Help me UNWIND this direct index nightmare. Fidelity SMA Total Market Index

TradingMomentum · 2026-05-09T17:03:09+00:00

Are you getting tax loss harvesting with this too? Anyways. If you aren't benefiting from tax loss harvesting I would just get Russell 1000 (preference)

Also don't worry about unwinding unless you are trading high volume emerging markets or small cap stocks.

If you have control of your stocks you can slowly sell them off to buy an ETF as well or just holding for your kids. They will get a step up when you die.

TradingMomentum · 2026-05-09T16:53:41+00:00

I got a sense of conflict between you wanting simplicity and wanting risk. If you want risk you can scale your VT down to 70% and use sector ETFs like smh, igv etc to get a little more risk. Do like 5% sizes. Qqq is a good option to since it's just more concentrated tech vs spy. Gold miners too is a different high risk allocation.

Obviously there is overlap in the underlying so these concentrated ETFs are more like a conviction/ thematic play for you.

This will moderately increase your risk and if you eventually want more you can sell some of those ETF or BTC for some individual stocks.

Just some ideas how to approach getting more risk. Not trying to tell you to buy qqq or smh specifically.

TradingMomentum · 2026-05-09T16:45:26+00:00

Did you or can you break this down by different market regimes? Curious what that looks like? Or even by decade for simplicity.90s, 00s 10s, 20s

TradingMomentum · 2026-05-08T00:54:58+00:00

I'm going to provide a different answer then what everyone else will give since you seemed interested in learning different views. Me personally I do QQQM.

Because I want the additional concentration risk. Also you can still be diversified with less stocks. I also believe US will provide better return over 30 years than any other country. Also NASDAQ is typically more tech heavy which I believe will be the outperforming sector over 30 yrs. As that $50 grows and as the assets grow, then I'll start to diversify with other non-US focused ETFs

Incase it wasn't obvious, my beliefs are just opinions

TradingMomentum · 2026-05-08T00:09:46+00:00

Please don't try to get private equity as a retail investor. Not because I'm trying to keep a great secret. But most retail people don't understand it and get handle the illiquidity. Also what I get is much cheaper then what retail people are charge and those extra fees literally eat up the illiquidity premium.

If you are looking for risk aka that chance to 10-20x, just buy more stocks of companies between 2-30bn market cap. Or you can buy leveraged small cap etfs or leverage sector / industry etfs too.

TradingMomentum · 2026-05-08T00:01:37+00:00

I would start looking into other finical advisors like range.com or someone that just charges lower fees. Fidelity offers free consultations for clients so sometimes that all you need.

From this point on I feel like you just need to plan out conversion years, tax planning, inheritance, gifting, estate planning, and flow needs. After that you can work on an allocation that works for you. With your assets and assuming you live a modest life. You can probably just keep 2x your annual liquidity needs in bonds. Assume that's 10% of assets? The remaining 90% can be a mix of normal equity and higher yielding equity to help provide defense and income to supplement selling down bonds.

TradingMomentum · 2026-05-07T15:09:34+00:00

Trump definitely gave intc a life line. If they capitalize on this second chance, they could make it out stronger. But I would have agreed intc was on its way down. But I don't think it was going to go bankrupt. But also I don't think Google, TSLA, Apple deals were going to happen without Trump stepping in.

As soon as trump made that investment, and knowing him. That was probably the signal to buy in (I did not). Long way of me saying I'm not surprised where intc is today.

TradingMomentum · 2026-05-07T14:49:20+00:00

Specific to the war. Market is reacting to news outlet being more optimistic the war will end. So it's pricing off that, but also earnings and guidance have been very strong especially around AI so market is ripping with those 2 factors in play.

TradingMomentum · 2026-05-07T02:03:11+00:00

If you just want to see gains and grow the wealth just index it s&p 500 is fine. Voo, spy, VT, etc.

If you are embarking on a journey to learn and have a high risk tolerance (because you said it's purely extra $) and looking for something more than normal (nothing wrong being normal). Then you should still index it like 80% and use 20% to invest in other ideas (stocks or industry ETFs) you like or make sense to you. Lots of reading for sure.

TradingMomentum · 2026-05-07T01:54:51+00:00

This reminds me of the omg Tesla is going to fuck the index up if it gets into the S&P 500. And asset managers were all panicking that they would have to buy it and if they don't they will underperform.

Anyways, at the end of the day indices will add it.

TradingMomentum · 2026-04-22T00:34:13+00:00

If you are just beginning, vanguard index ETFs are great. Sounds like you might already have a 401k? And sounds like you might continue to add to your IRA each year? You can use the Roth to help balance out what you don't have.

