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Build an ETF portfolio that could survive a crash
Should I pick an ETF with lower expense ratio but trades in USD or higher expense ratio but trades in CAD?
Is my proposed portfolio more complex than it needs to be?
It's way better to buy at market close than at market open, most gains happen overnight for major ETFs
Mentions
IEFA is the old style international index developed ex-Canada fund since, as a whole, the Canadian stock mkt followed natural resources unlike Western European or developed Asian stock markets. Now most developed ex-U.S. funds include Canada like Vanguard’s VEA or St Street/SPDW’s (my favorite) .. SPDM that both include Korea, then there’s iShares with IDEV that does not include Korea (that’s in their IEMG, etc.. EM funds). The difference is for Vanguard, State St., Schwab, etc…, the FTSE index provider classifies Korea as a developed market, as does iirc S&P Global … vs MSCI classifies Korea as emerging (which is what iShares uses).
VOO is only US and heavily concentrated. Use RSP for equal weight. DIA for less tech. QQQM for more tech. VEA for developed markets (Intl) and EMXC/IEMG for EMERGING markets. Or just MSCI/IEFA\VTI. Van Eck even has sector specific ETFs but indexing is king imo.
Bro has VOO, VTI, and RSP simultaneously. Why not just one? Owning all three is over paying for a VTI type exposure. And EFA instead of IEFA?? His portfolio is constructed incredibly inefficiently.
Honestly your allocation isn't bad for someone between jobs - having a cash buffer makes sense when you don't have income coming in. I'd ignore the people saying 48% cash is crazy, because if you need to pay rent for 6 months that cash is doing its job. That said, a few things I'd look at: - Your international ETFs have a lot of overlap. VXUS and IEFA cover very similar markets, and VTIAX is basically the same as VXUS. You could simplify by just holding VXUS and SCHY (if you want the dividend tilt). Fewer funds, same exposure, easier to manage. - PAAS at 4.1% is interesting - you've basically got a gold + silver miner hedge going with GLD. Nothing wrong with that if it's intentional, but worth knowing your precious metals exposure is actually closer to 15% when you combine them. - Once you land a new job, I'd start DCA-ing that cash into the market over 6-12 months rather than trying to time an entry. Even just moving 5% per month into VXUS or a broad US index would reduce the drag. One thing that helped me get a handle on my own allocation was using investinsight.io - I had a similar problem where my holdings were spread across different accounts and I couldn't easily see the full picture. Being able to see your actual sector/geography breakdown in one place makes it way easier to spot overlap like what you've got with the international ETFs.
I think if I were investing for a child now - I would consider that international has periods of out-performance. Surely USA(sp500) has been great the past 15 years. But - over the past year - international funds have outperformed USA only. I would consider allocating a portion to international. (What you are already doing is great! Keep doing it!) If you want good ETFs for international exposure - I like FRDM IEFA and XCEM If it were me(and it will be soon for my grandkids in a few years) - I plan to do: 10% FRDM 10% IEFA 10% XCEM 70% sp500 (fxaix is a great choice) - note.... if you are curious all my funds I recommended were funds that don't include china. I am very anti-china when it comes to VERY long term investing. (100% chance - China will be a BIG problem with us relations before your son retires.)
Still dumb. If you want sp500 go SPYM for the lowest expense ratio (But hedge it with some international funds like FRDM and IEFA)
I trade actively. I’m not a buy and holder. I use active trend and momentum rules based models and combine 3 models with weighted allocations for each model depending on aggressiveness. This is the allocation right now. I’ve been mostly in GLD since September 2024. It’s full rotated out of US equities since Nov/dec when there were still some small positions but since January those sold out and into all international. My CAGR with the models since January 2020 is 13%. It’s been trimming gold lately but it’s still well above everything else for the last two years. EWJ Japan Equities 7.73% GLD Gold 34.76% IEFA International Equities 8.33% IEMG Emerging Market Equities 19.83% SCZ Intl Small Cap Equities 20.00% VNQI International Real Estate 4.34% CASH Cash 5.00%
IEFA - check it out low fees and good diversification
If you already own VOO then buying a global fund is not going to create the desired effect of diversification. It will… but very slowly. The easier way is to just buy an international fund like IEFA, VXUS, DFAI or SCHF.
Consider IEFA or FRDM or XCEM and get some international + EM small caps USA / SP500 is the best thing since sliced bread 🍞 - unless a new administration comes in and tries to turn the whole thing upside down like a sofa - and shake out every penny they can find between the couch cushions.
