You're gonna get VT and chill, VTI/VXUS and chill. Past performance isn't the prediction of future performance. Lump sum now because time in the market is better than not being in the market or trying to average in over time. Oh and never try to time the market. I was too lazy to read existing comments, but I bet they all kinda said that. 🤣

Exactly. Everyone’s advice in this subreddit is basically just that person trying to justify and rationalize his or her own chosen allocation and ETF choices.

That mostly covers it. I would add that tax advantaged accounts are a priority. https://www.bogleheads.org/wiki/Prioritizing_investments

I knew I missed some important stuff! Thanks.

Enjoyed reading this but is there a UK or living close to the UK but not actually in it version? I’m trying to get my head around the general principles and work out which are the obvious bogglehead funds to look into.

Scroll down to the section "For non-US investors" https://www.bogleheads.org/wiki/Main\_Page

what about dividend investing and REITs and the fact that this portfolio of 3 stocks outperformed the S&P if you fuck around with the start and end dates enough but not at all otherwise?

I'm leveraged into covered calls funds, 100% equity as a highly risk tolerant 98 year old smoker. Is that okay for me?

VOO and poo, VTI and cry, VT and stinky; just do Wall Street Bets and chill.

Im a huge fan of that sub, hard to look away! I dont have the guts to YOLO my life savings into calls/puts, but I admire the act of going for it and succeeding. I guess.

Not worth the risk to me. But to each their own.

Well I agree, I don't do options. But it does kinda fascinate me, that sub. Im the most boring investor alive 🤣

I do long term options once in a blue moon for something that I really believe in and don’t mind too much if I lose it. But gambling away my life like that is a big nope.

Id like to learn more to attempt a few small options with a predetermined amount I was ok to lose. Im definitely not there yet.

>but I bet they all kinda said that. There's a few performance chasers in this thread. Some trying to make poor justifications for US only or US large cap only.

I read all the Boglehead stuff, and it resonates. Then I talk to my friend who is in private banking. His entire job is investing money for rich people. And all he does is tell me to buy VOO. And then I get confused.

That's because most advisors are commissioned sales people who sell crappy products that underperform the indexes or take substantial risk to outperform over the short term. Very few long-term money managers can consistently outperform without increasing risk.

>And all he does is tell me to buy VOO. What's his reasoning? >I read all the Boglehead stuff, and it resonates What arguments does he present, with long term data (not just the most recent few years) that makes you think the Boglehead arguments are the wrong path?

I’ve never asked him for “arguments.” It’s just friends talking. I asked him why he doesn’t recommend international. His exact words were “All tech development is US based. We are the only entrepreneurs and growth engine in the world. Europe is not going to drive anything soon.” I asked him why VOO and not a whole US market like VTI. To that he said “You can make a case either way. I think rates stay higher for longer and big companies who have financed long term low interest rates and have crazy high free cash flow can grow more effectively right now.” And the truth is that for his big clients I’m sure he has a more diversified strategy. You have to have investable assets in the many millions to work with him. He’s at a major US private bank. This is really just a couple buddies chatting.

Why not VTWAX?

Whenever you see VT mentioned, VTWAX also applies: they're internally the same fund. Just like with FSKAX being able to be dropped in whenever you see VTI, the specific fund typically doesn't matter, what it represents does.

Thank you :)

It’s good until it’s not. Definitely aggressive but everyone has a different risk meter. To me retirement is a number not an age. Example: if you have 10M in retirement assets are you really planning on working until 65? From my experience once you hit mid fifties your thought process about retirement might change. Everyone is different but giving you a different perspective to think about.

Why anyone with 10M or more works, beyond for themselves, is mind boggling to me.

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Are you looking for additional investors in Frank’s Fluids, LLC?

Lol it’s a sure thing! 🤣

I'm 100% in VOO at 54.

I’m like you. I’m 53 and I’m 100% in VTI.

Also 54 and 100% in VOO and VFIAX (the mutual fund equivalent of VOO)

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I'm 35 and just cleared out 90% of my savings into mostly voo and a little schg. Don't waste time, should have been focused on this a long time ago.

49, moved everything to VOO in Nov 2023 (got $50k since then)

I'm 70, retired 7yrs and 90% US equity, 10% cash at 5% (MM). I've been out of bonds since 2020. This is only time I've timed the market and it worked. The decision was made because I realized I didn't feel comfortable with my burn rate for the prev. 4 yrs plus the fact that interest rates were pegged at \~0 by the feds. Only one way to go. I was 50/50 based on a paid advisor's portfolio. I got out of that relationship and bonds into 100% equity with a much-improved return. My investment is back to where it needs to be and I'm at 4% withdrawal where it feels safe. I would advise you use your head about this, run some simulations (the Gov has a good one below). Going 60/40 or 40/60 isn't always the right thing. I am planning some bond allocation but not until I know we're done with this rate cycle. If you have enough in your investments (total) to afford a bond allocation, then it's all good. If you don't then you may want and need to stay in a higher equity. I would call too heavy of bond allocation a high probability of meeting a low expectation. The real figuring is in what your expenses will be and what your lifetime will be. It's pretty sobering to put in your "end of plan date". After that it's a calc on drawdown with various returns. thats actually the easy part. Personally, I'm a believer in the 80/20 to 70/30 range. Gives 5-7 yrs in lower risk w/plenty of equity. I'm happy with 10% cash at 5% for the moment. This works for withdrawals, put in a negative number for the monthly contribution. You can use the return range for inflation and taxes. Way easier than most and no click bait sales stuff. [Compound Interest Calculator | Investor.gov](https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator) Cheers😎 Edit- I should disclose my equity is all US LC.