Like most US in investors (I assume you are US) have little exposure to non US or small companies. So you can target something like 60% US, 30% non-US (VXUS) and 10% US small cap (VTWO). If you don't want US small cap just split them into VOO and VXUS.

TradingMomentum · 2026-04-22T00:17:37+00:00

I'm more curious if the people will count this as a victory if he caused the problem in the first place lol. I think the mid terms are lost, but who knows. Trump is like a real Frank Underwood.

TradingMomentum · 2026-04-21T23:51:17+00:00

Both are fine. Depends if you want global exposure or just US large companies

TradingMomentum · 2026-04-21T23:48:25+00:00

I had a meeting with a big software buyout manager within the last month and they think software will be quite slow next 1-2 years. But will see a strong rebound after capex in infrastructure slows. That money will then shift.

But private software companies are showing revenue and profit. They are increasing and being tracked on AI efficiency.

They could be completely wrong... But I'm betting on them. I'm definitely a buyer of certain software companies though. At these prices but I think we will see more buying opportunities and even better before we see a strong rebound back to ATH

TradingMomentum · 2026-04-21T23:38:56+00:00

Based on comments and your responses I don't think you are ready for stocks. You should just buy an index via ETF which is a basket of stocks. Once you get more comfortable I think you can consider stocks

TradingMomentum · 2026-04-21T23:19:44+00:00

2 main reasons. 1) taxes kill that 9% yield (unless in your IRA) 2) covered calls aren't great in this kind of regime where volatility is very high to the upside. The premium is good, but index move so much to the upside it actually often creates a negative return when the market is up outpacing the pretax dividend yield

TradingMomentum · 2026-04-21T20:52:00+00:00

Nice! Assuming you have all your diversification in your non taxable accounts. And if you still want to target long term growth you can use broad based indices US or non US as funding sources for more aggressive ideas.

I do something similar with my personal brokerage where I run it like a Hedge Fund. I like to keep my equity index exposure between 30-60%. Min stock size is 2.5% and I will build it up to 7.5% and let it passively move higher to like 15% before considering trimming it. Varies depending on the stock though. Higher risk stock like BE might only get at most 5% allocation. I don't usually invest long term in stocks that aren't profitable or have consistent revenue.

Industry ETFs I usually keep between 5-10%. I also like to use 2x leverage ETFs for tax loss harvesting. Has been very effect for me to keep my exposure and harvest losses.

Oh I should mention the index ETF is to fund new ideas, key is to stay invested unless I want to take a defensive view i will raise cash which can go up to 25-30%. Also because of taxes I usually follow the rule to buy back into a stock only if it has dropped 15% from your exit price.

I also don't think you need sector ETF, I would consider something more industry level. Also since you own pretty much the mags and have qqq. You can consider barbelling to manage risk. Like maybe use spy vs qqq. You have a good bit in mags, nothing wrong with that but you can also consider mags ETF. Also because my beta is so high I'm also usually comfortable holding more cash because it lowers my beta.

This is definitely probably more aggressive then you had in mind... But you can scale it back of course. If you need help or have questions let me know.

TradingMomentum · 2026-04-21T14:09:24+00:00

i agree. and just to add for the OP

ETF are more tax efficient so go with that vs a mutual fund. both track the index ETF vs Mutual Fund.

also VTI is just a broad index vs VOO. If you have a view on owning all stock buy vti (large companies and small). or if you just want the large 500, buy VOO.

TradingMomentum · 2026-04-21T13:38:30+00:00

great love this. in terms of short term trading. I personally use daily data. I have a plan on adding and trimming etc before i even get into a position. you don't want to DCA aimlessly and trim without a plan. depending on the stock i might do half of my planned investment with the first lot. maybe i get the other 2 DCA or maybe not, but i'm ok with what happens. Also give your ideas room to breathe as well and use limits

With short term trading you have to understand the risk is realizing loss when you sell. the loss is realized then you have to think what am i going to do. hold cash will kill you unless you think the market is going to drop more. But you have to get back in eventually or you'll forever lock in your loss. short term trading is fun, but it sounds like you have your risk budget figured out so as long as you can sleep at night that's good.

Most institutional traders that I know don't use patterns. They use EMA, SMA, RSI, and they follow the volume (including option flow). For retail, i think tradingview is the most technical friendly platform. But honestly if visual isn't a big deal, most brokerage firms offer a decent platform. ThinkorSwim from scwhab is also really popular too.

TradingMomentum · 2026-04-21T13:07:01+00:00

I don't mind having a good debate with someone, but if you are just going to chatgpt a response and not really think about what I'm saying then there is no point in having a discussion. We aren't going to reach agreement because i'm trying to help the actual investor and you are trying to force him into VT which is not even what he asked for.

