6 ms·
If I have $100k, where should I put it in ?
by zump 10y ago
If I have $100k, where should I put it in ?
- hendzen 10y agoQuick answer: 35% in VOO, 35% in VWO, 30% in BND. Depending on your risk tolerance you can lower/raise the proportion of BND.
- pulse7 10y agoWhat are VOO, VWO and BND?
- choxi 10y agoThey're index funds, I believe all of these are offered by Vanguard.
- draaglom 10y agostock symbols: https://www.google.co.uk/finance?cid=13772865 https://www.google.co.uk/finance?cid=13772865 https://www.google.co.uk/finance?cid=704805 https://www.google.co.uk/finance?cid=704805 https://www.google.co.uk/finance?cid=730771 https://www.google.co.uk/finance?cid=730771
- brianwawok 10y agoOr the fidelity clones like FUSEX. If it's taxable can use a service with index loss harvesting to get a little more boost...
- SomeStupidPoint 10y agoCould you elaborate on that answer a bit (and maybe explain the symbols)?
- hendzen 10y agoThis is a a pretty simple diversified, passive portfolio. - VOO: tracks the S&P500 index (US large companies) - VWO: emerging markets equities - BND: US bonds I picked these index funds because Vanguard ETFs are well-regarded for their quality and extraordinarily low expense ratios. For example, the much more well-known SPY ETF, which also tracks the S&P500, has an expense ratio of 0.10%. VOO has an expense ratio of 0.05%.
- pc86 10y agoAs always, the quick answer is (almost) always wrong if for no other reason than you don't know anything about the person's situation. "I have $100k what do I do with it?" is like asking "I have a car what do I do with it?" If you live in Birmingham, AL and the car is a Tesla and your only method of transportation, the answer will be very different than if you live in San Diego and the car is one of five and it's a half million dollar supercar. How old are you? How much do you have saved for retirement? How much do you want to earn during retirement? How much do you have in reserve in case you lose your job? In case you have major unexpected medical expenses? Has the money been taxed already or is it in a tax-advantaged account? Do you want it in a tax-advantaged account? What happens to you financially if you lose 10/20/50/100% of it? What happens to you mentally if you lose that percentage? "Put it in these three funds" is the nest egg equivalent of saying "You drive it, duh" when someone asks what to do with their car.
- hendzen 10y agoSure... I think the portfolio is a reasonable choice for the typical HN user. By that I mean someone around 25-35 working in the technology sector with a high but not extraordinarily high income.
- fitchjo 10y agoIf you are assuming a 25 - 35 year old, you must be very risk averse as 30% is pretty high for such a young person to have in bonds.
- twblalock 10y agoIt's interesting how that has changed over the years. For a long time, the standard advice was for investors of any age to have 50% stock and 50% bonds. Then "age in bonds" came around, and now many people recommend even less than that. Of course, 50% bonds was easy to recommend 40 years ago when US savings bonds paid 5-7% annual interest, guaranteed for 30 years.
- 10y ago
- geoka9 10y ago> 35% in VOO, 35% in VWO, 30% in BND. Is this just for now or in general?
- hendzen 10y agoIn general. This is a passive portfolio. It's designed for a style of investing where you automatically put a % of your income in to the portfolio every month or every quarter, with the occasional rebalance if needed.
- jimlawruk 10y agoIsn't that a little too much weight to Emerging Markets(VWO)? How about simply 70% VT (Total World), and 30% BND
- hendzen 10y agoIt's a fair point. I included it because it has a high exposure to Chinese equities.
- deleted 10y ago[deleted]
- emcq 10y agoYou would have a higher effective fee, 0.14% vs 0.10% if you had an equal split between VOO and VWO. That said, I think there is healthy skepticism with the world funds in terms of their ability to reduce risk considering so much correlation to us stock and dollar value, relatively high fees, and relatively weak long term performance relative to US markets. Some of this is due to China not making available some of their investment opportunities to foreigners. I'd love to get an index fund that has exposure to growing companies like DJI or Didi.
