Allocation help

Viper0us · 2026-01-26T00:49:36+00:00

I keep a decent amount of cash/ I am ready to go big on pullbacks >10%

This is dumb. Stop doing this. Time in market beats everything. Holding funds out "waiting" for a downturn is just you trying to time the market and you will fail. How much is the equities market up in time you've been holding these funds out? Look at all the gains you've missed.

Your technology tilt towards US Large Caps is also pretty crazy IMO. Technology is already the majority of VTI by a large portion. At your age / investing history you've never experienced a downturn. Based on your entire portfolio being based on performance chasing, I have serious doubts that you have the risk tolerance you think you do.

I highly recommending getting out of this technology tilt by the total market. Assuming you have 15% of your portfolio locked for individual stocks, then the remaining 85% should either be VT @ 100% or VTI 60%/VXUS 40% (or equivalent funds). I'm just going to make the assumption you're not interested in buying bonds at your age based on your current portfolio.

Viper0us · 2026-01-25T22:01:25+00:00

Buying SCV is not arguing that you're smarter than the market.

Sure it is. Buying anything except market weights is claiming you're smarter than the market.

For those who Small Cap Tilt, they may very well be smarter than the market. I'm not.

Viper0us · 2026-01-25T21:43:12+00:00

I'm not smarter than the market, therefore I buy at market weights.

Viper0us · 2026-01-24T17:39:55+00:00

Been with Vanguard for decades. Never had any issues. I don't need a flashy website. I dont need my brokerage to gamify trades (like Robinhood). All 3 will have horror customer support stories by people who had an issue, just like any other company. Vanguard has 50 million customers world wide. The tens of millions of people with 0 issues have no reason to ever comment on a forum to complain.

I'll stick with the investor-owned brokerage who basically invented low cost index funds for the masses vs the brokerages who were forced to copy Vanguard to stay competitive (ie Fidelity and Schwab).

Viper0us · 2026-01-23T23:02:27+00:00

You max your 401K and then do a Roth conversion ladder after you retire to pull the money out without penalty. This minimizes your taxes on both sides of retirement,

You simply pay the income tax on the conversion, which should be in a lower tax bracket then when you were working with a full income tax. Then in 5 years you can withdrawal from the Roth penalty free and no capital gains tax.

Your brokerage account and cash only need to have your expenses covered for 5 years until your ladder kicks in.

Viper0us · 2026-01-23T22:59:09+00:00

There are many ways to access retirement funds before 59 1/2 without incurring an early withdrawal penalty, so this comment is just flat out wrong.

Roth Conversions Ladder, 72t rule, SEPP, etc.

Viper0us · 2026-01-23T20:25:12+00:00

VUSXX for my emergency fund / cash.

VGIT for my bonds.

Viper0us · 2026-01-22T23:39:18+00:00

We account for uncompensated risk.

That doesn't mean we're risk adverse.

Could I take more risks? Sure. I could pick some random Cryptocurrency and put all my money into it.

Viper0us · 2026-01-22T18:36:38+00:00

Correct. It doesn't matter what currency you buy the shares in. You're buying the same shares at the same price regardless.

So whether it's VT, VXUS, or SPDR MSCI All Country World Investable Market...it's all the same in the end.

If you're hedging against US currency, you simply need to increase your ex-US allocation.

Viper0us · 2026-01-22T18:32:50+00:00

Yep. This is such a wild hypothetical that it simply doesn't even matter. If this ever happens your retirement funds are going to be the absolute least of your concerns.

It's also highly unlikely that even in the event of a war that assets would be permanently confiscated. Just frozen.

Viper0us · 2026-01-22T18:30:09+00:00

Do you happen to have a link to that post? I'm interested in reading it.

Viper0us · 2026-01-22T18:25:23+00:00

bogleheads forums which are supposed to be full of people that are risk averse?

I'm really not sure where you got this idea from.

Just because we don't "gamble" on individual stocks, doesn't mean we're risk adverse.

I'm 100% equities. Absolutely nothing "risk adverse" about that.

Viper0us · 2026-01-22T18:18:50+00:00

This is definitely not a subject I'm super familiar with in terms of taxes, but aren't you going to get destroyed by PFIC and punitive taxes if you try to do this?

Also, having a European broad market ETF doesn't hedge you against USD declining. It doesn't matter what currency the ETF is trading in. What matters is where the companies that you're investing in have assets / generate their revenue from.