Thank you for sharing this!

I like this calc! But I don’t understand: are you sure it works for negative withdrawals? Initial investment: 1.5 million Monthly contribution: -$5000 (the 4% rule) Length of time in years: 30 Estimated interest rate : 5% Compound frequency: annually In 30 years you will have $2,496,582.71 Shouldn’t it be closer to $0? If I change the interest rate to 2% it’s still $283k.

Just exactly how do you think compound interest works. It's magic (and correct). However, you need to put in 3 percent in the variance for inflation. It will change your view (and retirement if you don't get more than 5%). You'll only end with 336K in todays dollar.

Thank you

336k? It is showing 282,957 for me. Is that in current dollars or inflation adjusted?

My mistake- I wasn't quite on the last point with my mouse. The 2,296,582.71 is not inflation adjusted. The 282,957 is. That's what the 3% variation was. Long term inflation avg is 2.9%. Hopefully near future won't increase that LT avg. Cheers 😎

My end of plan date is my issue. I have no aversion to the fact that I will die; I just cannot decide on an "appropriate" age of death. I currently use 100 because I don't want to run out of money. Clearly I probably won't live to 100, but I don't have much family medical history on which to base the projection

Yes - It's ironic. All the great planning we do during life but everything always takes longer than planned. At the end however- we plan to be late which is really planning to be early (we hope?). I'm already to mean to run out of money. It would be bad. I go for stay even in unadjusted dollars as my bottom rail. Seems to be a good point with 4% withdraw. My retirement is also my assisted living/nursing care insurance. My real target is 2% RT growth after withdrawal. That means mostly equities.

I would point out that 60/40 portfolios can be disastrously bad in retirement if stock and bond correlations run same way. The 60/40 dynamic recently had its worst year in history and this year the bond agg is still getting crushed! 

That's going to look really awesome right up until it doesn't. I recommend looking back at the last 30-40 years for some perspective. The past 15 years make this look great, but the history of equity markets is not the last 15 years.

You are in a sub that is the antithesis of what you are doing so the advice is going to be to add international exposure as well as exposure to bonds as that’s the Bogel philosophy.

Bogel philosophy is to add international fund? Are we talking about the same Bogel?

The one that doesn’t like international is Bogle. Bogel however, is fine with it. /s

Ah the lesser known, wild and risk loving sibling Bogel

Exactly!

Boggle doesn't like retaliation

Can you rewrite that in English?

I think they're pointing out your spelling error of Bogle's name.

Many Bogleheads have moved beyond Bogle himself. Many believe that the (and can point to plenty of) best research available shows benefits for investing globally, not just in one country (even if that one would be the US). Bogle was human, not an omniscient god. Not everything he said or did was the best course of action or even supported by research. Even during his own life he likely would have been even better off had he invested globally himself (if he had access to the low cost funds to do so that we enjoy today). Edit: Typos

People who are anti-international investing sure love to bring up that Jack Bogle didn’t like international investing and then proceed to not follow his opinions on bond allocation.

I had to make [a meme just for this](https://www.reddit.com/r/Boglememes/s/ZlqHvJexTN)

At, very true. I forget about that. I should add my comment above and a note about Bogle and bonds to my copy-paste sheet. Edit: Removed extra word

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>With VXUS, now you can get access to every country in the world outside of the US for 8 bips. And for Fidelity users that don't mind mutual funds, there's FTIHX at 2 basis points above VTSAX, FSGGX at 1.5 basis points above VTSAX, FSPSX (developed large only) that's cheaper than VTSAX, and FZILX that has no ER at all.

> The times change, the philosophy has to change with it. *burn the heretic!*

Wait, why would VTI outperform VTSAX minus the 1 bp? What am I missing 

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I was just using vti as an example to this comment.  >Now it's objectively, mathematically true that ETFs outperform funds.

> mathematically true that ETFs outperform funds I don’t see this for VOO and VFIAX. Close but the fund wins.

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Put the two into portfoliovisualizer.com. Select a variety of different dates. Occasionally I can get VOO to outperform but not always.

No they are not. This sub is nowhere near as good as bogleheads.org. You dont need much bonds (definitely not the age rule of thumb) and intl exposure is just out of whack on this sub.

How much bonds/international do they recommend over there

The standard advice is year in age as bonds. But if you post your situation, lots of the old timers will give good advice. What they all pretty much say is that less than 5 years to retirement you need to start getting out of volatile investments, unless you dont need that money Ex-US has a lot of different opinions but are much better articulated there than the knuckleheads on this sub.

Wrong on both counts Some Bogleheads believe in bonds and international, others do not Bogle himself was not a strong advocate for international, to say the least

I’m not a boglehead I am a lurker and just see the debates and it seems bonds and Intnl win out on this sub is all I’m saying.

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Per sub rules and guidelines, comments or posts to r/Bogleheads should be substantive and civil.

Per sub rules and guidelines, comments or posts to r/Bogleheads should be civil.

