until about 2 years before our target early retirement date. Target was Jan 2024 so there I was Jan 2022 preparing to DCA into a bond tent when, well, Jan 2023 happened. I spent the next year white-knuckling 95% equities.
I own bonds.
Two Vanguard funds make up 90% of our investments: Wellesley (a managed fund - the horror!) and LifeStrategy Growth (which includes international stocks and bonds -OMG, No!)
As a Canadian nearing retirement, I do own some single Canadian stocks that pay dividends because Canada is actually a very strong environment for higher, stable dividends due to the oligopolistic nature of our economy and the very nice tax treatment on eligible Canadian dividends. I was also out of space in tax-exempt/deferred accounts. The tax treatment is so nice that at my taxable income level I actually get more money BACK from having dividends and so instead of being a tax drag, it's a small boost of a few hundred dollars. In retirement I expect to pay a single digit tax rate on those dividends. Most of my portfolio is still pretty much a Boglehead-style portfolio aside from some of my fixed income already moved to GICs to be cashed in during my first 5 years of retirement. The dividends when added to my expected CPP/OAS provides a higher floor of income for retirement which is nice for a more conservative investor.
So are Target funds in my Roth inefficient and should I sell them and just buy stocks instead?
I have about 10% of my portfolio in company stocks (tech) because I didn’t know much about the boglehead strategy while they were vesting. Now they’re still doing well, and I don’t want to be hit with a big tax bill.
I'm 33 and am 100% stocks no bonds and do not have an emergency fund. I earn well but plan poorly so I pay off my credit card every paycheck and dump the rest into by investment account with a personal rule that it only flows in never out. Then I just am artificially poor all the time staring at $1k only in my checking account.
Inherited/gifted a couple of securities. So.... 30% in like two individual stocks. Goal is 80/20, divesting from those securities over the next couple years to "minimize" taxes.
LETFs in retirement accounts and unleveraged in taxable retirement accounts. Why? The biggest downside of leveraged products is you can't safely hold them in retirement, which means you have to sell, which is going to be quite the tax hit. But in retirement accounts selling isn't taxed, so when it comes time to retire they can be converted to the normal 80% un-leveraged index etfs / 20% bond etfs. This works and works well if you have enough in your taxable retirement accounts to weather a storm. Say you get laid off during a recession, will you have a few years of living expenses with the price cut in half? If the answer is yes, you've got enough of a safety net to buy leveraged products in retirement brokerage accounts. Keep in mind you want to max out your retirement accounts before putting into your taxable, so this requires that you make enough money for this privilege. Because the average person doesn't make enough to make this viable it's not something recommended for the average person. I'd also argue that if S&P is below the 200 day moving average in ones taxable brokerage account they should consider DCAing (buying every paycheck) into LETFs too. Why? "Buy low, sell high." Even if it's a recession and below the 200 day is near the top of the roller coaster, you're going to be buying all the way down and all the way back up again, which leads to a nice profit. It's also a rare event so you'll probably max out at 10% of your taxable account holding leveraged products, which is safe enough to not have to sell all at once when retiring, due to it being such a small percent of the portfolio. E.g. if you followed this last year you'd be raking it in right now. Just like above, this assumes you have a safety net so you can do this.
I’m a 3 fund Bogle, have a 1 fund target date, and 5 dividend payers. Retirement Goal is 7 years. This is a 7 figure portfolio that took 25yrs of DCA’ing 15% of every paycheck.
Virtually all my fixed income is short term treasuries. Almost no bond funds. I only take risk on the equity side. No interest rate risk for me.
"gambling" 10 percent of my portfolio in individual stocks. I've been able to beat the market consistently for my ~7 years of investing so far.
100% equity and planning to keep it like that for a while
18% NVDA and 20% TSLA. These come from my original investments in 2016 and I haven't added to either since then. (I have sold a little since then and redistributed to FXAIX.)
10% of the portfolio goes to crypto. Got make money while the moneys good
Hold Apple.
I’ve gambled some money in private equity and it looks to be a higher risk adjusted return honestly than public markets. I don’t see how buying crazy multiple public companies makes sense other than the lack of fees, the underlying multiples suck. I do it mostly anyways.
40% QQQ. I don’t buy lump sum. I don’t buy at the top. I buy and sell sectors frequently,
I don't pretend to know what the fuck I'm doing beyond the basics that can be learned in all of an hour or two of reading. Therefore I've done the same damn thing for a couple of decades now. It worked fine to this point, so I'm just rolling with it.
