Here’s my quarterly update on my current investment holdings as of July 2021, including our 401k/403b/IRAs, taxable brokerage accounts, and savings bonds but excluding our house, cash reserves, and a small portfolio of self-directed investments. Following the concept of
Actual Asset Allocation and Holdings
I use both Personal Capital and a custom Google Spreadsheet to track my investment holdings. The
Here are updated performance and asset allocation charts, per the “Allocation” and “Holdings” tabs of my Personal Capital account, respectively:
Vanguard Total Stock Market (VTI, VTSAX)
Vanguard Total International Stock Market (VXUS, VTIAX)
Vanguard Small Value (VBR)
Vanguard Emerging Markets (VWO)
Vanguard REIT Index (VNQ, VGSLX)
Vanguard Limited-Term Tax-Exempt (VMLTX, VMLUX)
Vanguard Intermediate-Term Tax-Exempt (VWITX, VWIUX)
Vanguard Intermediate-Term Treasury (VFITX, VFIUX)
Vanguard Inflation-Protected Securities (VIPSX, VAIPX)
Fidelity Inflation-Protected Bond Index (FIPDX)
iShares Barclays TIPS Bond (TIP)
Individual TIPS bonds
Target Asset Allocation. I do not spend a lot of time backtesting various model portfolios, as I don’t think picking through the details of the recent past will necessarily create superior future returns. Usually, whatever model portfolio is popular in the moment just happens to hold the asset class that has been the hottest recently as well.
I believe in the importance of doing your own research and owning productive assets in which you have strong faith. Every asset class will eventually have a low period, and you must have strong faith during these periods to truly make your money. You have to keep owning and buying more stocks through the stock market crashes. You have to maintain and even buy more rental properties during a housing crunch, etc.
Personally, I try to own broad, low-cost exposure to asset classes that will provide long-term returns above inflation, distribute income via dividends and interest, and finally offer some historical tendencies to balance each other out. I have faith in the long-term benefit of owning publicly-traded US and international shares of businesses as well as high-quality US federal and municipal debt. I also own real estate through REITs.
Again, personally, I simply don’t have strong faith in the long-term results of commodities, gold, or bitcoin. I own my own house, but I choose not to participate in the higher potential gains but also higher potential risks (of both requiring more time and money) of rental real estate.
My US/international ratio floats with the
- 43% US Total Market
- 7% US Small-Cap Value
- 33% International Total Market
- 7% Emerging Markets
- 10% US Real Estate (REIT)
- 33% High-Quality Nominal bonds, US Treasury or FDIC-insured
- 33% High-Quality Municipal Bonds
- 33% US Treasury Inflation-Protected Bonds
I have settled into a long-term target ratio of 67% stocks and 33% bonds (2:1 ratio) within our investment strategy of buy, hold, and occasionally rebalance. I use the dividends and interest to rebalance whenever possible in order to avoid taxable gains. I plan to only manually rebalance past that if the stock/bond ratio is still off by more than 5% (i.e. less than 62% stocks, greater than 72% stocks). With a self-managed, simple portfolio of low-cost funds, we can minimize management fees, commissions, and taxes.
Holdings commentary. The world seems to have stabilized since the March 2020 market drop and overall panic, but I try not to get too attached to these numbers. They seem too good to be true, even as things continue to open up. All I can do is listen to the late Jack Bogle and “stay the course”. I remain optimistic that capitalism, human ingenuity, human resilience, human compassion, and our system of laws will continue to improve things over time.
I would like to note that when few people were paying attention, TIPS have had a pretty good run for an insurance-like investment. The iShares TIPS ETF (TIP) went up 8.3% in 2019 and 10.9% in 2020. The 10-year breakeven inflation rate between TIPS and Treasury is currently about 2.3%. I’m still happy owning a chunk of my bonds as TIPS.
Performance numbers. According to
I’ll share about more about the income aspect in a separate post.
“The editorial content here is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone. This email may contain links through which we are compensated when you click on or are approved for offers.”
Copyright © 2004-2021 MyMoneyBlog.com. All Rights Reserved. Do not re-syndicate without permission.
[yuzo id=820442 ]