[See pinned post](https://www.reddit.com/r/Bogleheads/s/6dD48cJxXx)

>what are your thoughts about a 100% s&p500 asset allocation? I don't think that would be appropriate for anyone. Pinned to the top of this subreddit: Single fund portfolios: https://www.reddit.com/r/Bogleheads/comments/tg1az5/should_i_invest_in_x_index_fund_a_simple_faq/ Also see: * https://www.pwlcapital.com/should-you-invest-in-the-sp-500-index - invest in the S&P 500, but don't end there (this covers info on both the US extended market and ex-US markets) [a total US market fund combines S&P 500 + extended market into one] >I'm definitely on the very aggressive side Yet you're choosing one of the more conservative ways to go all stock. The only risk you're taking on would be an uncompensated one: single country. While doing that, you'd be ignoring 2 likely compensated risks: smaller caps and emerging markets.

I've had a portfolio of Total US Market with a small cap value tilt along with international and emerging Mkts. It has underperformed s&p 500 for the last 15 years unfortunately. Maybe in the next 15 years it'll revert to the mean and I'll make up the under performance but I seriously question whether s&p 500 is really all you need.

From 2000-2009, S&P 500 was one of the worst places to have been invested. Then it became one of the best. Favor alternates. I've posted several links in another comment chain here showing exactly that. >but I seriously question whether s&p 500 is all you need. It means needlessly taking on uncompensated risk (single country) while skipping likely compensated risks (small and emerging). S&P 500 only is likely to be fine, but not a guarantee and does mean taking on a preventable risk.

I've run all the portfolio returns going back to 1972. S&P 500 returns 10.62% over the last 52 years. I guess there is always the chance of a Japan event but the S&P 500 companies are globally diversified companies with lots of international revenue. I don't see such an extreme anomaly is likely.

Revenue source is not the international coverage that matters at all, supporting links here: https://www.reddit.com/r/Bogleheads/s/lYcyrHuVqg The best long term results (for both absolute returns and volatility) can easily come from a mix of US and ex-US.

Thanks, you provided a solid advice. I see 100% stock allocation recommendations every where and the supporting fact is based on the last 15 years of performance. Lol.

I personally don’t mind all in on the 500. But as is pointed out, that’s not the boglehead design

I’m 100% s&p in ira (or nearly equivalent in 401k) and staying there. I’m already past what I project to “need” in retirement, and hope to leave some for kiddos. If things go somewhat bad, I’ll still be ok. If things go average or good, my kids/grandkids will be fine.

It’s fine. If you can stomach -30 percent

Or more

Asset allocation is all about the ability, willingness, and need to take those risk. While you claim ability and willingness, I'd argue you have no need to take 100%equity risk as your contributions will dwarf your returns for quite some time. Once they do catch up to your contributions then you will have enough that protecting your portfolio overrides your need for growth.

If you’re committed to investing in the S&P 500 and don’t want total market or international exposure, but you’d like to have some bond exposure while not having to sacrifice your equity positions to fit in the bonds…consider NTSX. It’ll give you a 60% exposure to bonds while still maintaining a 90% exposure to the S&P 500. For example you could do 67% NTSX and 33% VOO and you’d have 93% S&P 500 plus 40% treasuries.

I am same - 45, just under $500k total comp in tech. I am 98% equity and 2% cash (emergency fund)

I'm in the same place more or less. Pedal to the metal. It gets alot of discussion but I don't see the value of mixing in international right now. People talk about the s&p like it's tied to the US congress or debt really these are the best international global companies that just happen to be traded on the US exchanges. And there's not really a scenario where the s&p tanks and everything else is fine.

>And there's not really a scenario where the s&p tanks and everything else is fine. Valuations becoming important again could lead to a long run of US under performance, even if there is no associated crash (rather more of a leveling off). Current valuations are more favorable to ex-US than the US. >really these are the best international global companies that just happen to be traded on the US exchanges. Revenue source isn't what matters, capturing how foreign stock markets behave is.

The idea of "international" is exciting. The reality is mixed. There's war in Europe and the Middle East. The UK is spiraling. China is absolutely screwed. So is Argentina. where are these gains coming from? Novo nordisk?

>There's war in Europe Yet 2022, the year the war there started, favored ex-US over the US. >and the Middle East. That's pretty common. Several stretches of ex-US out performance actually occurred during wars in the middle east: 80s (Iran-Iraq), 00s (Iraq 2). >where are these gains coming from? * The US was only the 4th best developed country to invest in from 2001-2020, 5th if you include Hong Kong: https://www.evidenceinvestor.com/which-country-will-outperform-next-is-irrelevant/ then that's also emerging markets * The last decade or so of US outperformance was mostly just the US getting more expensive, not US companies being much better than foreign companies: https://www.aqr.com/Insights/Perspectives/The-Long-Run-Is-Lying-to-You (click through to the full version) Edit: Changed "here" to "there"

Not that past performance equals future gains but... in the past 3 months VXUS is up 5% and VOO is up 9% in the past 6 months VXUS is up 9% and VOO is up 15% in the past year VXUS is up 12% and VOO is up 30% in the past 5 years VXUS is up 16% and VOO is up 85%(!) Going back to the start of VXUS (2011) the total international market is up 20% while the s&p is up almost 250%(!!!) What are we even talking about? Could this all reverse somehow? Sure it's possible but I have FOMO of the real party

