Here is a look at my current portfolio. I re-balance the portfolio two times per year, in January and June.
I am in no way suggesting you use this exact portfolio, but I want to be transparent and also show that it is possible to construct a solid, well-diversified portfolio with minimal cost.
As you can see below, currently I have an 80/20 stock/bond split.
Within my stock allocation, my Domestic/International split is 70% Domestic and 30% International.
Of my Domestic stock, 18% is in REITS, 9% in Vanguard Health Care Fund (my only actively managed fund) and the rest (73%) in Vanguard Total Stock Market Fund.
All my International stock is in Vanguard Total International
My bonds are split between TIPS (Treasury Inflation Protected Securities) and Vanguard Total Bond Market Fund. TIPS are also considered actively managed but I don’t view them that way. They are simply a hedge in my portfolio. I allow myself 5% of my overall portfolio as “play money.” Money that can be invested in something other than index funds that you think will beat the market. Strategy for this is owed to The Boglehead’s Guide to Investing.
Active vs. Passive
I have 87.2% of my assets in Passive Index Funds. I actually wouldn’t consider the TIPS active, as I mentioned earlier, but they have been included that way. To state again, I allow myself 5% of my overall portfolio as “play money.” Right now that is invested in Vanguard Health Care Fund.
The expense ratio for my portfolio is 0.10%. You can see this against the industry average of 1.02%. It is also lower than the Vanguard average of .18%.
That means that if I return the market at 7%, I will go home with 6.9%. Not bad considering the alternative!!!
This information is not meant to be indicative of what you should do with your portfolio. That is for you to decide (along with your fee-only RIA, which I recommend) as you engage with and read the blog and the recommended reading I have provided. This is meant to be transparent and to prove that it is possible to develop a well diversified portfolio with Rock-Bottom Costs.
Any questions or comments related to any of this please feel free to email me at firstname.lastname@example.org