Background
Over the past two years or so, I’ve given myself a crash course in investing after having little to no interest in finance for the first good chunk of my life. After consuming a ton of Boglehead literature and podcasts, I felt ready to marry my Small-Cap Value tilt of 30%. (I believe it was Rick Ferri that said if you are going to SCV tilt, be prepared to marry it.) I set everything up, wrote an Investor Policy Statement, created an elegant rebalancing spreadsheet, the portfolio has done fine…
And now here I am absolutely convinced that I want a divorce. I’m embracing simplicity once and for all, and I can’t see myself looking back. If a year or so of underperformance has me wavering this much, then it seems like SCV tilting is not for me.
My plan is to go VT in my tax-advantaged and 60/40 VTI/VXUS in my taxable. (I’m more than 20 years from retirement. I will potentially add fixed income later.) My portfolio is now roughly 50% in tax-advantaged, 50% in taxable.
My plan, in five steps:
1. In taxable:
Sell all my AVDV and AVUV holdings as soon as the holding period for each lot exceeds one year. I’m aware I will owe long-term capital gains taxes. Buy VTI/VXUS immediately.
2. In tax-advantaged (Roths, tIRA, 401k)
Sell everything that’s not already VT.
Buy VT.
In 401k where VT is not available, buy a close approximation (60/40 US/Ex-US).
3. Update Investor Policy Statement.
4. Rebalance taxable once a year.
5. Enjoy life.
Questions:
1. Is it sensible to use 60/40 VTI/VXUS as a proxy for VT? I’d like to be rules-based with annual rebalancing.
2. Is there anything else I should consider before making these moves?
Over the past two years or so, I’ve given myself a crash course in investing after having little to no interest in finance for the first good chunk of my life. After consuming a ton of Boglehead literature and podcasts, I felt ready to marry my Small-Cap Value tilt of 30%. (I believe it was Rick Ferri that said if you are going to SCV tilt, be prepared to marry it.) I set everything up, wrote an Investor Policy Statement, created an elegant rebalancing spreadsheet, the portfolio has done fine…
And now here I am absolutely convinced that I want a divorce. I’m embracing simplicity once and for all, and I can’t see myself looking back. If a year or so of underperformance has me wavering this much, then it seems like SCV tilting is not for me.
My plan is to go VT in my tax-advantaged and 60/40 VTI/VXUS in my taxable. (I’m more than 20 years from retirement. I will potentially add fixed income later.) My portfolio is now roughly 50% in tax-advantaged, 50% in taxable.
My plan, in five steps:
1. In taxable:
Sell all my AVDV and AVUV holdings as soon as the holding period for each lot exceeds one year. I’m aware I will owe long-term capital gains taxes. Buy VTI/VXUS immediately.
2. In tax-advantaged (Roths, tIRA, 401k)
Sell everything that’s not already VT.
Buy VT.
In 401k where VT is not available, buy a close approximation (60/40 US/Ex-US).
3. Update Investor Policy Statement.
4. Rebalance taxable once a year.
5. Enjoy life.
Questions:
1. Is it sensible to use 60/40 VTI/VXUS as a proxy for VT? I’d like to be rules-based with annual rebalancing.
2. Is there anything else I should consider before making these moves?
Statistics: Posted by RetiOpening — Sun Jun 16, 2024 5:00 pm — Replies 21 — Views 1263