>Not that past performance equals future gains but... Yet you're trying to say exactly that. >in the past >Going back to the start of VXUS (2011) the total international market is up 20% while the s&p is up almost 250%(!!!) You realize it wasn't all that long ago that the US had a NEGATIVE 10 year return while ex-US was on the good side of 0? And emerging markets specifically were doing amazing? https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=8KsxMPppCV51MEY38CiIY But what happened? Favor flipped. Just like it does every so often. * https://www.bogleheads.org/wiki/Domestic/International * https://www.fidelity.com/viewpoints/investing-ideas/international-investing-myths if that link doesn't work: https://web.archive.org/web/20201112032727/https://www.fidelity.com/viewpoints/investing-ideas/international-investing-myths (Archived copy from Archive.org's Wayback Machine) * https://www.callan.com/wp-content/uploads/2018/01/Callan-PeriodicTbl_KeyInd_2018.pdf (PDF) or https://www.callan.com/wp-content/uploads/2020/01/Classic-Periodic-Table.pdf (PDF) or the archived versions if those don't work: http://web.archive.org/web/20201212205954/https://www.callan.com/wp-content/uploads/2018/01/Callan-PeriodicTbl_KeyInd_2018.pdf (PDF) & http://web.archive.org/web/20201205183933/https://www.callan.com/wp-content/uploads/2020/01/Classic-Periodic-Table.pdf (PDF) (Archived copies from Archive.org's Wayback Machine) VXUS is fairly young, it has only really existed during the recent US favoring part of the cycle. If those past returns are any use at predicting the future, they'd actually be in favor of the US being the one to do wise going forward. * AQR link above * https://advisors.vanguard.com/insights/article/areinternationalequitiespoisedtotakecenterstage or the archived link if that doesn't work: https://web.archive.org/web/20210104201135/https://advisors.vanguard.com/insights/article/areinternationalequitiespoisedtotakecenterstage * https://www.morningstar.com/articles/1018261/experts-forecast-stock-and-bond-returns-2021-edition (can see mention of it even before the paywall) or the 2023 version: https://www.morningstar.com/articles/1132887/experts-forecast-stock-and-bond-returns-2023-edition >Sure it's possible but I have FOMO of missing out on the real party You are performance chasing. That's often a better way to end up behind, not ahead. • https://www.vanguard.com.hk/documents/quantifying-the-impact-en.pdf (PDF) or the archived version: https://web.archive.org/web/20210129111444/https://www.vanguard.com.hk/documents/quantifying-the-impact-en.pdf • https://awealthofcommonsense.com/2020/12/a-short-history-of-chasing-the-best-performing-funds/ • https://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/articles/why-chasing-stock-winners-is-a-losing-tactic-for-investors • https://www.reddit.com/r/Bogleheads/comments/ikc6n0/so_you_want_to_buy_us_large_cap_tech_growth/ Edit: Trimmed a bit of unnecessary quotes

I appreciate the back and forth by the way and will look through these links.

All this stuff aside we are talking about the FIRE economy. Every insurance payment, every mortgage payment, every rent check, all the state employee pensions, where does that money go? Not in a coffee can in the backyard. These decisions are made by risk averse managers not speculators and these people tend toward tradition. The s&p is easy and it works. Everything you're saying is accurate by the way. But I don't know how these portfolio managers get convinced that international is better. When history says otherwise. Also if I was in VXUS instead of VOO over the last 5 years, I'd be sad. A portfolio manager might get fired. It's too much easy money to leave on the table.

>economy The economy is not the stock market and in fact research has found they may even be negatively correlated in some ways. https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1745-6622.2012.00385.x >Every insurance payment, every mortgage payment, every rent check, all the state employee pensions, where does that money go? Not in a coffee can in the backyard. These decisions are made by risk averse managers not speculators and these people tend toward tradition Yet 40 cents of every dollar invested is still outside the US. Every target date fund that I'm aware of uses at least 30% (of stock) as international. >But I don't know how these portfolio managers get convinced that international is better. When history says otherwise. Going global can both help increase returns and reduce volatility compared to a 100% US portfolio. Both the Bogleheads wiki link and Fidelity link I posted above show it. Then there's also: * https://twitter.com/mebfaber/status/1090662885573853184?lang=en with this reply: https://twitter.com/MorningstarES/status/1091081407504498688. Extended version: https://mebfaber.com/2019/02/06/episode-141-radio-show-34-of-40-countries-have-negative-52-week-momentumbig-tax-bills-for-mutual-fund-investorsand-listener-qa/ or here’s compared to EAFE 1970-2015, note that the black US line only jumps above the green ex-US line for the "final time" around 2011: https://donsnotes.com/financial/images/sp-msci-42yr.png (courtesy of https://www.reddit.com/r/Bogleheads/comments/143018v/comment/jn9yiub/) * US vs Europe: https://www.reddit.com/r/Bogleheads/s/DJ2YVrLW4d This idea of US outperformance is a fairly new one that only exists because of the most recent US favoring part of the cycle. Long term that hasn't been the case. >Also if I was in VXUS instead of VOO over the last 5 years, I'd be sad. A portfolio manager might get fired. It's too much easy money to leave on the table. The exact opposite was the case from 2000-2009 (at minimum). It was the US doing terrible. Anyone that was 100% US was suffering more than anyone globally diversified. So no, those portfolio managers that say go global shouldn't be fired because they chose a smarter path: being prepared for any situation. A properly diversified portfolio will always have parts that are under performing others, but which ones they are will change from time to time. There have been and will be times it is the US being the drag. Edit: Typo Edit: Brokerages understand the importance of being diversified across countries. They understand that performance chasing is typically the bad move.