- twblalock 10y agoIf you want to invest in Didi, which hasn't had an IPO yet, you can invest in Apple and Alibaba, which have invested a lot of money in Didi. Given that Apple is the largest holding in most S&P 500 and total stock market index funds, anyone who has invested in those funds will benefit somewhat from the success of Didi. Jack Bogle, the founder of Vanguard, goes so far as to argue that a broad US-market index fund is all you need for international exposure, because many US companies will benefit from the success of the international companies they have invested in and do business with. I don't quite buy that argument, but it's something to keep in mind when you construct a portfolio: index funds that appear to be distinct often overlap.
- tanderson92 10y agoYou would be much more diversified, at lower cost, if you invested 50% in VSS (Small Cap International) and 50% in VOO. VSS has a negative fee due to its securities lending practices. And VSS has lower correlations with US stocks, while also possibly exposing you to small outperformance (in the 3-factor sense)
- arsenico 10y agoI'd diversify further across fund managers, asset classes and geography.
- acconrad 10y agoWhy those instead of VTI and VXUS? Broader exposure (more diversification) in those funds
- aswanson 10y agoWhat would your answer be for a person with a 20-25+ year horizon, looking for a sector with alpha on that time scale. Like say, an Intel or GE circa 1982 and not needing to touch it until 2007?
- twblalock 10y agoYou are just as likely to pick a loser as a winner over that duration unless you have insider information. Just own the whole market and settle for average returns, which are a lot better than what you would get if you bet on the wrong sector or companies.
- aswanson 10y agoYou don't think that there is alpha in say the Russell 2000 mid-cap over the DJIA in the long term? More room in small and mid caps to grow.
- twblalock 10y agoThere is also more room in the small- and mid-cap companies for failure. If they had the kind of massive revenue, cash reserves, or really strong product lines that are needed to make it through hard times, they would be large-cap companies.
- inputcoffee 10y agoBetterment, Wealthfront, or Vanguards robo-advisor. I do not receive a direct benefit from making this recommendation. (Not counting the feeling of doing good, or engaging in debate here or whatever).
- toomuchtodo 10y agoVanguard target date funds (moving into Admiral funds when your net worth permits). I had tens of thousands of dollars at Betterment and felt their fees were not worth it. All at Vanguard now. EDIT: @ Silasx I don't disagree! Although, its cheaper for me to use Vanguard than to start my own index fund company. Not the hill I want to die on.
- planteen 10y agoDoes Vanguard offer Admiral target date funds? Something like an Admiral version of VFIFX would be nice. I don't see anything on the web about it.
- toomuchtodo 10y agoThey do not unfortunately. You'll spend 15 minutes rebalancing your portfolio every quarter if you're i admiral funds instead of target date; annoying, but not a deal breaker.
- SilasX 10y agoSorry for the rant, but it really irks me how Vanguard charges a fee for the target date funds, when all they do is buy shares of other Vanguard mutual funds, which themselves pay fees to Vanguard (and rebalance).
- beamatronic 10y agoWhat is your risk tolerance? What is your time horizon? Do you have any debt? At what rate? Is the interest on that debt tax-deductible?
- deepnotderp 10y agoAMD+Nvidia, not even kidding, i've made a ridiculous amount of money off them.
- ohwello 10y agoGreat opportunity to sell and lock in your gains with some index funds.
- saryant 10y agoErr, AMD is down 55% over the last ten years. The total market up 65% over the same time period.
- zazpowered 10y agoThose are ok as a small part of your portfolio but it shouldn't be everything
- zazpowered 10y agoHere are the portfolios of some popular robo-advisors https://senzu.io/investing/robo-advisors https://senzu.io/investing/robo-advisors. You can buy the same funds using your own broker (Vanguard, Merrill Edge, Robinhood etc.)