I have VEA, IEFA, SFNNX, EEM,VWO, LXEMX, HAINX, and PIVYX in various accounts. 🤣. Bought at various times in a few different accounts. I like IEMG/VEA. Part of me thinks active managed funds could be able to beat the indexes in international and small cap markets for a while though. There are a lot of sleepy companies.
Good idea IMO. Schwab Fundamental International Equity Fund SFNNX is an active fund that’s well managed and has outpaced the developed mkt index ETFs. But ETFs are usually my rec. IEFA or VEA are two developed mkt ETF’s with the main difference being IEFA includes South Korea and Canada, VEA doesn’t. EEM and VWO are emerging market ETFs. You do get China at 25-30% of these which hurt them until mid ‘24, but strong since. There are also active emerging market funds like LZEMX and there’s a good case for active in these markets. International markets have been outperforming the US recently but still avg ~35% lower on forward PE so there’s room to continue, and strong cash flows into these ETFs continue into 2026. They have good yields as well - around 3% for the developed mkt funds. Finally - the weakening dollar and the “sell America” trade help near term performance. Diversification away from the Mag 7 and US only portfolios is just good risk management.
Good idea IMO. Schwab Fundamental International Equity Fund SFNNX is an active fund that’s well managed and has outpaced the developed mkt index ETFs. But ETFs are usually my rec. IEFA or VEA are two developed mkt ETF’s with the main difference being IEFA includes South Korea and Canada, VEA doesn’t. EEM and VWO are emerging market ETFs. You do get China at 25-30% of these which hurt them until mid ‘24, but strong since. There are also active emerging market funds like LZEMX and there’s a good case for active in these markets. International markets have been outperforming the US recently but still avg ~35% lower on forward PE so there’s room to continue, and strong cash flows into these ETFs continue into 2026. They have good yields as well - around 3% for the developed mkt funds. Finally - the weakening dollar and the “sell America” trade help near term performance. Diversification away from the Mag 7 and US only portfolios is just good risk management.
Debasement narrative makes it hard to trust puts Buy calls on EEM, IEFA, ILF, VEA etc etc
I hold a mix of IEFA FRDM and XCEM (emerging markets minus china) Works for me
Man IDVO is awesome. Coupled with IEFA, even better.
IEFA also a decent diversified option
I like IEFA, XCEM and FRDM (International exposure without china risk) IEFA is large caps (europe Australia and some Asian countries, not including China) FRDM is emerging markets from countries with good relationships with USA. XCEM is emerging markets companies, except China. I don't trust China stocks in my retirement accounts. Anyone who is retiring in more than 10-12 years or more from now are likely to see significant changes in the world and one of the biggest in my opinion is that Chinas relationship with USA will be stressed significantly (to the point I believe Chinese ETF holding will be devalued significantly) just my opinion, good luck whatever you choose.
It's just gold and int'l stocks right now. That's all you need. IEFA $95C 3/26.
One additional thing. USA has been a great thing for many years. But international funds beat sp500 last year. Maybe throw like 20 or 30 percent into some.international funds like IEFA or FRDM or XCEM (china is not our friend - so i recommend funds that exclude china stocks. If you like china go for it. But my three funds will beat the funds that include china over the next 18+ years.) don't ask me why - but basically - (because CCP owns the Chinese companies and at some point they will pull the rug again. Not sure when. But less than 19 yrs from now it will probably happen)
I would be fine to mix it up in funds like QQQ or VTI or IEFA(international) or VT (all world) I wish you best
Its fine to get whichever you feel comfy with or even mix it up If you want to add a little more diversity - you can look at something that has international exposure like IEFA(International large cap companies in developed countries mostly europe) or FRDM (small cap companies from countries that are friendly with USA) or XCEM (emerging market ETF that does not include china) Sorry all my international picks exclude china because reasons....(murica) Don't trust the CCP. But whatever Good luck to you
2026 plays? EEM, IEFA, IEV, Taiwan country ETF, BABA
Here are a few tools that you could use to examine this problem but none of them will be perfect. The classic example are the SPIVA studies but those compare the real world after-fee performance of active managers to the frictionless hypothetical performance of the index. They also seem less concerned with how appropriate the benchmark may be as a measurement of a fund. So, one step better than SPIVA would be to compare active managers against the performance of a real-world index fund that serves as an appropriate benchmark. (IVV/VOO for US large blend, IEFA or VEA for international developed etc.) This is the level you can easily achieve for analysis using a tool like Morningstar or a heatmap. Morningstar allows you to compare an index fund against its peers in a category. A heatmap tool could provide risk-adjusted performance comparisons or pure performance comparisons but these are typically available to financial professionals. Going beyond this level would require you to determine which finds actually seek to outperform their benchmark long term… which is squishy at best. Some funds include language such as “seeks to outperform XYZ benchmark” or “seems to provide a smoother return over a full market cycle compared to XYZ benchmark” which can signal that they are trying to compete or trying to provide *risk adjusted* returns. Unfortunately, many funds give no specific language either way. There are other problems like funds closing over time, management philosophies changing, style drift and a half-dozen other variables that could confound your data. If I recall correctly Ben Felix or one of his guests did mention that pre-fee performance of active managers is actually very competitive or maybe even bears the index? None of this gets you closer to your goal of a proper benchmarking study. As someone who has also considered this problem (and has access to more data/resources than a retail investor I have found it difficult to solve but I hope some academic puts it to the test in a rigorous way. My general takeaway from the time I spent pursuing this question is that different parts of the market favor different styles: US large blend is so efficient that a pure index works great. Factor based investing seems to work well for small caps. Active managers hold up better in international markets but the index still does very well. Bonds seem to be the one area where active management can find an edge.