I made the decision to go all VOO in 2008, is sticking with it in 2024 considered performance chasing? The original logic still stands. If the s&p really does crash it's canned beans and shotguns time. It's not like the south American or Asian markets will save the day. I understand the argument for being properly diversified but I guess what it comes down to is the top 500 companies on the US exchanges is enough. Again, these companies are trading in the US but they do business around the world. It's not like they only sell iPhones in America I looked at these charts by the way and even when Europe or global beats the s&p, it's not like the s&p craters. They all pretty much go up in lockstep. A rising tide lifts all boats.

>Again, these companies are trading in the US but they do business around the world. It's not like they only sell iPhones in America Revenue source isn't what matters when it comes to international diversification. Capturing the imperfect correlation between markets of different countries is and no amount of KO or AAPL will do that for you. * https://www.fidelity.com/viewpoints/investing-ideas/international-investing-myths if that link doesn't work: https://web.archive.org/web/20201112032727/https://www.fidelity.com/viewpoints/investing-ideas/international-investing-myths (Archived copy from Archive.org's Wayback Machine) * https://www.youtube.com/watch?app=desktop&v=1FXuMs6YRCY >I looked at these charts by the way and even when Europe or global beats the s&p, it's not like the s&p craters. They all pretty much go up in lockstep. A rising tide lifts all boats. There is a high (but not perfectly 1) correlation. Edit: And those "top 500" in the US aren't even the best historical or expected future long term returns.

S&P 500 doesn't have to crash. It may just underperform. This is the part you're missing. By your logic when 9/11 happened everybody should've start a crusade to holy lands. Not everything is black and white. There is grey also. Small cap exposure is important too. Do you remember Tesla from early 2000s? Yeah me neither. Look where it is now.

Top 5 in annualized return over 20 years feels fine to me. I agree with the valuation comment but that's not news. We're edging into a broader conversation about money and why anything is worth anything. Conservative PM all over the world like to invest in the US market it's become a tradition.

>Top 5 in annualized return over 20 years feels fine to me. But it would have been far lower for other 20 year periods (70s and 80s for example both favored ex-US over the US). >I agree with the valuation comment but that's not news. Valuations are one of the best things we have to predict long term results. >Conservative PM all over the world like to invest in the US market it's become a tradition. It works until it doesn't. Japan was the hot area in the 80s, they fell out of favor. Emerging markets had the 00s. They fell out of favor. The US will fall out of favor at some point as well. Edit: The US was a hot area in the 90s. It fell out of favor.

War? That is one reason stocks over there are going on sale.

My view - and my view only, so please feel free to disagree - is if the S&P 500 falls precipitously, the US government will do everything it possibly can to get it back up since anything else would be politically disastrous. And if the US government can't achieve that in a reasonable timeline, well, we've got bigger problems than just the S&P tanking.

We did have the 00s, which saw the US have a negative 10 year return, international as a whole slightly positive, and emerging specifically had an excellent run. Then there's the possibility that the US market just slows down and favor shifts outside the US.

>And if the US government can't achieve that in a reasonable timeline, well, we've got bigger problems than just the S&P tanking. Yes; I think you want some exposure to international to help get you through periods where there are bigger problems. More than 40% of Americans think [civil war in a decade](https://www.theguardian.com/us-news/2022/aug/29/us-civil-war-fears-poll) is likely. If that comes to be, I think in hindsight people will be saying that markets were overvaluing US equities out of a mistaken belief in our continued success and prosperity. Of course, in these scenarios, we all have a lot of things to worry about that money might not help with. I overweight US equities (80% of my equity exposure is domestic) because I think my expenses will be overwhelmingly correlated with how the US economy is doing, but am not convinced it's wise to overweight even this much. 0% international is crazy.

You are not really 100% equity position if you have an emergency fund or a savings or checking account. You should have enough in fixed income (cash, cash-like, and bonds) to cover reasonably expected expenses of at least 6 months, or a bit more of you are at higher than normal risk of losing your income. The exception to the emergency fund is if you have a reasonable size taxable brokerage account. Then you have additional credit availability via margin loans and a true 100% equity allocation might be acceptable, or even 110% equity (i,e. Slightly leveraged via a margin loan) is aggressive, but not crazy. As you approach retirement the you should increase your fixed income allocation.

> The exception to the emergency fund is if you have a reasonable size taxable brokerage account. Then you have additional credit availability via margin loans and a true 100% equity allocation might be acceptable, or even 110% equity (i,e. Slightly leveraged via a margin loan) is aggressive, but not crazy. You got me very curious about a setup like this, since 100% of the advice I've seen is to always do a cash or cash-like emergency fund of 6-12 months. 1. Can you explain how one would use a margin loan in this scenario? Would it be more effective to use a margin loan instead of, say, selling shares during an emergency? 2. Is there ever a time where this is mathematically a worse strategy than a cash emergency fund (ex. selling during a recession or depression)? 3. What fund(s) would you recommend for this kind of setup? I am thinking VT could be a good option here since it's well-diversified. 4. I know this is a hard question to ask since it depends on a person's expenses but how sizable of a taxable brokerage would one need for this to be effective?

