investment

My investment portfolio is stupid simple and passive. I buy the US stock market and hold for at least 3 decades. 100% stocks for now, will re-balance as my risk tolerance decreases with age/nearing retirement. I know of an financially savvy attending who holds 100% stock with a stash of liquid funds on the side (to buy MORE stocks whenever the market dips) even though she plans to retire in 10 years. I might end up doing the same 🙂 Only time will tell.

Before I became full-hearted believer of passive/boring investment, I experimented with Robinhood (iphone-based, completely free brokerage) and picked a few stocks including Apple, Google, Hains, Yahoo and a couple other less well known companies.

I picked these stock with <5% of my total portfolio and soon learned that I was wasting much time and losing money, at least in the short term. The #1 lesson I learned from my stock picking experiment was that investment portfolio need not be exciting. Boring and passive can work really well. Additionally, low costs and tax efficiency (my only fees for my investments are 0.04%, 0.05% and 0.08% expense ratio) can accelerate the growth of one’s nest egg.


I only have 3 funds I put post-tax/ROTH dollars into. Fund I/II are institutional funds under 403 ROTH at work, contribution are automatically subtracted from my pay check every 2 weeks. It’s convenient and build automatic savings throughout the year without me thinking about it other than when I did the math to decide how much contribution I wanted per check.

Fund III is my ROTH IRA, which I contribute to whenever time is right with the goal of maxing it out annually. Time is right is a combination of stock prices went down + I happen to have some extra cash/roll over from last month/additional work or moonlighting.


A co-resident with great business sense and an MBA recommended that I look into Russell 2000. I will look into it more, but if the fee is much more than 0.08%, I probably will just stick with my current holdings and consider adding some riskier Vanguard  index funds. Although I will experiment with my risk tolerance by selecting different index funds, what I will not alter is my minimum saving rate and NOT pick stock (index funds only). There are infinite number of ways to achieve financial freedom and innumerable number of investment portfolios (check out the 150 listed by WCI),  but the habit of saving AND the discipline to stick to An investment plan (never sell low) are probably the most critical components to financial freedom.

ps. the net assets below are not my personal numbers, they represent ALL the investors holding the said index funds. I’m surprised to see that for Fund I/II, there aren’t very much net assets (which means people at my work are either not saving much OR choosing other Fidelity retirement holdings that cost much more, e.g. higher expense ratio.)


Fund I (57% of my portfolio):

Vanguard Institutional Index Fund Institutional Shares

Performance

AS OF 10/31/2015

Average Annual Returns
YTD (Daily)* 1 Yr 3 Yr 5 Yr 10 Yr
YTD(Daily)*+3.74% 1 Yr+5.19% 3 Yr+16.17% 5 Yr+14.31% 10 Yr+7.85%

Quarter-End Average Annual Total Returns

AS OF 9/30/2015; FUND INCEPTION 7/31/1990

EXPENSE RATIO (GROSS): 0.04% AS OF 4/28/2015

1 Yr 3 Yr 5 Yr 10 Yr Life
Vanguard Institutional Index Fund Institutional Shares -0.63% 12.37% 13.31% 6.80% 9.21%
S&P 500 -0.61% 12.40% 13.34% 6.80% 9.20%
Large Blend -2.48% 11.28% 11.68% 5.97%

Details about this fund:

Morningstar Category Large Blend
Fund Inception 7/31/1990
NAV

11/6/2015

$192.14
Exp Ratio (Gross)

4/28/2015

0.04%

($0.40 per $1000)

Exp Ratio (Net)

4/28/2015

0.04%

($0.40 per $1000)

Turnover Rate

12/31/2014

4%
Portfolio Net Assets ($M)

10/31/2015

$197,700.37
Share Class Net Assets ($M)

10/31/2015

$105,428.26
12 Month Low-High

10/31/2015

$171.18 – $195.16

Top 10 Holdings

AS OF 9/30/2015

17.13%

TOP 10 HOLDINGS

Apple Inc 3.71%
Microsoft Corp 2.09%
Exxon Mobil Corporation 1.83%
Johnson & Johnson 1.52%
General Electric Co 1.50%
Wells Fargo & Co 1.41%
Berkshire Hathaway Inc Class B 1.36%
JPMorgan Chase & Co 1.33%
Facebook Inc Class A 1.20%
AT&T Inc 1.18%
% of Total Portfolio 17.13%

Fund II (1% of my portfolio):

