26 and Looking to Build a Simple Long-Term Portfolio I Don’t Have to Manage—Thoughts?

General
1

Here’s what I came up with for a portfolio that I can invest in and pretty much ignore:

VOO - S&P 500 fund – 60%

SCHG - US Large-Cap Growth – 20%

VOT - Mid-Cap Growth – 10%

AVUV - Small Cap Value – 10%

Alternative with some international exposure:

VOO - S&P 500 fund – 60%

SCHG - US Large-Cap Growth – 15%

VOT - Mid-Cap Growth – 10%

AVUV - Small Cap Value – 10%

VXUS - Total International – 5%

Do you think I’m over or under-weighted somewhere? Am I missing anything, or is there something in here that’s unnecessary? Appreciate the input!

2

If you’re really looking for a true ‘set it and forget it’ portfolio, I’d say just go with VTI and VXUS. That gives you the mid-cap and small-cap exposure without having to mess with a bunch of different funds.

3

100% VT or 70-80% VTI and the rest in VXUS—simple as that! Why complicate it with extra funds?

4

Lior said:
100% VT or 70-80% VTI and the rest in VXUS—simple as that! Why complicate it with extra funds?

Why do you prefer VT or VTI over just sticking with VOO?

5

Kipp said:

Lior said:
100% VT or 70-80% VTI and the rest in VXUS—simple as that! Why complicate it with extra funds?

Why do you prefer VT or VTI over just sticking with VOO?

VT covers all U.S. and international stocks in one fund, while VTI has U.S. large, mid, and small caps all in one.

6

@Lior
Kind of a basic question, but since VOO is an S&P 500 index, would you say VT/VTI is more diverse and stable, while VOO might offer better returns?

7

Kipp said:
@Lior
Kind of a basic question, but since VOO is an S&P 500 index, would you say VT/VTI is more diverse and stable, while VOO might offer better returns?

VT/VTI is more diverse

yes

stable

not necessarily

VOO would have better returns

No. Large caps like VOO have been outperforming recently, but small/mid-caps and international stocks have outperformed in some periods. It’s all about balancing.

8

Kipp said:
@Lior
Kind of a basic question, but since VOO is an S&P 500 index, would you say VT/VTI is more diverse and stable, while VOO might offer better returns?

Yeah, concentration can mean higher returns but also higher risk. U.S. megacaps are doing well, so betting outside of that is like betting on small caps and international stocks. There’s no guarantee it’ll work out that way.

9

Kipp said:
@Lior
Kind of a basic question, but since VOO is an S&P 500 index, would you say VT/VTI is more diverse and stable, while VOO might offer better returns?

Pretty much, just don’t think of it as ‘safer.’

10

11

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12

I’d suggest more international exposure if you want a globally diversified portfolio—5% in VXUS is barely noticeable. Aiming for closer to 40% international might better match global markets.

There’s less need for mid-cap growth, and large-cap growth mostly benefits from recent trends. If anything, tilting toward small-cap and large-cap value stocks has a bit more research backing it.

My own allocation:

  • VOO – 25%

  • AVUV – 25%

  • VEA – 10%

  • AVDV – 10%

  • VWO – 10%

  • DGS – 10%

  • EDV – 10%

This gives you around 55% U.S., 22.5% developed international, and 22.5% emerging markets, with about 90/10 stocks to bonds—solid for long-term growth. If you want something simpler, just go 100% VTI or VTI + VXUS.

13

There’s a lot of overlap here, and SCHG has an even higher concentration of the ‘Magnificent Seven’ stocks than VOO. Over half the stocks in SCHG are in VOO, and 70% of VOT stocks are also in VOO. If you’re starting out, you don’t need this many funds.

A simpler option:

  • VOO - 70%

  • AVUV - 15%

  • VXUS - 15%

14

@Quinlan
So if I go with VOO, VOT, and SCHG, I’m overlapping stocks multiple times? Interesting.

But what makes VXUS worth 15%? It’s only up 16% over five years. Is international exposure that important?

15

You might also want to consider target-date funds. They’re the true ‘set and forget’ option since they automatically rebalance for you. BlackRock has target-date ETFs too if this isn’t in a tax-advantaged account.

16

VTI and VXUS are really all you need. Or even just VT.

17

Aris said:
VTI and VXUS are really all you need. Or even just VT.

Why VXUS, though? It’s only up 16% in five years.

18

Kipp said:

Aris said:
VTI and VXUS are really all you need. Or even just VT.

Why VXUS, though? It’s only up 16% in five years.

Diversification. True, it hasn’t done great recently, but I’d go with 70-80% VTI and 20-30% VXUS for some balance.

19

Seems like you already have a plan in place!

20

But is now a good time to start? We’re in pre-election times, and lots of stocks are near all-time highs. I started in July, and I’m up 6%, but I can’t help being nervous about the overall market.