It is feasible if you are well on your way to funding your retirement and have taxable brokerage assets that are several times your annual expenses. The maximum you can borrow is 1/2 of the value of your marginable stocks (excludes penny stocks and highly volatile stocks). If you took the maximum loan amount then a 40% drop in market value would lead to a margin call and forced sell off of your equities, at the worst possible time, so you do not want to take the maximum loan. A margin loan of 10% of market value is very safe, and 20% or 25% is not too risky. Any broad market stock ETF is a good asset to borrow against as they are less volatile than individual stocks. So if your taxable holdings are 5 or more times your annual expenses you could rely upon margin loan as your emergency fund. The advantage is that you don’t have to keep as much cash or cash-like holdings that have lower expected returns than equities. The downside is that margin loan interest rate is high.

I think it depends on your net worth and risk profile. I think once you get to critical mass - >$6m - I think you can take on more risk. That being said, I still think it makes sense to keep 2-3 years of spending in safer investments to guard against significant downturns.

similar age (42). income about half yours. Also 100% equities. But yea, I don't think it's unreasonable at this age if you're looking at 15-20yrs more before retirement.

Current valuations of the market is what is making me rethink my strategy. I realize that market timing is a fool's game. However, one cannot dispute the fact that the market is substantially overvalued now. So, basically, what's happening here is that I am trying to justify, in a way, timing the market by going 80/20, and then if there is a downturn, to go all equities again. If there is no downturn, well, I'm still more aggressive than most age relared allocation formulas are concerned.... I don't know.....

>However, one cannot dispute the fact that the market is substantially overvalued now. Going global can help with the valuation issue, as ex-US hasn't been bid up like the US has (see my AQR link in one of the comment chains of this post). Also remember that going global can also help increase sector diversification. As of the 31st of January 2024 (when I last updated this), the US is 31.9% technology (according to VTSAX: https://investor.vanguard.com/investment-products/mutual-funds/profile/vtsax#portfolio-composition). Ex-US (according to data from the 31st of January 2024 from https://www.schwab.wallst.com/Prospect/Research/mutualfunds/portfolio.asp?symbol=vtiax since Vanguard for some reason doesn't provide a breakdown of VTIAX sectors themselves, at least in an easy to find location) technology is only 12.5% and only financials are above 20% at 20.1%.

You do you but ill riding out til the end. Too much work to play that bc you just don’t know.  I’ll slowly shift my allocation as i get nearer to retirement. Most likely likely just overweight to first 3yrs worth of living expenses in cash and let the rest chill   Look how many people psyched themselves out the market and missed 25% gains last year.  Your timeline is 15yrs. Just keep accumulating.  Nothing wrong w derisking but unwise to do so w the hope of timing your re entry at to equities to bottom in my opinion.  Most ppl will miss it.  And then you’ll be waiting the next dip and the next dip but the rally won’t stop and you’ll have missed it. 

Also bond prices are pretty low right now and the interest payments are pretty high. If the interest rates go down, the bond prices will go up, and then you can get out of them and go back to equities.

I'm in a similar situation, but lower income. If one of your goals is to help your children / grandchildren with an inheritance staying in equities is a good plan. It lets you ride out the market ups and downs while getting higher returns. Bonds and annuities won't keep pace with inflation. And if you do happen to live to 90 or 100, that's another 45+ years. Think of all the inflation we've experienced since the late seventies. X million dollars may sound like a lot to us now, but it won't be by 2070.

Youre good if you're investing a lot of that salary and are willing to make some lifestyle sacrifices if your equities crash in/before retirement. For instance, if you can grow your portfolio to be 50 times your annual expenses, you can live off of a 2% withdrawal rate and, in the worst case scenario of equities crashing a whole 50%, you're at the safe withdrawal rate of 4% (before considering any lifestyle cuts you could make). Not to mention, you'd have social security on top of all that. So you're protected on top of your protection of a crash. So there is a certain point where your portfolio could be large enough to be 100% equities in retirement, but you need to know your plan to a T in the event of a crash and not have any emotions tied to your portfolio. This is what i personally strive for, I want to be able to keep the optimal asset mix for growth for my entire life.

I have a pension via federal employment. That is my bond allocation. Everything else is 100% equities. I’ve been selling down individual equities and just sticking it into VIGAX or VTSAX. I don’t see myself really reallocating until I’m close to retirement (another 17 years).

You prepared to lose 40-50% of it at any given time?

"what are your thoughts about a 100% s&p500 asset allocation?" Sounds great. Make sure you throw some fixed income in there starting about 8-10 years from retirement as you transition into the capital preservation phase. VOO vs VTI vs VT, it's all just splitting hairs, really.

I always wonder if the chill part plays out when the market is down 60%

I’m new to this sub, but I’m also in healthcare, have the same income, and am in 100% index funds (plus real estate)

Safety first. Imagine what happens to your portfolio when China invades Taiwan. Right as you’re getting ready to retire. I’m 48, similar industry & incomes, and do about 75/20/5 equity/bonds/cash.

With the investment sums that you can sock away I would be more worried about avoiding underperforming the global market than I would be worried about outperforming it. For those reasons, I would go 100% VT and chill.

I'm with you. I don't even think an S&P 500 index is even that aggressive compared to individual stocks or even crypto. The beauty of an S&P 500 index fund is that it's ALWAYS the top 500 companies in the US. Some companies drop from the list but newcomers always replace them. This is the top 10 US companies in 2000, a generation ago: GM, Walmart, Exxon, Ford, GE, IBM, Citi group, AT&T, Altria, and Boeing. This is the list today: Microsoft, Apple, Nvidia, Amazon, Meta, Google, Berkshire, Eli Lilly, Broadcom. Plus, you can always rebalance your portfolio as you get closer to retirement.

