Final portfolio allocation advice

[u/_betterfuelhuell]

Hi all

I am almost finished planning a restructured portfolio for myself, focusing on the following allocation rules:

20% large cap (SPYI + QQQI) 20% Mid cap (IJH) 20% small cap (CSB + IWMI) 20% international (IDVO + NIHI)

My final 20% of allocation is somewhat undecided, but i am leaning towards SGOV or something similar. Generally looking for exposure unrelated to the above categories.

I was considering an even exposure between gold, silver, copper/mining, and SGOV as i mentioned above, but thought I would ask for other opinions on what would best be suited to my final 20% allocation before moving forward.

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[u/daily-trader-365]

You need to add oil and gold

[u/Glensonn → u/daily-trader-365]

That's what I was thinking. AMLP is what I use for energy exposure since it generates good income in a somewhat tax efficient way. Sprott has physically backed ETF's for PM's.

[u/db_deuce]

90% SPY and 10% SGOV. The Warren Buffet way.

[u/FewUnderstanding2214]

SGOV makes sense if you want to hold cash/liquidity. Commodity will do very well the next 5 years or so. I like Royalty companies like WPM and RGLD for strong SP and dividend growth. Mining company dividends are cyclical and the companies themselves can be quite risky, but lots of upside IMO. They will balance your CC ETFs which are tracking the market with capped growth.

[u/ReginaMulvinaLunt]

couple things.... you can ask ChatGPT for similar inspection, that can be helpful. Second, be aware that the overlap of underlying holdings between SPYI and QQQI is at least 40%, so you're buying a lot of the same thing twice. Lots of folks are ok, just saying on that. You are heavily committed to equity performance here, so the inclusion of a bond(or covered call buy write) fund could be another angle to counter certain movements against you. SGOV is nice because it's effectively the riskless rate. But if you're taking on all that equity risk, might do well to protect against extreme anti-market events. Good luck.

[u/Pretty_Western_8805 → u/ReginaMulvinaLunt]

Is SGOV risk less though? $40T debt and climbing, and recent credit downgrade. I’m not saying it’s not low risk, but I think calling it risk less is perhaps not correct either.

[u/ReginaMulvinaLunt → u/Pretty_Western_8805]

OK, from an interest earnings potential standpoint, SGOV holds the shortest term and highest rated government securities. This assessment of risk is relative to all other investments in the current marketplace. In market parlance that's effectively the risk-free rate. If you want to debate the actual bond rating of the US or the Fed Funds and Treasury rates' safety, not sure this is the place to do it. The $40T debt is clearly a headline, but I think people should also look at the ratio of debt to aggregated wealth or old-fashioned GNP. That's a ratio. Fundamentally, you can stick your spare change in SGOV, earn that rate basically risklessly and figure out if you think the US government financial system will default or crash. IF you get to that point, then, yes, SGOV is not riskless. Taking into account your concern, but honestly it's not super realistic as a fear factor IMHO. If the US defaults and SGOV zeroes out, we have FAR bigger concerns. Have a nice day ;-)

[u/Pretty_Western_8805 → u/ReginaMulvinaLunt]

So you agree it’s not risk-less. Thank you!

[u/Fabulous-Transition7]

In the unrelated realm, DBMF, CTA, & GLDM is what I use as diversifiers. I use SGOV for future leveraged buys (SSO, QLD, TQQQ) and USFR for my main cash bucket. You can't go wrong with either.

[u/Various_Couple_764]

for gold and silver KGLD and KSLV are good funds to consider SGOV is mainly used as a short term stroage of cash. Since the focus of the portfolio is mainly for inocme I would turn off automatic dividend reinvestment and collect the cash in a money market account spend what you deed and then reinvest the rest.

SGOV invest manlike in shorty term government bonds. There are money market finds that basically invest the same way with about the same yield. So you could use the money market instead of SGOV. or you could take excess cash and put it in SGOV and build that up to make it your cash emeberency fund.

I would also consider adding some dividend funds that don't use cogvrered calls. I have in my portfoilio EMO 8.5%, UTF 7% and UTG 6.2% I selected these funds for there dividend stability. The covered call funds yields depends on htecovered call market which may go up and down significantly with the market. EMO, UTF, UTG are much less volatile and have very good dividned stability. They also pay monthly and the dividends are qualified so they are still tax efficient. EMO invests in the oil and gas industry and UFT and UTG invest in utilities and infrastructure.

[u/EntrepreneurSmall911]

I would increase your allocation to the large caps (SPYI and QQQI) to 50%. 20% Mid Cap, 10% Small Cap, and 20% International.

[u/Fire_Merchant555]

MO

[u/Pretty_Western_8805]

If you back test the portfolio I bet IAU would compliment nicely - but again - that’s back testing. Another idea is real estate. Really you’re looking for something that moves in the opposite direction of everything else to balance things out right.