The portfolio you presented is certainly reasonable and I see nothing inherently wrong with it. There are thousands, if not millions, of reasonable portfolios and the one you presented falls on that spectrum. Your ability to stick with a plan you're comfortable with is the most important thing. I'm of the opinion that an international component anywhere from 20-50% is reasonable, which your plan has. I have a small-cap value tilt, so I'm a bit biased, but I think your tilt is a reasonable choice as well. I use DFSV. Some other options to consider would be AVUV, VIOV, or DFAT.
I have a couple additional ideas for you to ponder. Neither are necessary and both are just icing or personal flavor. Just a few ideas for you to research and determine if they're right for you.
#1 - Look into I-bonds. You'll have to open an account with Treasury Direct, but if you're thinking about maintaining a small allocation to fixed income for a long time, they have qualities that are beneficial to a stock-heavy portfolio. All of my tax-advantaged money is is stocks and then I use I-bonds on the taxable side to increase my tax-advantaged space (they're tax deferred) and to provide emergency liquidity and rebalancing options. However, a reasonable position of I-bonds does take time to build, but you're young and have time and no one ever said ALL your fixed income has to be in I-bonds.
#2 - A higher international component could allow you to split the international allocation into a broad market fund and an international small cap value fund. However, I'm not sure there's much point in splitting it with a total international component of 20%. An allocation of anything at less than 10% isn't very meaningful.
I have a couple additional ideas for you to ponder. Neither are necessary and both are just icing or personal flavor. Just a few ideas for you to research and determine if they're right for you.
#1 - Look into I-bonds. You'll have to open an account with Treasury Direct, but if you're thinking about maintaining a small allocation to fixed income for a long time, they have qualities that are beneficial to a stock-heavy portfolio. All of my tax-advantaged money is is stocks and then I use I-bonds on the taxable side to increase my tax-advantaged space (they're tax deferred) and to provide emergency liquidity and rebalancing options. However, a reasonable position of I-bonds does take time to build, but you're young and have time and no one ever said ALL your fixed income has to be in I-bonds.
#2 - A higher international component could allow you to split the international allocation into a broad market fund and an international small cap value fund. However, I'm not sure there's much point in splitting it with a total international component of 20%. An allocation of anything at less than 10% isn't very meaningful.
Statistics: Posted by Invest Quietly — Sat Feb 08, 2025 10:56 pm — Replies 5 — Views 340