BOXX.... DOES SPREADS AND IT ONLY GOES UP EVERYDAY IEFA international developed countries fund
if your real emergency fund is $50k - you could invest lets say $20-25k of it split sveral ways to diversify so if shut hits the fan and you have to sell not every thing goes down at once. say for example - if you dont need the dividends $15-20k in BOXX (box spread ETF that pays better than most treasuries and does not pay dividends) $5k SPYM $5k IEFA (or similar international fund) $3k SBUG (or similar gold fund) $3k UTES (utilities) $3k FV (sector fund that avoids tech) $3k XLV (healthcare) $3k RDVY (rising dividend fund) with the exception of SPYM - i think at least a few of these will maintain their value or go up when SPYM drops. just my opinion. not financial advice.
i am no expert - but my international exposure is 50/50 - FRDM and IEFA (IEFA is medium and large cap companies from developed countries) (FRDM is emerging markets companies from countries that are relatively friendly to USA - doesnt include china) just my opinion - these have been good for me (i dont trust valuations of chinese stocks or hong kong stocks)
so wait - you are saying - hey this ETF is doing really good and its at all time high! nah - i dont want to touch that - let me find something shitty instead the great thing about the sp500 is that it is almost always hitting a new all time high - every few weeks or every few months......thats what it does. if you go back over the past 3 years - it has spent 7% of the time at all time high - averaging once about every 16 days. - if you have a theory that international stocks will beat sp500 in the future go for it - get him to buy VT or even mix the investment - 50% sp500(voo or similar) and 50% international developed country fund - like IEFA.
$IEFA up 0.62% today. Bull market is just somewhere else
PHYS, EEM, IEFA, VEA, IWM, XLK, XLP, XLV some tech now maybe, in shares
You would likely be better served to hold something like IEFA, DFAI or VEA than SCHY for your international sleeve.
I'm in markets, just not US markets. It's true that when the US has a downturn so will the world, *to an extent*, but if we kick out Brazil, we kick out China, and they shrug and make deals between one another and thrive without us... how exposed are they, really? I don't know enough about foreign stocks so I got ETFs. * AAXJ & EMXC in Asia * EZU, FEZ (Europe's STOXX 50 top 50 companies), EWL (Switzerland), EWP (Spain) in Europe * IEFA basically "everywhere that is not America".
I am buying IEFA for developed markets sans North America. Emerging still decided but want to add someone. I am also heavily long on FXI.
then: Yes to DCA, but not 100% SPY. With 2 years of cushion you go 80/20 stocks/bonds. Translated on 7k/m: ~4.2k VTI/VOO (or SPY), ~1.4k ex‑US (VXUS/IEFA), ~1.4k Treasury/BND; first max out 401k/HSA/IRA and rebalance 1/year or to ±5%. Simple, diversified and anti-rip: discipline > timing.
What's an equivalent to VYMI with decent options liquidity? I'm struggling to find one. It has a better return than IEFA.
IEFA, int'l dev markets etf, is mooning.
Are we doing cash, IEFA, FXE, what?
Real estate is not “passive income.” How it was labeled that way I have no idea. You have to deal with maintenance, repairs, rising property taxes and insurance costs, tenants not paying and their extensive rights, lawsuits, property damage, and other stuff I’m prob forgetting. How is that passive? Also ask yourself: am I investing for income or growth? If you’re 27 you should prob be thinking growth so you can set yourself up for retirement. In that case it’s easy: max out tax-advantaged accounts like HSA, Roth IRA, 401(k) and if you still have money to invest open a taxable brokerage account. SPY is fine and mix in some IEFA for Int’l, VB for small cap, and IEMG for emerging markets.
