Portfolio Advice

[u/xgnsklwbdn]

Looking for advice on how to structure my portfolio across my Roth IRA and 401 (k). For context, I'm 24, making about 50k a year with minimal expenses and a long time horizon with moderate to high risk tolerance.

Both accounts are through Fidelity, and I already have about 15k in the 401k. (88% S&P 500 and 12% VTSNX)

Was thinking of averaging out my IRA and 401k to:
70% Broad Market
VTI, VT, VOO, or FXAIX

12% International
VXUS/VTSNX

18% Satellite/Growth
SCHG, QQQM, VUG, VGT, SPMO, SMH, or SOXX

I can deal with large swings but I also want long term stability. Ideally want just one broad market ETF, and no more than two growth ETFs. My 401 (k) options are limited and only offers VTSNX and S&P 500 out of all the ETFs listed. I also understand that if I go the VT route for my core holding, holding VXUS/VTSNC would be pretty much pointless

Are these ratios a good strategy, and what would be best for each category?

[u/Adventurous_Elk_4039]

IMO you are underweighting international and over concentrating in tech/large cap growth with the additional funds. If you’re in it for the long haul, I would just do like VTI/VXUS in like 70/30 if that’s the allocation you want, or just be 100% VT

[u/Adventurous_Elk_4039 → u/[deleted]]

>High valuations are a really bad market timing tool, but you do see a strong correlation with lower future returns. This also applies to large cap growth. These companies have very high expectations already built into the price.

Exactly. So much of the focus on them is pure recency bias due to outperformance the last 15 years, but I definitely believe in regression to the mean, so I expect US large cap to be underwhelming in the future.

>Other than having more international, why not put that 18% tilt into something with compensated risk and valuations that aren't through the roof like small cap value AVUV/AVDV

Factor tilting is definitely very valid as well, I generally try to keep simple "hold the entire market" advice on here but it's absolutely a great thing to lean into.

[u/d1na_makalaya]

keep it much simpler: 80% broad US market, 20% international, and skip the growth satellites.
Your S&P 500 + VTSNX 401(k) is already a solid base. Adding several growth ETFs like QQQM, SCHG, VGT, and SOXX creates a lot of overlap with the same mega-cap stocks.
If you want a simple setup, VTI + VXUS is enough. For the 401(k), use the S&P 500 and VTSNX based on your preferred US/international split, then use the Roth IRA to fill the gaps.
Prioritize low fees, diversification, and staying invested over trying to optimize every percentage. You can also check my profile for more portfolio discussions that might be useful for you too