[Jeff]

I’m currently with empower (formerly personal capital). They sold me on the idea of lessening sequence of return risks by investing in individual stocks balanced across sectors, bonds, and alternatives. I’m about 70% equities. Counted up about 110 individual stocks and then about 20 ETF’s representing various bonds, foreign stocks, and alternatives.

I’ve watched really close and have been pretty happy comparing performance to how I would be doing with, say, VTI and BND. The last week or so, however, I’ve been lagging behind, and I believe it’s because, as we all know, picking stocks is a fools game. My idea was, even if the market is weak, I could pull from stocks in a sector that was up or not down as much allowing the down sectors to recoop.

Keeping this in mind, is there a way for me to manage my portfolio myself, avoiding the high fees?

I’d like to stay balanced among sectors but would like to do so with ETF’s rather than individual stocks. I’ll admit I haven’t even started looking into sector ETF’s, but was hoping to get some good direction from this group.

[Mike]

Just buy VTI or VTSAX or FZROX… and forget about the rest. They are trying to sell you their service and they will make it extremely complicated and make you feel like you can’t do anything on your own. Buy a total market index fund and beat all advisors over a 10yr period.

[Aaron]

Trying to evaluate your portfolio based on week to week returns compared to a benchmark sounds extremely unpleasant . The concept of trying to pull from sectors that aren’t down does sound interesting. For me stocks aren’t my main thing so I just do vti and a and p 500 indexes . Very low fees and seems fine .

[Angelo]

Check out Risk Parity Radio. I assume you are in the drawdown phase or close to retirement.

[Frank]

You’ve got “difference” and “diversification” confused. Just owning “more things” is not better. You would be better off with a smaller number of ETFs that are properly diversified and balanced against each other based on low correlations with each other. While the theory of what you are doing may be sound, the application or implementation sounds like a lot of gear-grinding inefficiency.

That being said, I would not take last week (or last month) as any guidepost, especially since a lot of what has been going on has been due to Nvidia’s out-performance, while most stocks have actually gone nowhere or down this year. And there is a lot of “wait before buying anything” going on with the debt ceiling drama.

But do you have an allocation to a large-cap growth ETF or similar? That is up about 25% this year after being the worst thing last year. Meanwhile, everyone’s dividend darling from last year, SCHD, is down 6-7%. A lot of fund-chasing amateurs and would-be stock pickers are learning some lessons about why that’s not a good method for investing.

[Ron]

I’m not sure if there’s a limit to how many “things” you can put into an M1 pie, but I’m not aware of one so I believe you could do the same thing Empower is doing for you there. You can cmbine ETFs with individual stocks in a pie and maybe other types of things as well. You can then use the tools to rebalance yourself as the pie skews. TBC …

[Ron]

70% stocks is reasonable if you are in or near retirement and I also think it’s reasonable for the risk adverse. I am personally 66% stocks, in FIRE. But personally I would look at consolidating the 70 stocks and the 40? other things into ETFs that represent what those individual elements are trying to do for your portfolio. I’m not sure more frequent rebalancing among a lot of individual elements comes about ahead in the end than creating broader groupings and doing less feequent rebalancing.

[Author]

Posts