Vanguard Extended Market Index Fund Institutional Shares

Performance

AS OF 10/31/2015

Average Annual Returns
YTD (Daily)* 1 Yr 3 Yr 5 Yr 10 Yr
YTD(Daily)*+1.07% 1 Yr+1.25% 3 Yr+15.50% 5 Yr+13.28% 10 Yr+8.63%

*AS OF 11/6/2015; Value is cumulative

Quarter-End Average Annual Total Returns

AS OF 9/30/2015; FUND INCEPTION 12/21/1987
EXPENSE RATIO (GROSS): 0.08% AS OF 4/28/2015

1 Yr 3 Yr 5 Yr 10 Yr Life
Vanguard Extended Market Index Fund Institutional Shares -0.18% 12.94% 12.99% 7.77% 7.99%
S&P Completion (TR) -0.27% 12.83% 12.90% 7.63%
Mid-Cap Blend -2.41% 11.74% 11.19% 6.39%

Details about this fund:

Morningstar Category Mid-Cap Blend
Fund Inception 12/21/1987
Share Class Inception 7/7/1997
NAV

11/6/2015

$66.73
Exp Ratio (Gross)

4/28/2015

0.08%

($0.80 per $1000)

Exp Ratio (Net)

4/28/2015

0.08%

($0.80 per $1000)

Turnover Rate

12/31/2014

6%
Portfolio Net Assets ($M)

10/31/2015

$43,783.37
Share Class Net Assets ($M)

10/31/2015

$8,728.87
12 Month Low-High

10/31/2015

$60.90 – $72.07

Portfolio Data

Glossary definition opens in new window.30-Day Yield 4

1.43%

10/30/2015

Top 10 Holdings

AS OF 9/30/2015

4.66%

TOP 10 HOLDINGS

Liberty Global PLC Class C 0.67%
Illumina Inc 0.62%
Tesla Motors Inc 0.59%
LinkedIn Corp Class A 0.54%
Incyte Corp 0.45%
Biomarin Pharmaceutical Inc 0.42%
Twitter Inc 0.38%
Las Vegas Sands Corp 0.34%
Charter Communications Inc Class A 0.33%
SBA Communications Corp 0.33%
% of Total Portfolio 4.66%

Total # of holdings: 3379 as of 9/30/2015

Fund III (43% of my portfolio):

Vanguard Total Stock Market Index Fund Admiral Share

Created in 1992, Vanguard Total Stock Market Index Fund is designed to provide investors with exposure to the entire U.S. equity market, including small-, mid-, and large-cap growth and value stocks. The fund’s key attributes are its low costs, broad diversification, and the potential for tax efficiency. Investors looking for a low-cost way to gain broad exposure to the U.S. stock market who are willing to accept the volatility that comes with stock market investing may wish to consider this fund as either a core equity holding or your only domestic stock fund.

EXPENSE RATIO (GROSS): 0.05%

Equity sector diversification

  Total Stock Mkt Idx Adm
as of 09/30/2015
CRSP US Total Market Index
as of 09/30/2015
Basic Materials 2.30% 2.30%
Consumer Goods 10.30% 10.30%
Consumer Services 14.10% 14.10%
Financials 19.50% 19.50%
Health Care 13.70% 13.70%
Industrials 12.30% 12.30%
Oil & Gas 6.40% 6.40%
Other 0.00%
Technology 16.00% 16.00%
Telecommunications 2.20% 2.20%
Utilities 3.20% 3.20%

Sector categories are based on the Industry Classification Benchmark system.

Characteristics as of 09/30/2015

Number of stocks 3809
Fund total net assets $371.5 billion
Net assets of ten largest holdings 14.5%
Foreign holdings 0.1%

Month-end ten largest holdings
(14.5% of total net assets) as of 09/30/2015

1 Apple Inc.
2 Google Inc.
3 Microsoft Corp.
4 Exxon Mobil Corp.
5 Johnson & Johnson
6 General Electric Co.
7 Berkshire Hathaway Inc.
8 Wells Fargo & Co.
9 JPMorgan Chase & Co.
10 AT&T Inc.

Portfolio holdings may exclude any temporary cash investments and equity index products.


  • What is your investment portfolio? Rationale?
  • How has your portfolio evolve over the years?
  • Do you have a favorite index fund? Why?
Investment portfolio

One thought on “Investment portfolio

  • March 30, 2016 at 3:23 am
    Permalink

    Getting close to April 15th, time to max out your Roth IRA. Buy investment on sale by paying cheap/PGY taxes today and let your investment grow tax free for decades to come!

    Reply

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