Hey everyone! Looking for some feedback on my investment strategy for my Roth IRA. I’m starting from scratch with $0 and have a 22-year time horizon ahead of me. Here’s the allocation I’m considering:
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**VOO (Vanguard S&P 500 ETF) - 60.00%**
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**IJR (iShares Core S&P Small-Cap ETF) - 15.00%**
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**IJH (iShares Core S&P Mid-Cap ETF) - 5.00%**
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**VTV (Vanguard Value ETF) - 20.00%**
### **My Thinking Behind This Allocation:*\*
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**VOO - 60%**: This forms the core of my portfolio, providing broad exposure to the S&P 500. I’m looking for long-term growth with established, large-cap U.S. companies across various sectors. The S&P 500’s historical performance is strong, and I like the idea of having this as my main holding because of its stability and proven track record.
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**IJR - 15%**: I’m including small-cap stocks to capture higher growth potential. I know they can be more volatile, but I’m willing to ride that out given my long time horizon. I’m hoping this segment will add some aggressive growth to my portfolio.
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**IJH - 5%**: Mid-cap stocks offer a good balance between stability and growth potential. They’re typically more established than small caps but still have significant room to expand. I’m allocating a smaller percentage here to capture that middle ground between large and small-cap stocks.
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**VTV - 20%**: I’m adding a value tilt with VTV to include more defensive, dividend-paying stocks that are often undervalued. My goal is to have a bit of a safety net with this allocation, especially during market downturns when value stocks typically hold up better than growth stocks.
**Why This Portfolio?**
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**Diversification Across Market Caps**: By including large, mid, and small caps, I’m aiming to capture a wide range of growth opportunities across different company sizes. I like the idea of spreading my risk and not putting all my eggs in the large-cap basket.
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**Value Component for Stability**: The value focus with VTV should help provide some cushion during downturns, especially since value stocks tend to outperform growth stocks during recessions. I also appreciate the dividend income that value stocks can provide, adding another layer to my returns.
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**Long-Term Growth Potential**: I believe this portfolio balances growth and stability well, which feels right for my 22-year investment horizon. My goal is to maximize my Roth IRA’s growth potential over time while managing risk.
**Questions for the Community:**
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**Am I missing anything important here?** I’m wondering if there’s something I should be adding or adjusting to make this even stronger.
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**Thoughts on the allocation percentages?** Are these weights balanced well, or would you adjust them? For instance, should I tweak the value allocation or add more to mid or small caps
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**International Exposure?** I’ve heard mixed advice about adding international stocks. I’m currently 100% U.S.-focused. Is that okay for a Roth IRA, or should I be looking to diversify more globally?
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**Overall Risk Level?** Do you think this is a suitable risk level for someone starting from $0 with a 22-year horizon, or should I be more aggressive/conservative?
Thanks in advance for any insights or advice! Looking forward to hearing your thoughts!
Submitted September 18, 2024 at 12:35AM by ZooKeeperCzar https://ift.tt/Jt3AzG1