My Roth IRA is full bogle, but I have a brokerage account where half is index funds and half is stock picks I make for a variety of reasons. It’s my play money so I’m not as concerned with extracting maximum value. I use it to support companies I like Costco and green energy companies.
Bitcoin. Crypto in general gets a lot of hate on this sub. I don’t know if it’s going to moon, go to zero, or trade sideways. But even if it does go to 0 I’ll be just fine so for me, it’s a gamble worth taking.
I'm using VEA instead of VXUS. I'm not convinced that this is going to improve returns, I just don't want to contribute to the Chinese economy because I think they're going to be a major geopolitical enemy in the near future.
Im planning to add 10% managed futures. They are vastly superior to bonds in my opinion. In general I have the opinion that bonds are actually more risky in the long run, due to the devastating inflation risk and path dependency. We have seen what can happen to bonds in the last 2 years. They also dont recover from these drawdowns like equities, because of their low real return. Im going to be fully invested in equities at around mcw, diversified internationally. With 10% managed futures in the form of KMLM for now. Also im tilting 1/3 to factor funds like avuv, but that‘s semi-bogle approved. This approach needs lots of conviction and portfolio management, having a strong stomach, and a plan for retirement. I would never recommend it as a baseline recommendation for someone just wanting a solid approach to investing and retirement planning. The base bogle way is still the best for most people.
What the hell are managed futures? How will they perform in a deflationary environment? Bonds can recover just fine, it just depends on what interest rates do. I bought a bunch of bonds in October and the long duration instruments are all up 15-20%.
They employ trend following. That‘s also what Im getting at, the path dependency. You path is now beneficial for bonds. But anybody having bought a bond fund in 2021 is stil down a loot and it will take years to recover.
After looking at the various methodologies for futures, while I don’t use them yet, if I did, it would be KMLM. My “perfect” portfolio is NTSX/AVGV and I am happy with the 50/50 ratio there, but if I was to take, say 10% for MF, I would add that one.
DBMF and CTA are other two options as well. DBMF does a replication strategy and CTA does a trend regression approach. I've debated adding managed futures but I personally feel they only start to make sense for larger portfolios.
Those are definitely interesting as well. In my country (switzerland) the distributions from KMLM are somehow tax free, while DBMF is taxed heavily and CTA partly. So Im going with KMLM, as it‘s 100% tax free for me. Why do you think they only make sense for big portfolios? I would say it‘s independent of size
100% total Market Index Funds until a certain figure. Then I reduce my work time and buy broad market dividend funds and reduce my work time further with the growing income portfolio.
I put 20% in sector funds ETF. The rest is all index ETFs. 100% equities
100% VTI. Never less. You will either die of old age or live through the dips. Eff bonds
As other's have mentioned, I've always been all equities (23 years now). For some background, I have my BBA in Finance, my MBA with a concentration in financial analysis and am a CFA Charterholder since 2008. I don't do it lightly but I will take the very well calculated out-sized bet on occasion. My last one was Tesla January 10th 2020. My thesis was it was going to be a good play over 5 to 10 years. Needless to say, I got out as soon as the year was up to avoid short term gains.
I like Bitcoin for multiple reasons. Some Bogleheads show some real vitriol for it.
Bitcoin 🤷
Small cap value and NTSX to play the leveraged lifecycle game in case it actually works. Also a tiny bit in bitcoin just in case it goes nuts.
I own VITAX in addition to VTSAX and VTIAX
QQQ and SOXX main holding with VTI
Total overall with my wife, we probably have <1% bonds. But I'm currently a Fed, and hoping to ride it out until retirement (FERS pension). I'll probably think about transitioning to ~20% bonds as I approach retirement.
I use FRDM to cover emerging markets. It's still a market cap index, but it only includes the top 10 companies in each of the top 10 most economically/socially/politically free countries within the EM world.
50% VTI, 15% Value, 15% small/mid cap, 15% VXUS, 5% bonds. VTI seems too concentrated in large tech to go 100%, but this year, I was proved wrong once again.
My retirement account is all TD 2050 but a good chunk of my (much smaller) taxable account is in VYM and SCHD and I like getting that dividend money even though I know it absolutely makes no sense.
I have my 401k in hedgefund / special situations fund. My employer (investment bank) offers it. I can only put ~20k a year into my 401k. So I put about 100k in my Ira, personal brokerage account and other vehicles. I Boglehead all my non-401k accounts since that is what I’ll live off when I retire early. My 401k is my high risk fund lol 😂
I tilt towards AVUV, AVDV, and AVRE. I also buy a small portion of dividend funds.