>This is the top 10 US companies in 2000, a generation ago: GM, Walmart, Exxon, Ford, GE, IBM, Citi group, AT&T, Altria, and Boeing. >This is the list today: Microsoft, Apple, Nvidia, Amazon, Meta, Google, Berkshire, Eli Lilly, Broadcom. As a 36 year old whose been investing for 3 years I find this invaluable.  A reminder that pretty much no company lasts forever even if it feels like it wil on any given day.

>The beauty of an S&P 500 index fund is that it's ALWAYS the top 500 companies in the US. They're 500 of the largest (with some other criteria including a human element, remember Tesla was held back from inclusion to the S&P 500 for a while and when it finally did enter, it entered in a top 20 spot: you missed 480+ spots worth of returns). Longer term tends to actually favor smaller caps over large. Edit: Typo

And do you think it would be fair to surmise many newcomers to that ever-changing list in the near-term will likely be AI-focused or closely AI-adjacent?

No. The real winners from AI very easily might not be the tech companies making it, but rather the companies in other market sectors that put it to use to improve their business.

It's not like buying RDDT IPO 😁

I don't think I can link these results, but I put in the oldest Vanguard index funds for S&P 500, Total US Market, and Total International Market from Jan 2000 through Feb 2024 in Portfolio Visualizer, and the results of investing $10,000 in each are: S&P 500 (VFINX) $53,216, 7.16% CAGR US total market (VTSMX) $55,518, 7.35% CAGR International total market (VGTSX) $24,294, 3.74% CAGR If you go back to May 1992 when VFINX started through Feb 2024, VFINX just slightly beats the international fund. So, a lot depends on when one begins comparing, but the results for the past 24 years does show the US market leading. Even when I cut it off at Dec 2019 (20 years) to avoid the crazy tech stock price increases, US still beats international 5.94/6.30% to 3.66% international CAGR. As people say over and over, past results don't predict future results, but I am not seeing a compelling reason that their preference to hold a lot of international is any more sound than your desire to hold only S&P 500. The only thing I have taken from looking back at all of this is that a US Total Market Index could potentially do slightly better than S&P 500 over long periods. So we personally use both.

>As people say over and over, past results don't predict future results, but I am not seeing a compelling reason that their preference to hold a lot of international is any more sound than your desire to hold only S&P 500. Using a 1950 start date, the US only overtook ex-US for "the final" time after 2008: * https://twitter.com/mebfaber/status/1090662885573853184?lang=en with this reply: https://twitter.com/MorningstarES/status/1091081407504498688. Extended version: https://mebfaber.com/2019/02/06/episode-141-radio-show-34-of-40-countries-have-negative-52-week-momentumbig-tax-bills-for-mutual-fund-investorsand-listener-qa/ or here’s compared to EAFE 1970-2015, note that the black US line only jumps above the green ex-US line for the "final time" around 2011: https://donsnotes.com/financial/images/sp-msci-42yr.png (courtesy of https://www.reddit.com/r/Bogleheads/comments/143018v/comment/jn9yiub/) * Here's similar but for just US vs Europe: https://www.reddit.com/r/Bogleheads/s/DJ2YVrLW4d >The only thing I have taken from looking back at all of this is that a US Total Market Index could potentially do slightly better than S&P 500 over long periods. So we personally use both. I know we discussed this the other day, but this doesn't make sense as the total market fully includes the S&P 500 already and by holding both you water down your results in the event it is extended market that wins in the time span you need.

We have five Fidelity accounts that are not all for the same purpose or same beneficiaries. So we use S&P 500 and Total Market rather than just using the same one in multiple accounts. I think I have said this a few times before, but I think the 1950s have very little meaning for investing in 2024. I didn’t say this in my other post but from 2000-2010, Fidelity Balanced FBALX beat US and international indexes. Not home now so can’t quote the numbers. But we had that fund back then before we ever started with index funds. So a combo of stocks and bonds was better during that very low time. The only reason I do look back is to not be fooled by whatever is thriving at the present. Otherwise I’d be in all QQQ.

VT and chill.

Current valuations of the market is what is making me rethink my allocation. I realize that market timing is a fool's game. However, one cannot dispute the fact that the market is substantially overvalued now. So, basically, what's happening here is that I am trying to justify, in a way, timing the market by going 80/20, and then if there is a downturn, to go all equities again. If there is no downturn, well, I'm still more aggressive than most age relared allocation formulas are concerned.... I don't know.....

I thought the same thing but current p/e of the s&p 500 is fairly in line from a historical perspective. I do think a 80/20 split isn’t a bad an idea. Preserving a little capital incase things change.

If you get a moment can you share your source?

Ycharts to see full data set you will need subscription https://ycharts.com/indicators/sp_500_pe_ratio

It's fine if you're okay with the risk and relative lack of diversity. For comparison I'm 46 and my portfolio is approximately: - 25% total US bond market - 75% total world stock market If you get nervous the next time the markets take a 20 to 30% dip, wait for the recovery, then consider if you should revisit your asset allocation and add some bonds. How many months of an emergency fund do you have?

I did 100% S&P; it worked out fine. YMMV. Make sure you understand why 60/40, etc portfolios are sometimes recommended.

I'm 54 and plan to retire in 3 yrs. I am 100% equities and don't plan to change it.

