Simplifying the portfolio would make it easier to see performance over time and re-balance it as time goes on.
The portfolio does include the essentials of a four fund portfolio:
1. Large Cap Value - VTV/MGV
2. S&P 500 - VOO
3. Small Cap Value - VBR
4. Small Cap Blend - VB
A four fund portfolio historically performs better than merely holding the S&P 500 during rough decades.
All of the above funds have very low fees because they are all Vanguard funds.
I want my core portfolio to have 10 holdings or less. Even 3-5 ETFs, when selected appropriately, can create a diverse portfolio.
Choices for my core portfolio:
MGK
Performs slightly better than VOOG in the long run, but VOOG is more diversified. The largest holdings include household names, like Apple, Microsoft, Amazon, Google, Tesla, Facebook (Meta), Nvidia, Home Depot, and Visa.
MGV
Mega Cap Value
The largest companies in the US with good value (almost the opposite of MGK). Up 11.1% in the last year. Largest holdings include Berkshire Hathaway, J&J, United Health, JPMorgan, Proctor & Gamble, Exxon, Bank of America, Pfizer, Chevron, and AbbVie.
BRK.B
Berkshire Hathaway
An extremely alue oriented company creates by Warren Buffet. Many of the companies they bought are better insualted from harm during a recession than the overall S&P 500. Their current P/E ratio is only 8.2. In the last year, it's up 25.9%, blowing the S&P out of the water.
COWZ
Cash cow fund (ETF)
Companies rated with good free cash flow. Up 25.6% in the last year. Contains 101 stocks, with the biggest holdings currently in oil, chemical, and drug companies.
VOOG
High growth companies within the S&P.
Has nearly identical 5 and 10 year average annual return as MGK, except it holds 307 stocks instead of just 112. The largest holdings include household names, like Apple, Microsoft, Amazon, Google, Tesla, Facebook (Meta), Nvidia, Home Depot, and Adobe.
VBR
Small Cap Value fund
A good counter balance to the S&P 500 and high growth companies. In several decades in the last 70 years, small cap value has been the highest performing asset class out of the four fund portfolio.
VOO
The Benchmark standard, the S&P 500, as a fund provided by Vanguard. It holds 510 of the largest companies in the US. Over long spans of time, it typically returns 8-9% average annual return. In the last 10 years it's grown annually by 14.55%.
SPHQ
S&P 500 Quality ETF
"Tracks an index of US large-cap stocks and selected by return on equity, changes in net operating assets, and financial leverage." Up 9.3% in the last year (March 8, 2022) and 70.1% in the last 5 years. The fund contains 103 stocks and the largest holdings include: Apple, Microsoft, Visa, JP Morgan Chase, Bank of America, Pfizer, Mastercard, Wells Fargo, Adobe, and Walmart. Before the downtown in growth stocks that started in Decembee 2021, this fund was performing better than the S&P 500.
VHT
Health Care fund
Contains 448 stocks in the health care sector. Up 73.07% in the last 5 years.
VB
Small Cap Blend fund
Contains 1,553 stocks and pulls from the bottom 2-15% of the investable stocks in the US. With an average annual return of 12.2% over the last 10 years, this fund has still done well for investors. Small caps started to tank in late November of 2021. This fund is up 48.2% in the last 5 years.