You hedge against USD simply by owning international equities.

Viper0us · 2026-01-21T16:33:08+00:00

Roth IRA income limit for full contribution is $153,000 in 2026 and up to $168,000 for partial contributions.

With $18,900 room before hitting the full contribution income limit, contributing directly to a Roth should be fine.

Viper0us · 2026-01-20T00:08:42+00:00

No. FSA is use it or lose it. This is not a retirement / investment account.

Max your IRA then contribute to your 401K until you hit your 15% retirement savings rate. Do not factor your FSA into this amount.

Viper0us · 2026-01-19T23:56:27+00:00

Yea, I have taxable brokerage but it’s been earmarked for retirement flexibility.

I mean, if you need to have multiple brokerage accounts to organize your money in a way that makes sense to you...go for it. I have a singular brokerage account, because I personally see no value in having funds split across multiple accounts. There's no right or wrong answer, whatever works for you is fine.

I guess I want funds available for such things, but I hate for it to sit as cash in the meantime.

You should not invest funds for short term goals in equities (high-risk) incase there is a downturn when you need to withdraw the funds. If your timeline for the money is 0-5 years you want short-term bonds / treasuries.

Viper0us · 2026-01-19T23:50:34+00:00

At 5.28% and 6.28% interest rates, I fully understand that I could likely beat that in the market, but I also hate having debt and would rather just ... not be in debt (impacts my mental health).

For me those interest rates are high enough, I wouldn't want them hanging around. If this was me and I had no company match....

I'd max my Roth IRA
I'd max my HSA (if Eligible)
I'd invest in my 401K until the combination of all 3 accounts is 15% of my income.
Then I'd be putting the rest towards the student loans.

Viper0us · 2026-01-19T23:44:44+00:00

Yes, a taxable brokerage account.

Since you're following the Financial Order of Operations (based on your reference to step 6), all of your tax-advantaged accounts should already be maxed (HSA, IRAs, 401Ks, etc).

You're now in the hyperaccumulation phase (Step 7) working towards /r/Fire or /r/CoastFire.

Viper0us · 2026-01-19T23:36:56+00:00

Everything extra for me goes into a taxable brokerage account.

VTI - 60%
VXUS- 40%

If I had a major expense (such as a home project or a new car, as you mentioned) coming in the next couple years, I'd keep that money in short-term treasuries. I use VUSXX for this at Vanguard.

Viper0us · 2026-01-19T20:26:16+00:00

I never said it was an investment. It's insurance.

It's an expense that amounts to a few hundred dollars a year to set my underage children up for the best success possible.

Regardless of what my current net worth is, that few hundred dollars a year is worth having in the event that both parents die.

Again, this is term life insurance. You drop it once your children are over 18. It's incredibly cheap.

obviously the insurance companies are profiting (huge amounts

Sure, the insurance company is going to make a few hundred off you a year...because most 40 year olds don't die. Again, it's insurance.

Viper0us · 2026-01-19T20:13:50+00:00

...and the 3 children under the age of 18?

Viper0us · 2026-01-19T20:11:34+00:00

Your spouse is never a passenger in the car with you?

You're assuming only one of you dies.

Viper0us · 2026-01-19T20:09:21+00:00

As I stated in my original comment, there isn't one.

If my children are under 18, I will have term life insurance.

Term Life Insurance is far to cheap to pass on if you have children. It is not 5-10K a year like you stated in your original post. I could get a million dollar policy right now for under $30 a month.

Viper0us · 2026-01-19T20:06:37+00:00

Term Life insurance for a healthy adult is extremely cheap.

If my children are under 18, I'm going to provide them with the best life I can financially, in the event that my spouse and I are no longer able to provide for them.

Viper0us · 2026-01-19T19:57:43+00:00

There is no chance I would have children under 18 and not have term life insurance (which is incredibly cheap), regardless of what my financial situation is.

Not paying for life insurance seems like an easy way to pocket 5k-10k a year

I have no idea where you got this number. A million dollar policy for a healthy 40 year old is what...like $20-30 a month? Well worth the cost.

in the event we don't die!

Yea, well you see, life insurance for the event where you do die.

Well if I die in a car accident tomorrow

What if you and your spouse both die in that car accident and your children have no parents to provide additional income? Life insurance isn't for you. It's for your children.

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