The following question was brought up on the BogleDocs facebook group. We thought it would be beneficial to bring this discussion to the forum for further comment and insight.
Question from anonymous BogleDocs physician:
Asset Allocation for an Early Career Physician - What Would You Do If You Could Do It All Over Again?
I'm an early career physician just starting out in practice after residency training. I'm in my mid 30s and plan to work for 30 or so years until retirement. My salary is roughly $800k/year and I maximize tax protected accounts (my practice 401k, personal and spousal ROTH IRAs, individual 401k, HSA, and 529s for our children). I also plan to contribute additional savings to my taxable brokerage account. All in all, we plan to save roughly 30-35% for retirement each year. I know that savings rate is more important than asset allocation, but I am getting hung up on picking "the right" asset allocation for the long haul and would like to pick something and not mess with it thereafter. Specifically, I am trying to decide whether or not I should add a small cap value and/or REIT tilt to the traditional 3 fun portfolio (total US stock, total international stock, total bond)? I have also thought about excluding bonds altogether given the fact that I plan to have a long investing career and can ride out market downturns without panic selling. The thought of leaving off bonds given my investment horizon was further validated in my mind after reading JL Collins "The Simple Path to Wealth" and I go back and forth on factor tilts thanks to the good arguments I've heard from Rick Ferri, Paul Merriman and Jim Dahle on the matter.
I guess my question here is this: Knowing what you know now...if you could go back to your 35 year old self and design a portfolio for the long haul, what would it look like?
Is it worth adding SCV even though there's a chance that it will underperform for several years as it has in recent past? Or is now a good time to add SCV, given that it's "on sale" and would be expected to once again have its day in the sun? While I'm intrigued with factor tilting, I can't help but think that there is a big risk of the timing of its underperformance in the sense that it may be down again for several years when it's time for me to start drawing for retirement or taking RMDs. I'm rather aloof on REITs and can only say that I like the idea of having some real estate exposure but know that there are arguments to be made on whether or not to include this class as well.
Any advice and insight is welcomed!
Question from anonymous BogleDocs physician:
Asset Allocation for an Early Career Physician - What Would You Do If You Could Do It All Over Again?
I'm an early career physician just starting out in practice after residency training. I'm in my mid 30s and plan to work for 30 or so years until retirement. My salary is roughly $800k/year and I maximize tax protected accounts (my practice 401k, personal and spousal ROTH IRAs, individual 401k, HSA, and 529s for our children). I also plan to contribute additional savings to my taxable brokerage account. All in all, we plan to save roughly 30-35% for retirement each year. I know that savings rate is more important than asset allocation, but I am getting hung up on picking "the right" asset allocation for the long haul and would like to pick something and not mess with it thereafter. Specifically, I am trying to decide whether or not I should add a small cap value and/or REIT tilt to the traditional 3 fun portfolio (total US stock, total international stock, total bond)? I have also thought about excluding bonds altogether given the fact that I plan to have a long investing career and can ride out market downturns without panic selling. The thought of leaving off bonds given my investment horizon was further validated in my mind after reading JL Collins "The Simple Path to Wealth" and I go back and forth on factor tilts thanks to the good arguments I've heard from Rick Ferri, Paul Merriman and Jim Dahle on the matter.
I guess my question here is this: Knowing what you know now...if you could go back to your 35 year old self and design a portfolio for the long haul, what would it look like?
Is it worth adding SCV even though there's a chance that it will underperform for several years as it has in recent past? Or is now a good time to add SCV, given that it's "on sale" and would be expected to once again have its day in the sun? While I'm intrigued with factor tilting, I can't help but think that there is a big risk of the timing of its underperformance in the sense that it may be down again for several years when it's time for me to start drawing for retirement or taking RMDs. I'm rather aloof on REITs and can only say that I like the idea of having some real estate exposure but know that there are arguments to be made on whether or not to include this class as well.
Any advice and insight is welcomed!
Statistics: Posted by thebogledoc — Wed Feb 14, 2024 10:03 pm — Replies 0 — Views 129