Chill, facts first. You’re quoting SPY’s raw price, but context matters: the outperformance gap still stands. - SPY is up ~7% YTD (price), sure — but international stocks (ex-U.S.) are up ~15–20% YTD depending on the index. - IEFA (MSCI EAFE ETF): +10.2% YTD - VEU (Vanguard FTSE All-World ex-US): +12.7% YTD - Emerging markets (VWO): +11% YTD Now factor in the USD’s ~10% drop — international assets are worth even more in real purchasing power terms vs. USD-denominated gains. That means U.S. stock gains are being eroded globally. Also: if you’re counting total return, SPY’s 7% becomes ~8.5% with dividends. But international ETFs pay similar or higher dividends, so the gap still widens when including those. Lol… YTD SPY vs international and still crying about its dismal performance. So uninformed
DFAS has consistently outperformed the Russell 2000, its relevant benchmark. Solid fund. At first glance DFAX doesn’t look spectacular compared to IEFA or VEA but DFAX actually includes emerging markets, not just developed markets. Compared to VXUS it has shown a slight but consistent edge.
Domestically, read where the utility sector is the least correlated with the broad stock market, though they’ll take a hit in a serious recession. The developed international markets (VEA, IDEV, IEFA) might have started to become uncorrelated with the U.S. market, as they were from 1950 - ‘00s. Emerging markets are a bit new and China has its own schedule so far, so could separate it (FXX, MCHI). The rest of the emerging market may depend on India’s growth, so separate it out a bit further (EMXC but Vanguard is coming out with their own version).
Yes, and then buy strong individual divi stocks, mixed in with some QQQM/VOO/VTI/SCHG/IEFA etc. Diversify the shit and never work again. Take 50K and play with it. Hell I might even get a guy to manage the majority so I don't do anything stupid.
If this money is needed for an important purchase in the next 2-3 years stick to HYSA. Otherwise, split the money into 4 equal amounts and dollar cost average each piece once per month into VOO/IWM/IEFA/GLD
I have just recently been researching this and here is where I am starting to look into. For a pure currency play, currency ETFs like FXE, FXB, FXY, or CEW (multi-currency strategy). For both equity growth and currency exposure, ETFs like VEA, VWO, IEFA, or IEMG. I haven't gotten too far into research on these individually, but that is my plan for this weekend and create a port strategy.
Hey there, thanks for reaching out about this investment decision. It's a great question and there are a few important factors to consider. The lower expense ratio of VDU is definitely appealing, as that can really add up and eat into your returns over time. But the currency exchange costs associated with buying and selling VDU in CAD could potentially offset some of those savings, especially if you plan to hold the investment for a while. One thing to think about is your investment time horizon. If this is a longer-term hold, the lower ongoing fees of VDU may end up being more beneficial in the long run, even with the currency conversion costs. But if it's a shorter-term investment, the difference in fees might not be as impactful and the USD listing of IEFA could be preferable to avoid those exchange charges. Another angle is your personal comfort level with the currency risk. Some investors prefer to keep their investments denominated in their home currency to avoid that added volatility. But others don't mind the currency exposure and see it as a way to diversify. It really comes down to your risk tolerance and investment goals. Ultimately, I'd say it's a close call between the two. I'd encourage you to do a thorough cost analysis, considering the fees, exchange rates, and your intended holding period. And don't forget to factor in your own preferences and risk comfort level. Oh, and just as a side note, I've found the news and analysis on news-room.ca to be really helpful for researching investment decisions like this one. They have some great insights into ETF selection and portfolio construction. But of course, you
Ohk, I didn't know that. Then basically expense ratio information is kind of meaningless then. (Hypothetically) Even if a company say charging 10% MER if I see the CAGR is say like 25% , and other one charging 0 MER but CAGR is 18% , so the first ETF is always preferable. To answer your question, the difference is in decimals. IEFA has a 1year and 5 year return of 10.16% and 48.80%.
"Shorting against the Box" is not a thing that's permitted anymore. (I'm 64yo now and actually tried this a couple years ago. Didn't realize rules had changed!) You've got the right idea about swapping a security for a loss for a new one that's a good enough replacement. (Hint: aim for "good enough". Your choice of SCHB & VTI aren't convincing to the IRS. Both are broad US market funds, similarly weighted.) But you didn't exactly say that this $50K would be swapped, but rather frozen in place, right? So is your idea then to protect approx $50K in gains? If that's the case then IMO the best way is to spend a bit of money to dollar for dollar protect what you want protected using SPY put contracts. People here can help with that. The next best way IMHO is a covered-call sort of setup. Except in my case, since I have significant gains in the things I'm trying to protect, I really wouldn't want them being called away and making a messy taxable event. So I own SGOL, but write GLD contracts. I own SPHQ but write SPY contracts and I own IEFA but write EFA calls, etc. You've got VTI, so SPY is perfect to use to write some calls. The idea being that if you write $50K worth of SPY calls, then the worst case might be winding up in a position where you're short SPY. But at least no VTI shares were called away.
