Hey y’all! I have been thinking that this community could use a weekly discussion thread. Feel free to comment below with anything and everything money related that is better suited to a conversation or a quick question and answer than a full post. Some ideas include:

  • Journaling about an ongoing job search
  • Asking for ideas about how to manage an emergency fund
  • Logging recent stock trades
  • Talking about the impact of inflation on your budget
  • Your plans for maximizing the rewards on a credit card

Again, those are just suggestions, if there’s really anything you’d like to talk about related to finance in your life, feel free to put it here.

  • gyrfalcon@beehaw.orgOPMEnglish
    3·
    1 year ago

    Alright broad rundown time so I can reference on future posts:

    For retirement I am currently following a portfolio allocation from Ben Felix, adapted for the U.S. by this website, with a 15% bond allocation. For those who don’t want to click through, this is essentially a total market portfolio that makes sure to cover domestic and international equities, with a bias towards small cap value stocks, which historically have shown additional returns over large growth stocks. The bond allocation is more by accident if I am being honest, and I will probably gradually reduce it as I am pretty young and I find the arguments presented for lifecycle investing pretty convincing, though not actually convincing enough to leverage my retirement without the direct advice of a financial advisor. I am more or less hitting my target allocation now, as I just finished a 401k rollover and was able to get everything the way I wanted.

    I have a small hobby investing account, funded from my hobby budget and currently less than $1k in total after getting a $100 bonus for funding the account. The investments there are mostly picked based on what I think is interesting, including the following:

    • Funds
      • NTSX: Efficient core fund that uses futures to replicate a 90/60 leveraged stock/bond portfolio, for only 0.2% in fees
      • RSP: S&P 500 index fund that holds all 500 stocks in equal weight rather than market cap weighting. This keeps the portfolio from being mostly the top few countries, ideally improving diversification.
      • MUB: Municipal bond fund, this is a taxable account and I thought it would be fun. Plus lending to local governments makes me feel like I’m doing my civic duty.
      • VBR: Small cap value ETF from Vanguard, tries to capture the size and value premia. I also hold this in my retirement accounts for my domestic small cap value allocation.
      • DISV: Dimensional small cap value international fund, similar to VBR but outside the US. I hold similar fund AVDV in my retirement accounts
      • ICLN: Renewable energy fund, because oil companies suck
    • Individual Stocks
      • These were selected on the basis of small companies trading at or near book who had consistently beaten earnings expectations around last fall. It’s been mixed success, but a lot of fun! These are sized at ~1/4 the size of my individual fund positions
      • MHO: U.S. homebuilder, up around 80%
      • CLS: Software and hardware provider for logistics solutions, up around 27%
      • UNM: Insurance company, they do life and critical illness but not main healthcare, up around 17%
      • WRK: Paper packaging company, down around 30%. I let a cheap valuation blind me to the fact that they don’t actually make that much money, and their Q2 reports were BAD.

    For things that are too risky or capital intensive for my hobby account, I have a paper trading account. Right now this is mostly options strategies, and it’s a good thing it’s not a real trading account because I fat finger the app on my phone regularly enough that it would be a problem lol. Anyway, the main plays there are:

    • Bullish call spread on F using LEAPS. This was originally a backratio spread which I think is a neat defined risk trade but I wanted to roll it out to a further strike date and messed it up.
    • Poor mans covered call on GLD. I originally opened a relatively deep in the money LEAP position on GLD during the debt ceiling talks, thinking it would be a nicely leveraged way to get some exposure to gold in the event that things went south there. Happily, the government continues to function, and so I decided to use the position as a way to practice the PMCC, though realistically I should just close the position and take my loss.
    • Iron condors on SPX opened on Fridays to expire on Mondays. Originally I thought this would be a very pure theta play, but upon further review I am shorting vega. I don’t think this is an egregious trade overall given how volatility has declined in the last few months, though it has burned me the last two weeks and I think my timing and management of the trade could be significantly improved.
    • Yote.zip@pawb.socialEnglish
      1·
      1 year ago

      Sounds like a solid plan. I link Ben Felix’s videos to people a lot. As far as small cap tilt etc, the most important thing is that you’re putting money into stocks consistently and letting it grow. There’s a tendency to sweat the small stuff with passive investing because it feels like you should be doing something, but in reality it’s a gamble that’s probably only worth a few days of extra work before you retire.

      I’m personally 0% bonds in the accumulation phase but everyone has their own opinions on that sort of thing. My strategy is just setting up a bond tent around retirement and ignoring bonds otherwise

    • JackbyDevEnglish
      1·
      1 year ago

      I’m a firm believer in the Boglehead philosophy of simple index funds being the best. My 401k does not offer a total US market index so I have 80% S&P 500, 10% Russell Midcap, and 10% Russell 2000 (small cap). That’s as close to total market as I can get in my 401k with a single digit of precision.

      My goal is for all of my retirement funds to match VT which is a total world index fund. It is about 60% US and 40% non US. I have more money that I can fit in a 401k so I hold the international stock in my personal account. For the VXUS fund (total non-US index) there is a foreign tax credit apparently so better for that to be in a taxable account to get the benefit I think. I have a lot of VOO (S&P 500) I’m in the process of switching for VXUS and VTI but I don’t want to realize too much capital loss. (I put money from selling my house into VOO because it was good enough and I hadn’t thought too hard about it at the time.) You can deduct $3k per year from your income on your federal taxes but I don’t know how annoying it is to keep track year by year (you can carry losses forward). So I’m currently tilted towards large cap US companies more than I’d like to be.

      I currently don’t have any bonds other than some Series I bonds I got last year when the rates were great. I feel like I should probably start getting some though but I’m not sure how much. Maybe age minus 30 percent or something? Idk. I’m 31 and am pretty optimistic. AGG and IAGG seem good, they were slightly more tax efficient than BND and BNDX according to some Reddit post I found last time I looked into it, but regardless they should be in a tax deferred account.

      If VT had that foreign tax credit I’d buy it directly. It matches my goals perfectly, but it’s better to buy VTI and VXUS separately.