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Hmm SPY weighting... 6.6% AAPL 6% MSFT 2.9% AMZN 3.9% GOOGL 1.8% TSLA Brain dead DCA + working in tech and getting RSU / ISO re-ups every year means you're jus

Hmm SPY weighting... 6.6% AAPL 6% MSFT 2.9% AMZN 3.9% GOOGL 1.8% TSLA Brain dead DCA + working in tech and getting RSU / ISO re-ups every year means you're just betting only on tech. Customization allows you to mitigate/ manage some sector risk if you want it.

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jamil7 4y ago
You can still do that with individual stocks or sector ETFs (if you can stomach the expense) while holding a broader index as the core.
nerdponx 4y ago
Are there any funds that specifically seek to spread exposure across multiple sectors of the economy?
- aketchum 4y ago
  yeah, VTSAX or other total market index funds
  - lotsofpulp 4y ago
    There is not much difference in allocation (see portfolio tab): VTSAX - total US stock market mutual fund https://www.morningstar.com/funds/xnas/vtsax/portfolio https://www.morningstar.com/funds/xnas/vtsax/portfolio SP500 - VOO https://www.morningstar.com/etfs/arcx/voo/portfolio https://www.morningstar.com/etfs/arcx/voo/portfolio Tech simply has a proven track record of raking in outsize profits, and I see no reason to bet against businesses with unmatched efficiencies of scale and enormous barriers to entry. Hell, even the king of investing, Warren Buffet, has been humbled by BRK only just keeping up with SP500 because of its huge 25% investment in Apple. You would have to go out to VT - total world market to see a difference in portfolio allocation. https://www.morningstar.com/etfs/arcx/vt/portfolio https://www.morningstar.com/etfs/arcx/vt/portfolio
pramsey 4y ago
Good point! I guess the prudent FAANG engineer would buy a total market fund and then short a portion of their employer to net out the overexposure. Would sure feel odd though!
- ctchocula 4y ago
  Shorting your employer just in order to net out the overexposure seems putting the cart before the horse. Part of choosing who to work for is believing in the company's future financial outlook, because you are intentionally taking a long position in the company with your RSUs. Taking a short position both costs money and it would be simpler to take a long position in another company by choosing to work for them instead. On the other hand, if you are 100% certain in your investment thesis that you don't want overexposure to any company including your employer, you could try direct indexing the rest of your portfolio e.g. buy S&P 500 except for your employer. Selling on vest is another simple alternative you could consider.
- roland35 4y ago
  Be sure to check your employer rules before doing this! It is probably against the rules to short or trade derivatives of your company stocks as an employee. At least at my employer this also applies to any fund containing >10% of our stock too. A safer approach would be to just purchase a fund which excludes tech. Personally I'm too lazy to do this and just have a total market fund :)
  - Rebelgecko 4y ago
    Another thing to keep in mind is that post-2018, a lot of tech companies got categorized as different sectors in the S&P 500. So you'd need an index fund that is ex-tech and/or ex-communications. I've looked around a bit and the fees for these types of funds seem much higher, so like you I just stick with the generic total market fund.
- hackernewds 4y ago
  Shorting your place of employment is unethical, if not entirely illegal (IANAL)

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jamil7 4y ago

You can still do that with individual stocks or sector ETFs (if you can stomach the expense) while holding a broader index as the core.

nerdponx 4y ago

Are there any funds that specifically seek to spread exposure across multiple sectors of the economy?

aketchum 4y ago
yeah, VTSAX or other total market index funds
- lotsofpulp 4y ago
  There is not much difference in allocation (see portfolio tab): VTSAX - total US stock market mutual fund https://www.morningstar.com/funds/xnas/vtsax/portfolio https://www.morningstar.com/funds/xnas/vtsax/portfolio SP500 - VOO https://www.morningstar.com/etfs/arcx/voo/portfolio https://www.morningstar.com/etfs/arcx/voo/portfolio Tech simply has a proven track record of raking in outsize profits, and I see no reason to bet against businesses with unmatched efficiencies of scale and enormous barriers to entry. Hell, even the king of investing, Warren Buffet, has been humbled by BRK only just keeping up with SP500 because of its huge 25% investment in Apple. You would have to go out to VT - total world market to see a difference in portfolio allocation. https://www.morningstar.com/etfs/arcx/vt/portfolio https://www.morningstar.com/etfs/arcx/vt/portfolio

pramsey 4y ago

Good point! I guess the prudent FAANG engineer would buy a total market fund and then short a portion of their employer to net out the overexposure. Would sure feel odd though!

ctchocula 4y ago
Shorting your employer just in order to net out the overexposure seems putting the cart before the horse. Part of choosing who to work for is believing in the company's future financial outlook, because you are intentionally taking a long position in the company with your RSUs. Taking a short position both costs money and it would be simpler to take a long position in another company by choosing to work for them instead. On the other hand, if you are 100% certain in your investment thesis that you don't want overexposure to any company including your employer, you could try direct indexing the rest of your portfolio e.g. buy S&P 500 except for your employer. Selling on vest is another simple alternative you could consider.
roland35 4y ago
Be sure to check your employer rules before doing this! It is probably against the rules to short or trade derivatives of your company stocks as an employee. At least at my employer this also applies to any fund containing >10% of our stock too. A safer approach would be to just purchase a fund which excludes tech. Personally I'm too lazy to do this and just have a total market fund :)
- Rebelgecko 4y ago
  Another thing to keep in mind is that post-2018, a lot of tech companies got categorized as different sectors in the S&P 500. So you'd need an index fund that is ex-tech and/or ex-communications. I've looked around a bit and the fees for these types of funds seem much higher, so like you I just stick with the generic total market fund.
hackernewds 4y ago
Shorting your place of employment is unethical, if not entirely illegal (IANAL)