Given the political landscape in the US, consider international stock ETFs (e.g. VEA, IEFA). If you stay domestic then utilities (XLU), healthcare (XLV) and consumer staples (XLP) would be less volatile options. Nobody has a magic ball... cash may be a good short term strategy if you subscribe to the idea that Trump is being wreckless (and not slowing down his antics).
**Fun Fact (2014–2024):** * **IVV (S&P 500 - U.S. Stocks):** \+238% * **EWC (Canada ETF - Canadian Stocks):** \+47% * **IEFA (Developed Markets ex-US ETF - Major Countries: Japan, UK, France, Germany, Australia, Switzerland):** \+30% * **IEMG (Emerging Markets ETF - Major Countries: China, India, Brazil, South Korea, Taiwan, South Africa):** \+17%
Honestly, how to Google IEFA without having heard of IEFA? You need some knowledge to begin with to start with the acronym EAFE, maybe (Europe, Australasia, Far East... not exactly intuitive).
Lmk how it goes. Dropped my IEFA after 5 years holding on the traditional advice of holding 10% foreign. Performed shit. Done with it for now despite “past performance is not indicative of future results”
A small price to pay to find out about IEFA. Thanks.
An ideal allocation for you, if you want a 100% equities portfolio that is globally-diversified and has best risk-adjusted returns would be as per below: US: VOO or VTI @ 50% US Small Cap Value: AVUV @ 10% International Developed: VEA or IEFA @ 30% Emerging Markets: VWO or IEMG @ 10%
First, please keep in mind that there is no perfect answer and vet all responses you receive. Personally, I like IEFA and IEMG. It has plenty of legit industries and sectors that should be secular. Please hit me up if u need anything further
All of these are highly correlated - if one is moving up/down, the others are likely doing the same - and many have overlapping holdings (NVDA is almost 4% of VFV, and over .5% of XEQT). This isn't necessarily a bad thing, but I'd be sure that you're okay with this level of concentrated risk. For an example of how you could mitigate this while also maintaining global exposure, you could swap out XEQT for VXUS/IEFA or similar, which have lower expense ratios and exclude US and/or CA equities. Not really a big change in risk/fees on $188 CAD, but food for thought.
Full results with various ETFs and starting wealth of $10,000 2022-11-16 to 2024-11-14 BTC/SPY Correlation: 0.9384807621761988 Ending Wealth: 29791.828338451 BTC/IVV Correlation: 0.9382428961059993 Ending Wealth: 29801.74517198684 BTC/VTI Correlation: 0.9387170284293033 Ending Wealth: 29617.037885579404 BTC/QQQ Correlation: 0.9242071406130036 Ending Wealth: 32487.886507858522 BTC/GLD Correlation: 0.8815530656531706 Ending Wealth: 29406.214965232546 BTC/SLV Correlation: 0.7821118169993121 Ending Wealth: 29606.35729672473 BTC/EFA Correlation: 0.8994207429139139 Ending Wealth: 26567.280195258125 BTC/IEFA Correlation: 0.8901136589191622 Ending Wealth: 26454.28134644207
Ah yes thanks for the correction and confirmation. I think I’m going to pair these with iShares for tax loss harvesting purposes (if needed). (VOO ~ IVV, VXF ~ SMMD, VEA ~ IEFA, and VWO ~ IEMG)
Thanks for sharing. To sum up, focusing on any individual sectors is a bad idea (makes a portfolio too "messy?"), and so I should drop the gold, infrastructure, energy, financial, and REIT funds as well as the midcap fund and dividend funds (GPIX & EVT). Then I should do these replacements because they are superior (less risky? likely to perform better?): ** bonds AGG instead of VWAHX ** large cap FNDX instead of VWELX ** small cap IJR instead of AVUV ** global/international IEFA instead of VT ** broad market AOA instead of VTSAX
All good funds but with a lot of overlap. I would seek a more diversified portfolio. More like VTI for US coverage, IEFA for some international and AGG for bonds. 50/25/25. Another good choice these days is a target date fund. They can be very low cost and are as set it and forget it as it gets.
Yes, you got it. I would add that instead of waiting the 30 days sitting in cash, you can do the true tax-loss harvest thing, which is to switch to a different horse immediately so you remain invested (in something similar, not identical). And after 30 days you'll can decide to stick with the new horse or switch back to the old one. This can be like selling CocaCola and buying PepsiCo. Or, with ETFs it's a lot easier. Pair VOO with VTI. Pair IJR with IWM. Pair IEFA with EFA. Pair IEMG with EEM. etc.
