Hi, I'm 29, and I've been a passive investor up until now (my bad), but now that I have some income stability, I want to build a simple portfolio. I like the 3-fund approach, which has some international exposure, but I might not include bonds at this point (should I?). Right now, I've invested in VTI, VOO, and QQQ, but the international mix is missing. I'd really appreciate some advice on readjusting this mix! 🙂
VTI, VXUS, QQQ – 3 Fund Portfolio Critique
byu/qualifiedoasis ininvesting
Posted by qualifiedoasis
5 Comments
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)
what you want is VT, i mean u really can’t go wrong with any of these. just pick one and dca long term, vt voo vti
This isn’t a Three Fund Portfolio, this is just a portfolio with three funds unfortunately. A three fund is total US market/total international natket/bonds, what you have is US large cap/US total market/US large cap tech (for which QQQ is a bad fund anyway).
You could do VTI/VXUS or VT for your stock portion, and from what I gather from the rest of your post youd be too aggressive for bonds. Those can wait until your 40s/50s given that you have a very high risk tolerance. If you dont 10% into bonds wouldn’t hurt, and it’d improve risk-adjuated returns greatly.
In my opinion you are too young for bonds.
If you want the “perfect” balanced portfolio do VTI and track the total global market performance.
Since you are young and I imagine you are open to some risk you can prioritize the US Market and Tech:
QQQ 40% VOO 40% & VXUS. 20%.
Yes, QQQ & VOO overlap, but it’s not a sin as long as you know you are actively prioritizing US Tech in this setup and believe in US Tech companies for the long run.
If you want even more diversity and are open to other asset types you can add small-cap stocks (i.e Russel 2000), Gold ETF and some Bitcoin exposure (i.e IBIT).
For example:
QQQ 30%
VOO 30%
VXUS 20%
Russel 10%
Gold 5%
Bitcoin 5%
Either case look for a long-term investment horizon (15 years+) and DCA whatever portfolio you choose, don’t time the market and don’t panic sell. You should do well with either.