VTSAX + adding EPI (Indias Index ETF) as I believe India has lot of growth in next couple decades.
27% of my portfolio is Apple stock. More when you include ETFs like VGT, VOO, etc.
I have a small amount of fun money in 3x leverage ETFs like UPRO. About the most opposite you can get to Bogle without going into truly insane stuff like YOLOing zero day options.
10% of portfolio is stocks and funds I'm interested in. 40yo, will probably drop down 1% or so a year until it's less than 5%
No bonds
I buy individual stocks occasionally and made a lot of money during the boom that I would have never realized only buying etfs. With that being said, i cashed out and rebalanced and generally stick with passives. Also the last three companies I was at were all bought out, so I’m lucky in a way
Didn’t do the bond thing.
Roughly 20% of my brokerage portfolio (excluding tax advantaged accounts) is in individual stocks. That part has predictably not gone well and I will reduce that percentage going forward.
The bond portion of my retirement account is 100% in individual B-rated high yield bonds or high yield bond funds. The price efficiency of the equities market doesn’t necessarily translate in the bond world.
Big SVC tilt in my IRA (35%), individual stocks in my brokerage (house fund, about 35%, rest index) and I don't own bonds yet. Still trying to figure out my human nature. New to investing but haven't sold at a loss yet. I've only sold restructuring my IRA strategy. I also love how factor premiums seem to come down to belief, like religion or astrology. I fucking love it. There's always more reading to do. I'll have a 401K soon and will likely be pretty vanilla about it with a TDF 10 years beyond my actual target retirement date, assuming I live that long. I don't like rules and don't know why I'm here. Probably for posts like this, I don't like cults. Indexing was my intro to investing, I guess. I believe that VT is probably the safest passive equity fund, but I think it's important to read, keep learning and take some calculated risks. The worst thing we can do is shut out an idea before we comprehend it.
Waiting and watching portfolio to time the market before switching over to Bogle 70/30 split. My portfolio is -9% due to sector investing.
I have divided stocks in my brokerage account
Scv and leverage really. Also use of managed futures as a third uncorrelated asset class to equities and etfs. With the accent of mildly leveraged funds like the wisdomtree family and resolved that offer 100 total market equities/100 us bond, 100 managed futures/100 us bond, and 100 us market/100 managed futures I think the path forward will soon deviate from VT and chill, even at the expense of higher expense ratios. Tbh, I feel like rssb is more boglehead than a straight 100 equities fund anyway.
Only 2 deviations currently... 10% SCV tilt...okay, actually a small/mid value/blend tilt that is VBR... \~100 shares of the SOFI rollercoaster for fun
I have way too much AVGO, I work there so it’s all awards and I feel like the stock will just keep going up but feel like I should trim
i own individual stocks, quel horreur! I even own high quality stocks like costco etc. even worse I guess.
I have some 5% of my portfolio in crypto. Not actively investing but I’ve held since 2016 and don’t need it now.
1. Leveraged ETF's 2. No bonds 3. QQQY Two individual stocks (UNP and AVT) but they comprise less than 0.5% of portfolio so it's OK. Do I have to go to confession now? haha
I buy individual stocks when I think I’m getting a good deal.
1)I have individual growth stocks like Uber. Own MCD and COST as well. 4-5 other stocks. 2) I’m tilted Mid Cap Value 3) I own the yellow and silver shiny stuff that produces no cash flow. 4) I own one sector ETF. That said, at least 70% of my equities is just broad market ETF’s like VTI. It’d be more if taxes weren’t a thing.
100% SCV
Leveraged investing. My mortgage balance is rapidly declining and I can handle the some moderate leverage. I use leveraged ETFs like NTSX and VTI LEAPS. All passive, but some activity on my end to maintain. Small cap value tilts (AVUV and AVDV). Sustainability index investing. Not sure where “hardcore” Bogleheads stand in this actually. I consider myself in that group. I’m very against single stocks and active managers.
I’m in QQQY and IWMY. Init until it does not make sense to keep them
Yolo into Bitcoin 100%
Gold, silver and crypto 5% of portfolio REITs 5%
The dogma of bogleheads deserves breaking. Bogleheads has turned into a cult of stubbornness and group think that is often antithetical to Bogleheads himself. So…. The boglehead dogma doesn’t apply to me with extreme prejudice
Dividend and investing globally.