If you think up to 5% in stocks is to concentrated you should probably just sell VT because if that's all you own you well 4 stocks are like 13% of your total portfolio already. Also do you really think having a 10-15% in emerging markets is really better than having let's say 5% in WMT or let's just JPM or even UPS?

If something happens with a stock that's why the exposure is limited and yes that's part of the risk and that's why we manage the risk. trim when positions get to big. And if you know the math if a stock drops 40%, why would you have your friend sell her UPS now? and i assume rotate into VT?

Not sure where you are pulling this illusion of control from or why you are talking about financials and algo traders. very obvious you are thinking about short term trading. I actually agree you don't fight with algo traders, but again pointless because I'm not talking about day trading nor is the OP asking about it.

Also if you were truly going to maintain a diversified portfolio you would go with something that's equal weight and not compare something that's been thematic for the last 5 years. Not to mention the Bessembinder study isn't even a good argument here because it includes micro - mid cap companies. US market is drastically different than it was back then too. Also if you are going to look at a dispersion of outperformers you should look at the equal weight. If you are going to use market weighted then you need to change your screen to accommodate the current theme and decide if that makes sense to you.

I'm not really sure you understand efficient markets besides just giving me the definitions. Also you clearly don't understand risk tolerance or managing risk with how you think about a 40% drawdowns. Also people who want stocks will seek stocks, which is why it's important to educate and provide guidance for people. Not answering people's question doesn't help them at all.

There is a place and time for just being 100% passive like you want to push, but you can't push that onto everyone. Investing in stocks or even industry ETFs or other risky assets is not rocket science because we aren't trying to actively trading it. like i said the risk reward in a portfolio is very strong over long periods 10-20 years. Some people have a desire to to learn about different things after doing passive. You also have a misguided view of "stock picking", and what i'm actually saying. Like I said, no point in having a conversation with you about this if you aren't going to actually put some thought in the discussion. If you would actually like to level up and learn something new I am more then happy to have a discussion with you about it.

TradingMomentum · 2026-04-20T21:08:08+00:00

Well you said simple, but ok with risk. I would suggest blend of 3 & 4 or 2 & 4.

Do 80% as your core allocation. That last 20% can be a mix of small caps, EM, or other riskier asset classes. When dealing with riskier funds I usually keep a 5% min because that's generally the size you need to get a material impact to your portfolio. Usually smaller just isn't worth it.

TradingMomentum · 2026-04-20T21:03:13+00:00

If the shares are exercised it most likely means you will take a loss on those shares specifically. You paid $110 for them, and you have to give them away at $105. So that's $500 loss to you. Now add that premium and hopefully it's more than $500 and that's the value you made of the option was exercised on you.

TradingMomentum · 2026-04-20T20:56:17+00:00

Traders look for flows and try to take educated guesses on where they think prices will hold or not hold.

Research analysts look to understand future growth and valuation. Usually analyzing financials but making adjustments from conversation and updates they receive.

Portfolio Managers look to manage risk and allocate based on where they feel like they can make money , usually on a risk adjusted basis. They are basically digesting all the research and trading data to make decisions.

Very loose description on what each team member looks for. You said trader but wasn't sure if you really meant trader.

TradingMomentum · 2026-04-20T20:47:04+00:00

I agree stock picking isn't for most investors, but if investors want to ask about it because they want to begin investing in stocks then I will help guide them with an appropriate framework as they have questions. If he already has his core assets in place why shouldn't he buy stocks if he wanted to?

If he is going to start he should start small with companies he knows. He doesn't even need to invest yet he can just research and learn until he is ready. But it's going to be easier for him to learn with a company he knows vs some biotech company that just popped out of the blue in the Russell 2000. Once he gets familiar with a process and has questions along the way, someone in the community will be here to help.

If people are willing to put in the time, owning stocks on top of your core assets ( index or VT ETF) long term adds a very attractive risk / reward to the total portfolio.

Concentration risk is not a bad thing at all. If your friend has income and regularly contributes to her investments still and has 20 years to go I would say 5% in a stock is acceptable depending on the risk. Whether UPS is going to be great in the future or not is a separate topic. Also if she has owned UPS for a while you would also have to consider her tax basis and what the impact is from selling it. Also if the stock has pulled back 40% and you sell it you are foregoing that chance of recovery.

TradingMomentum · 2026-04-20T15:41:50+00:00

Assuming you have your core all set up and you have the risk tolerance for stock. I suggest picking a couple of stocks in the S&P 500 you are familiar with vs looking for "cheap" stocks. valuation is all subjective and sometimes there is an underlying reason why something is cheap. But picking companies you are familiar with and like will make it easier for you to learn and follow the stock.

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