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Hi guys Does BofA provide education leave?
Rising Star
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Additional Posts in FIRE Financial Independence Retire Early
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Vtsax vs fxaix?
Sooo AMC.. who’s in?
😂
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Mentor
First of all, don’t do that… don’t minimize your accomplishments…
You are right, the vast majority of the run up has been concentrated in the Top 10 holdings… S&P it’s about 32% of the combined market cap… NASDAQ is about 60% of the combined market cap… the DJIA is about 55%…
So it’s clear that the high flyers are moving the vast majority of the market… but it’s mostly concentrated in tech…
Personally I have a 30 year runway, so I’ve rotated capital into a few different self created portfolios, but I’ve also bought some thematics that I think will outperform over that time horizon…
But just being involved in the market overall is the best play… no need to time it or play day trader… consistency, being stead fast and conviction usually wins the race…
Thank you, this is super helpful!!
401k, IRA, and HSA are all index funds and make up around 65% of NW.
30% of net worth in real estate (primary + a few rental properties)
HYSA and other short term low risk investments make up around 5%
Mentor
By far the most important factor in achieving FI is consistently saving a relatively high portion of your income over several years.
The fact that you are relatively early in your investment journey means it doesn’t matter very much if stocks fall 30%+, in fact it would be great for you if they did.
But no one knows if or when that will happen.
The only thing relatively certain is over 30 years+ horizon they will likely outperform other asset classes
That’s far too much money on HYSA. You need to be indexed more heavily in stocks
There have been analyses done about this. In short let it go when it’s concentrated, your benchmark is the market. If you are worried, do fine research and find a capped fund, same index, just that the maximum weight of a security is limited. Alternatively there are equal weight funds for certain sectors.
My thought, can you take the risk, if not it’s not the right portfolio for you.
Subject Expert
Don't feel bad, just get better. Everyone who has millions had $200k once, unless they inherited it, in which case it's not a relevant comparison.
Portfolio wise:
I just hold the whole market as regards my US stocks. I find it a little silly when people hold the S&P500 while worrying about concentration, because S&P500 is a large cap index, and the other 20% of the market is right there, ready to reduce your concentration by 20% while theoretically both reducing volatility slightly and increasing expected returns. Why ignore it?
Similarly, the international stock market is also right there, with both more diversification, and reduction in concentration, and lower valuations.
And, there is no rule that you have to be 100% stock. If you are worried about valuations, concentration, volatility, and willing to accept a slightly lower expected return in the long run, and avoid the temptation to market time, you can hold bonds during accumulation. Lots of people do. 20%, even 30% bonds damps the volatility considerably while reducing long term expected returns by about 1%.
You have options. You can think about them and make choices.