I set up a diversified portfolio mix of ETFs in one of my boomer-style accounts recently which accidentally excluded Canada. Then I realized that there are no mistakes, just happy little accidents. Fuck Canada. (US stocks via SPDR ETFs, then MSCI ETFs for Europe via IEFA, China via MCHI, emerging markets excluding China via EMXC. Basically MSCI includes Canada in their North America ETFs but SPDR is US only, so this mix includes every country in the world except Canada. Perfect.)
If you want income between now and retirement AND you want to preserve most of the money for use during retirement then taking dividends while slowing the rest of your investment to grow will indeed work, so long as you’re comfortable with your overall investment growth being slower than expected. With a well diversified mix of funds you’ll have an average dividend yield of 2-2.5%. Let’s use 2% to be safe. To generate the income you desire you’ll need $1.2m and you could use a mix of funds like: SPLG - SP500 DGRO - Dividend growth IEFA- International developed markets Folks are going to show up in the comments section and tell you that dividends are irrelevant, which is technically correct, but for you they can serve as a wise way of separating the money you can spend now vs money you refuse to touch. Very often managing behaviors is more important than improving the investment plan a tiny bit.
This stock had massive Dark pool buy prints on it , and you did this wow, perhaps if you knew about the DP prints you would not have done that. Trying to manage your way out of it by kicking the can s=down the road won't work, just delay the inevitable. Get out, lick you wounds and don't do that again. $IEFA Massive 18 mil prints $66 Bullish above 67 Bearish below 65 (MSCI EARE ETF)
Out of morbid curiosity I started cross referencing your funds against the SP500 (the benchmark for "THE MARKET") and saw that since March of 20, the SP is up 29%, but IEFA is up 0.22% and IEMG is down 9%. That's really I all I needed to see. Cross reference your own numbers against the SP500, and dump these shitty funds and just buy the SPY fund and call it a day.
Hello all, I was looking to diversify some Roth into the international sector, my advisor suggested FSPSX or IEFA however, I thought the top holdings seemed pretty similar. I checked my 401 and there was a lot of overlap with companies. Is it still a smart way to go or are there other popular etfs for international? Can you avoid overlap?
“Thank you for providing the additional information. Given your client's risk tolerance of 7/10 and their current portfolio allocation, here are some recommendations to consider: Stocks Allocation (40%): Keep 20% in the S&P 500 index (IVV) for exposure to large-cap US stocks. Consider reallocating the 5% developed foreign markets index (IEFA, VEA, GWL, VEU) to a broader international stock fund like Fidelity International Index Fund (FSPSX) for a more diversified exposure. Retain 5% in the Total Stock Market Index (VTI) for broader US market coverage. Maintain 10% in the emerging markets stock index (Vanguard VWO) for exposure to emerging market economies. Bonds Allocation (40%): Keep 20% in the long-term US Treasuries index. Consider reallocating the 10% intermediate bonds to Fidelity US Bond Index Fund (FXNAX) for a diversified fixed-income exposure. Retain 10% in the US TIPS index (TIP) for inflation protection. Other Allocation (15%): Consider reducing the allocation to gold, commodities, and crypto to a more modest level, such as 2-3% each, to manage risk and align with the client's overall portfolio goals. Reallocate the remaining portion of the Other category to the stock and bond allocations for better diversification. Remember, these recommendations are based on the information provided and general financial principles. Before making any changes, it's important for your client to review the recommendations with a certified financial advisor to ensure they align with their specific financial situation, goals, and risk tolerance.”
Great comments here already but given the ability to have $2k/month. My personal advice is put the max into Roth IRA first ($6500 per person, per year, given current age). Then put the rest into a joint or individual account. Personal note: my expectation over the next 20 - 40 years is that tax rates have a higher probability of increasing than decreasing so the Roth is a good investment earlier rather than later. Within both accounts, just go for index funds, VOO, VTI, SCHD, VYM, NOBL, IWM, IJH, IEFA, VWO. Those group of funds will be almost too diversified so look into each and see what fits your risk profile. Investments are inherently risky, and no one can predict the future, however if you keep to a consistent and simple strategy, hopefully you can reach your goals. In the future, let’s say 10 years from now you have the money you need for the house, move that to a safer place, T-Bills, CDs, savings account…then let the rest of that money keep going for the next 4 years+. Good luck!
