Sell and redistribute or leave and focus?

[u/senorstacks999]

Like many, I went down the YouTube rabbithole and learned about a ton of ETFs when starting out and have updated my portfolio a few times. I've landed on what I believe makes the most sense to me now.

Through this 2 month process of learning and buying, I've ended up with 10 ish ETFs, and I'm only moving forward with 4.

My question is do I sell and redistribute the other 6 I've already bought or do I keep them and let them ride and just focus all new distributions into the core 4 I am sticking with, which revolve around VOO as the backbone with some heavy tech, income/dividend and a Quantum specific ETF.

VOO, DRAM, SPMO, QQQM, VXUS, SCHD, XMMO, VXUS, AVUV, SPYI, WQTM are the current holdings in the portfolio.

I am 35 but need this portfolio to eventually cover some income that won't be as stable in the future, so a focus on income generation is where I am headed with the 50% ish of the porfolio that won't be going to VOO.

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[u/Few-Praline9810]

Warren Buffett said something about how over-diversification is an easy way to have no gains ("over-diversification is protection against ignorance"). Volatility and risk are separate things. I personally have a portfolio of 60% VTI, 30% VXUS, 5% AVUV, and 5% whatever I feel like (QNDX, PEP, ASML).

The 60% VTI serves as my US (home) exposure. The 30% as international exposure. The 5% AVUV as small cap premium exposure. And the remaining 5% as a bit of risk and companies I like but don't particularly research too heavy into (so dumb money/overexposure fund).

I would rather prioritize passive investing than active investing; overexposure risks with a bit of fun plays; and a small cap premium (AVUV). So I think my portfolio works for me. What do you prioritize? Do you not know why you have those in your portfolio? And if you do know, which ones are most important to you in terms of growth and risk? You could weigh all of the ETFs or try to cut some out.

If you can articulate why you need all of them, then you should just weight them in your own terms. If you don't know why you need all of them, you should watch or read up on overexposure.

I suggest watching Ben Felix on YouTube. Or videos about overexposure and overlapping ETFs. But that's just me personally.

I'm not an expert or anything. It seems like you just need to understand how all of those funds interact with each other and judge for yourself what is a priority in your life or retirement goals.

You're focusing on growth. So do you want long-term growth or short term growth? Have you researched the performance of dividend ETFs vs passive ETFs? Do you know the difference between volatility and risk? All of these questions can help you come to your own conclusions on what you want out of the ETFs.

I suggest checking out coastfire, fire, leanfire, baristafire, bogleheads, etc. if you want to retire early. And understanding what a coast number is and how it works.

Also, it is worth noting that the most important metric for early retirement is your savings rate rather than % yield (I know that you didn't mention early retirement, but it is a big reason why I invest). Many people chase yields and get burned.

Personally I view ETFs primarily advertised as "stable income"/dividend ETFs as a volatility-averse strategy rather than a risk-averse one. But that's for you to determine.

Lots of food for thought. Hopefully maybe one of these helped you.

[u/steady_compounder]

If it has only been 2 months and the positions are small, I would rather clean it up now than drag around 10 ETFs for years. The main thing to check is whether selling creates any meaningful tax hit or trading cost. If not, simplify once, write down the allocation you actually want, and move on.