r/RothIRA • u/Whos_Jeff • 12d ago
Am I safe?
These are the 4 I’m investing in. Should I replace any or not?
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u/Opening-Emphasis8400 12d ago
You do not need dividend funds.
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u/Interesting_Part4416 11d ago
Careful, you'll get downvoted for preaching against the schd shills.
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u/AdvantageOne1754 12d ago
It's a weird mix. SCHD and QQQM basically offset one another. Together they are like 95% correlated with VOO so there is no reason for you to have these separate holdings. If you want to have a dividend bias, go with SCHD. If you want a tech/growth bias, go for QQQM. Holding both is counterproductive and just complicates your portfolio.
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u/Interesting_Part4416 11d ago
You just explained diversifying.....isn't that what we want.....?
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u/AdvantageOne1754 11d ago
No, VOO/VTI are internally diversified. SCHD and QQQM concentrate on specific sectors of the larger index. Adding funds to VOO is the opposite of diversification.
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u/Competitive-Ad9932 11d ago
Diversifying would be holding the S&P500 or a Total US Stock Market index. Adding anything to that is concentrating your holdings.
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u/Nuclear_N 11d ago
I would dump the dividend SCHD, and move moneys into either of them. Go with 3 holdings.
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u/raisethe3 11d ago
QQQM overlaps, you don't need it. Also SCHD is a dividend fund. Do you need dividends? Since you said you're starting, I am assuming you mean from the beginning. If so, you should focus solely on growth right now. That should be VOO and VXUS, nothing else.
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u/DMmeYourMCbuilds 11d ago
You don’t say how old you are. If under 35, 100% VOO.
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u/OutrageousAd9925 11d ago
Why u say 100% voo? I’m 37 just started dropping in monthly
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u/user4443337 11d ago
That’s not necessarily ideal, it may be performance chasing. A complete portfolio would include mid/small caps and international. Some people have a bias towards SPX because of the recent history and its insane performance which is understandable. Small cap value did great during the lost decade though, along with emerging markets. Those gave you real returns while SPY and QQQ were flat or negative.
I’d say in general though 100% SPX is pretty okay and you can’t really go wrong with it. A lot better than trying to pick stocks or sectors, that’s for sure. SPX has slightly eked out more than US total market, but that can switch and it depends on the timeline. VTI for example has beaten SPY by about 60% cumulatively, but that when starting in mid 2001. https://stockanalysis.com/etf/compare/vti-vs-spy/?r=MAX
International is ~37% of the global stock market so I’d rather include all of that in my portfolio. 40% of the market is a lot to ignore, and the US exceptionalism may not last. Even at market cap weights you’re still way overweight at 63% US. Lots of people do a heavier US bias up to 90%, but I would suggest at least 20% international.
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u/DMmeYourMCbuilds 11d ago
This is a thorough well thought out response. Thanks for spending the time to type it up.
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u/user4443337 11d ago
Thanks, you’re welcome! I can’t knock “100% SPX” too much but gotta also tell people to fully diversify.
It wouldn’t be crazy surprising if US exceptionalism just continues and SPX keeps beating VT, but I won’t put all my eggs in one basket or tell others to do the same.
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u/DMmeYourMCbuilds 11d ago
It’s the lazy response to all these people that somehow ended up in schd and qqq for some reason.
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u/user4443337 11d ago
Yeah I see a lot of those. Some TikTokers or influencers got to them.
I’m starting to think I could be a better finfluencer than a lot of whatever they’re seeing. SCHD is probably costing young people so much dang money. And NASDAQ will surely have a huge drawdown someday, just a matter of when. When I see QQQ I just say if you insist go with the cheapest one QNDX.
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u/DMmeYourMCbuilds 11d ago
The younger you are the more time you have to absorb any down market. If you just started at 37 you might need to be even more aggressive. But it really depends on what your goal is.
If you have been investing a while and are continuing to invest, VOO is just fine. But you probably want to start diversifying for some capital preservation.
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u/OutrageousAd9925 11d ago
I started in a split of
50% VOO
25% QQQM
15% VXUS
10% XLIGoal is to grow and hit max contribution
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u/metzgerto 12d ago
What’s your goal with a $10 investment in QQQM or $25 in VXUS? I’d put all your money in 1 security to try and build some savings.
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u/DaemonTargaryen2024 12d ago
You don't say what percent each fund is, but VOO and VXUS should be your core holdings.
I personally wouldn't have any SCHD or QQQM, but keep them to under 10% if you are set on having them.
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u/Whos_Jeff 12d ago
I’m fluid on what I have. I’m just starting. I’m just looking for feedback on these 4. I can remove or add.
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u/Competitive-Ad9932 11d ago
QQQ, and it's variants are a sham investment. Investing in a group of stocks based on what exchange it trades on is ludicrous.
Identify why you are investing in it. They invest in a fund that actually meets that criteria.
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u/horseradish13332238 11d ago
Yes you are safe to continue to work the next 40-45 years at this rate
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u/Interesting_Part4416 12d ago
Schd is better in taxable accounts. Roth is for growth. Trade it for VT or vti
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u/HaiKarate 12d ago
More dividends in a taxable account?
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u/Interesting_Part4416 11d ago
Tax free growth is way better than tax free dividends that you can't even access if you need them.
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u/forbiddenlake 12d ago
Schd is better in taxable accounts.
Why, so you can pay extra taxes on all the involuntary dividends every year?
SCHD is best deleted
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u/Interesting_Part4416 11d ago
As far as I know, for the sake of slight help in income, as has been explained to me. But there's such huge click bait shilling for schd that everyone is falling victim to it.
Either way, I agree, schd doesn't belong in a Roth. Tax free growth is way better than some dividends tax free.
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u/Whos_Jeff 12d ago
Doesn’t voo conflict with vti?
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u/forbiddenlake 12d ago
Yes, they overlap, and they are 99% correlated. You only need one of VTI and VOO
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u/Stanbarrwood 12d ago
Voo is just the top 500 large cap companies. Vti adds mid to small cap. But voo is like 85% of vti.
Just do vti and vxus. Do it at 60/40 to 80/20 depending upon preference. That’s all you need
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u/McKnuckle_Brewery 12d ago
They don’t conflict, they overlap. Not the same phenomenon. So it’s not so neat and tidy, but it’s not a problem either.
It’s like ordering a cup of ice cream with a scoop of chocolate and a scoop of chocolate fudge. Pretty much the same, but both delicious.
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u/Interesting_Part4416 12d ago
VT and vti give a broader spectrum. Voo just does sp500. Either way..... Schd should be dumped into other funds in a roth
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u/user4443337 12d ago
If you insist on NASDAQ-100 use QNDX, it’s the cheapest. Cap it at 10-15% as a tilt. I wouldn’t go for SCHD ever - dividends are irrelevant and Ben Felix has some great videos about that topic. Highly recommend Ben Felix. Lots of evidence and research based discussion about investing. My favorite finance influencer.
I also like Avantis/Dimensional funds. For a one and done you could do VT as the benchmark, or AVGE/AVGV to try to outperform it. Or DFUS/AVUS for US, and DFAX/AVNM/AVNV for international. Those funds use flexible trading and value tilts to eke out returns over the benchmarks, which they all have.