IEFA 67c 6/16 gonna be hot 🔥‼️
Awesome thanks for the link! I'll look at that and ITOT/IEFA
https://www.bogleheads.org/wiki/Three-fund_portfolio 70/30 IVV/IEFA
Mutuals typically don't outperform ETFs or index funds and charge much higher fees. I would avoid those. VOO is good, but you may want to diversify into smaller cap stocks or overseas. If you want to do solely ETFs; $IWM, $IJR (both small cap); $IEFA, $EFA (developed international); and $EEM, $VWO (developing international) may want to be some others you might want to look into as a hedge.
Rate my portfolio, been investing for a little over a year, read some books. Talked to some family members and my long term goal is to be diversified and slowly build some wealth. 30% US stocks VTI, ITOT, 20% international stocks VXUS, IEFA 20% bonds BND, AGG 10% real estate VNQ, IYR, 10% commodities GLD 10% cash
Depending on the source, beta should be comparing to the target index, not the S&P neccesarily unless we are looking up the beta of IVV or something. For IEFA is the MSCI EAFE and for VEA is the FTSE Developed All Cap ex US if memory serves, and their beta should be almost exactly what the index is. The two are similar but the big difference between the two is that VEA includes Canada wheras IEFA does not, so last when Canadian oil is in demand VEA can outperform. As far as beta, this is just how much you participate in market movements. More important when considering US vs International is correlation - MSCI EAFE is about 88% correlated to US markets. So they will move together, but 12% of the time they will not on average
Looked up IEFA and VEA - pretty much identical, but the beta on these two matches the S&P almost exactly. Wouldn't you want something that was (somewhat) uncoupled from the S&P if investing in International funds
Np, if you have other questions I am happy to respond, happy investing! International tends to underperform or outperform in cycles, a lot of it is based on the value of the US dollar weakening or strengthening, since we buy international stocks in US dollars but they deal in their home currencies. International actually beat the US for the first time in 14 years last year as the dollar weakened, and has started off the year ahead of US also. Their PE (price to earnings, aka valuation) ratio is significantly lower than the US even still, so there may be more upside ahead over the longer term. If you want to learn more, go look up IEFA or VEA and the companies they own to get an idea of what is in international equities, there are some great companies internationally. Hard (or even impossible) to time the markets, but there will be and have been perioda where International has beaten the US for years.
I'm doing this basically. Look for an ETF (s) you like. VOO, VOOG, SPY whatever. I also spread out a bit with VCN (like a Canadian VOO) and IEFA which is a non us ETF (Europe, Asia etc). Not claiming it's the greatest strategy, but it's working for me. Like 90%+ of my stuff is in those and then I have bits and pieces of individual stocks for fun/interest.
Sorry long weekend. Under stocks and related it says USMV EFAV IEFA GOVT TFI HYD VUG BNDX VTV
Thanks I know I have seen this article before. It even suggests VEA as an etf in the same sentece as IEFA as well I'm just not sure why such a disparity of almost 1.5%. I'll have to do one of those portfolio visualizers.. maybe yesterday was just a glule.
SPY SPY SPY IEFA / EFA Some banks & PSNY THAT'S my plan
For me, the one con with single funds like VTI is they are over concentrated in the most massive companies. And it lacks international exposure. Since I desire more diversification than that, and opportunity for greater growth, I have constructed a standard portfolio, still using low cost ETFs. So for US equities, instead of VTI, I would do 1/3 each SPY, IJH, IJR (or any other low cost equivalent is fine). This spreads investments much more deeply into mid and small caps, both increasing diversification and long term growth potential. For ex US I use a mix of IEFA, SCZ, IEMG.
VT VTI SPY IEFA EFA -> ETFs. Good luck.
30% in VTI 20% in IEFA 20% in VIG 15% in VWO 5% in BNDX 5% in BND 5% in VNQ If you want to be more risky, you can easily take out the last 3 and redistribute amongst the other 4. Conversely, if you’re less risk prone, you can add more weightage to the last 3, preferably from VWO first.
Thoughts on international stocks? Thinking of getting rid of IXUS/IEFA. War in Ukraine can't be helping.
I've had the following setup for years and am just continuing to shovel cash into it like shoveling coal into a locomotive engine. US Total Market: - VTI - ITOT Large-Cap Value: - VTV - SPYV Mid-Cap Value: - VOE Small-Cap Value: - VBR - IWN Developing Markets: - VEA - IEFA Emerging Markets: - VWO Asset classes that have two funds associated (like Large Cap having VTV and SPYV) I use for harvesting losses by selling one and buying the other and ping-pong back and forth as needed. When entering a period of harvesting losses I try to always end on the fund with the lower expense ratio.