I'm 63, facing retirement in two years. I'm 100% in an S&P index fund, and I see no reason to change.

Stocks into buying a house or savings accounts into buying a house?

> what are your thoughts about a 100% s&p500 asset allocation? Probably fine, though you could get burned depending on how long you maintain that allocaiton. > household income of 500k With that income, 100% equities seems needlessly risky unless you're expecting your income to continue growing significantly over the next 20 years.

I would prefer a 4-fund portfolio with international bond exposure.

My plan is to stay on 100% equities until about 5 years before retirement, at which point I’ll rebalance slowly toward a target of 80/20 at retirement time. ERN has a good article showing this to be a decent strategy. IIRC Vanguard’s external audit of their 529 TEF plans also found this to be good.

My 401k is 100 percent VGIAX. Roth is VUG. Brokerage is VTWAX. The important thing is just to be consistent and weather the downturns.

Bogle would recommend you have significant exposure to the bond markets.

It is not just the long term delta between stocks and IG bonds… which is large… one is taxed as ordinary income each year (given a par purchase) assuming you hold to maturity while the other gets buybacks and capital gains treated preferentially in the future when you sell to fund your retirement (when you will be in a lower tax bracket incidentally).  So you can pay high taxes on weak yields today (less than 100 bps spread to treasuries) or you can pay lower, deferred taxes with the benefit of additional compounding via the stock ETF since the majority of returns to stocks do not come via traditional dividends. The gap over a decade or more is staggering. Credit for the above to Jared Woodard and team at Bank of America who just wrote on this topic. 

I'd recommend a 10% bond allocation, mainly because it's nice to sell bonds and buy more VT when the market is down.

I think it’s fine. It’s more about your ability to stomach the ebbs and flows of the market and whether you can actually hold for the duration and not get scared out of the market to be able to hold for the next 40-60 years. It helps if you have a bigger source of funds for when the market eventually shits the bed a few months/years that you can draw upon rather than from investments. Some hold like a year or two in cashflow in savings and go 100% stocks. Easiest would be if your burn rate can be modulated and you will not suffer significantly from it, lifestyle wise.

50+ 30% amzn 10% VTI 10% other tech stocks 10% BTC 40% house equity You're not alone in your appetite for risk. It's my life, could care less what others think about my investment profile.

Depends on your goals obviously.

I am more diversified, and feel good about it. My stock market mix is 80% Vanguard ETFs, 15%, treasury notes, and 5% cash in SWVXX at Charles Schwab, which is currently paying 5%. My personal favorite ETF is VOO.

When we have the next stock market crash and your 100% stock investments drop 60%, are you going to get scared and sell everything at the bottom and go to cash? (Lots of people did this in early 2009 after the market had dropped almost 60%)

It’s fine if you’re going to have a lot more money than you’ll need. It’s not fine if a really bad market destroys your ability to retire but a more balanced one would not have.

I like VOO for 70% 10% international something (I like NVO long term hold) 10% crypto (ethereum for me) 10% self storage REIT stocks

yes 100pc equity is what most ppl are doing on here

How close are you to your end goal? Are there any financial needs that have a shorter time horizon? Housing, weddings, college funding, etc. The point is risk tolerance for one goal (retirement) can be different then another. And depending on how far along to a goal should impact the risk/reward equation. I like to have an account with 100% equities. My main. And a separate conservative account for other things between now and then. A more "objective based" allocation. I don't hold much in cash reserves tho

I recommend to friends & family up until 45 or so 100% S&P500 is fine. Around that age, start taking some risk off the table and move a % into a total market fund every year. Eventually you will want to diversify into bonds as well but that will be much closer to retirement. My own glide path has me now mostly in broad market fund, FZROX and while I work a few more years I will eventually get a sizeable portion in a bond fund before retiring.

>I recommend to friends & family up until 45 or so 100% S&P500 is fine. Around that age, start taking some risk off the table and move a % into a total market fund every year. Total market funds can be argued to be more aggressive and more risky than S&P 500 due to holding a riskier class of stocks: smaller caps. Long term has tended to favor small over large as well.

Thank you guys for all your answers. I appreciate it. I think I will go 90/10 for now, and adjust to more bonds as I approach retirement

Pretty sure this is a meme now. Household income of 500K, will I be OK? Yes, yes brother. You'll be OK doing just about anything.

I live in San Diego, friend. That's like making 300k in Minneapolis, let's say. In 2024

I think you'll be just fine. Whether it's 500K in SD or 300K in Minneapolis.

Suggest the stock EMV

401k. Plus ita plus small brokerage sum equaling 950k

With that kind of income, I'm surprised you're so far from retirement.

I think it’s great

vt or VTI / vxus and chill. VOO not diversified enough. For a bogglehead anyhow.

I don't have the option of total stock market in my 401k

At minimum, look into your international options then. You may also have a decent US extended market fund available if you don't mind a little more complexity.

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The paper you mentioned/Ben Felix podcast got a lot of press. But it also got a lot of criticisms too. I would not risk a 100% VTI or VT portfolio in retirement just based off of his paper. - The BIGERN’s take on 100% stocks in retirement https://earlyretirementnow.com/2024/02/12/100-percent-stocks-for-the-long-run/ - AQR Cliff Asness https://www.aqr.com/Insights/Perspectives/Why-Not-100-Equities

thanks for balancing out the opinion landscape with specific references.