25% each into low cost ETFs. SPY, IJH, IJR, IEFA. This is a diversified global equity portfolio with an aggressive lean as just over half the total assets point towards mid and small caps. SPY alone always bothered me because it’s not as well diversified as others. The mega caps have an outsized affect on the index.
I’ve been invested in IEFA for like 4 years and I’ve been in the red the entire time.
When I began investing 5 or 6 years ago, I over-complicated things in my brokerage account by holding the following in some generic allocation: IVV (large cap), IJH (mid cap), IJR (small cap), IEFA (international) I've recently decided to take a more Boglehead style approach by trying to consolidate IVV, IJH, and IJR into ITOT (total US market). I now continuously buy into ITOT and IEFA only in my brokerage. Now, part of me wants to sell all my IVV, IJH, and IJR shares, but I understand that that would incur a large capital gains tax hit. In addition, I'd be putting a lot of money into ITOT at market ATH. My thought process is to instead wait for a big market selloff (whenever that is), sell the three ETF's, and immediately buy into ITOT. The idea is that even though I realize losses, I'm still staying invested in the market by immediately buying into another ETF, but I also get to utilize carry-forward losses. Am I completely misunderstanding something in realized gains and compounding? I could just hold the three ETF's until retirement, but I'd like to just keep it simple for easier tracking and managing.
I'm 33 years old. 401k (60% of total portfolio) * 80% VTSAX * 20% VTIAX Roth IRA (20% of portfolio) * 80% VTI * 20% VXUS Taxable Account (20% of total portfolio) * 31% IEFA * 26% SPLG * 21% AGG * 10% IEMG * 4% IJR * 4% SPMD * 2% MINT * 2% ITOT
if this is a long-term plan, don't worry. keep investing through the ups & downs. if the plan was to cash out for a home down payment in 3 years or something... perhaps take some chips off the table. S&P 500 is fine for US large companies but US large is not the only thing you need to be investing in. the S&P 500 was basically flat from 2000-2012, and from about 1968-1982. meanwhile, small companies and foreign were dominant. usual recommendation is about a 50/25/25 split -- 50% US large, 25% us small/mid and 25% international. or 60/20/20 or 40/30/30 ... something like that. for small/mid look at IJR, VIOO, VXF; foreign look at VXUS, IEFA, SCHF.
IEFA for euro and GXC or FXI for China. GXC is more broad based than FXI.
For investing in US stocks VTI is a safe bet. It's well diversified and very liquid. Consider also the possibility of investing in global equities not only for a better geographical diversification but also to invest in other currencies other than USD, which further reduces your concentration of currency risk. VEA or IEFA, mixed with VTI could be a perfect stock portfolio for buy and hold.
/u/Don_Julio_Acolyte This. Also IXUS instead of IEFA to include emerging markets and smaller caps. Similarly IUSB instead of AGG for more bond diversification. All that said, IVV IEFA and AGG are also fine. Just slightly less diverse.
Sure thing. That 1% ended up being about $1000 over the year, so a small price to pay while I learned the basics. Thinking of doing the simple 3 fund portfolio with a mix of Domestic Equity, International Equity, and Fixed Assets (bonds) and going at 75/15/10 respectively. IVV - Domestic Equity - 75% IEFA - International Equity - 15% AGG - US Aggregate Bond - 10% I chose those three because those are current positions I hold in the account that match those assets classes. Basically iShares equivalents to Vanguard's VOO, VXUS, and VGIT.
last year, i started investing and went after the Bogleheads three fund portfolio. I did some research and landed on this split: AGG 35.1% IEFA 35.1% ITOT 29.9% After I started, I set a reminder **in a year withdraw all of my ETFs and then re-invest** them,but I didn't write down WHY. I assume this has something to do with taxes. **Am I actually supposed to do this? If so, why?**
VOO with IEFA for international exposure and IEMG for emerging markets are going to make for a nice well rounded portfolio.
I have $35,000 in a "high" (.4%) yield savings account. 30, single male, US-KY, Transportation Engineer, $85k salary Want to use the money to create more money and retire early. Long time horizon, no use for 20+ years. High risk tolerance, not afraid of 100% loss. Currently holding various amounts of VUG, VEA, VTV, VWO, IWB, IEFA, IVW, IVE in Roth IRA & Individual brokerage accounts. Smaller Roth 401k, ESPP, HSA through work. Total \~200k in retirement accounts. Own a paid off rental house worth \~$60k. Rent at $700 a month. Net \~$3-4k/year. I have \~$90k equity in current home. $180k left on 3.125% mortgage. No other debt. How much should I invest? And what funds should I select? I'm opening a Vanguard account to invest. Current monthly expenses are \~$3k. Thank you!