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Total Stock Market Funds Are Now My Largest Position

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Recently, the total stock market funds in my portfolio have become my largest position in my portfolio overtaking my Schwab U.S. Dividend Equity ETF (SCHD) position. This is the combined value of the Vanguard Total Stock Market Index ETF (VTI) positions in my Traditional IRA and taxable brokerage account as well as the Vanguard Total Stock Market Index Mutual Fund in my 401k. At the time of this writing the combined total stock market funds make up 8.44% of my overall portfolio while SCHD makes up 8% of my portfolio.

Why Total Stock Market Funds

Investing in total stock market funds allows me to invest knowing I will be able to match the market returns in this portion of my portfolio. I have no illusions that I am an excellent stock picker. This provides some stability and security to my portfolio. This is a safe way to invest that also does not require a lot of research.

Because I got a late start to investing I struggle with trying to get growth and build income. With only a little more than 8 years to my planned retirement I feel I need both right now. Investing in the total stock market funds should provide me with some growth over time and I can work on building income with the other positions in my portfolio. Also, because I invest in total stock market funds, I do not worry too much about the sector allocation of my other positions. The total stock market funds provide me with some diversification across all sectors of the market.

Long Term Plan

The long term plan is to continue to add to my total stock market funds, especially in my 401k. My 401k only offers mutual funds so the total stock market fund seems like the best choice. I could go with a S&P 500 fund but personally, I like the exposure to the mid cap and small cap stocks in the total stock market funds even though it is only a small amount of exposure. As time goes by, I may add less or not add at all to the VTI positions in my Traditional IRA and taxable brokerage account. At this time I do not have a set percentage goal for the total market funds but the position will grow as I fund my 401k.

When I retire, I will re-evaluate my positions in the total stock market funds. If my accounts are producing enough income to pay my expenses then I will likely stay invested in these funds. If my accounts are not producing enough income to pay my expenses then I will move some or possibly all of my money from these funds into income producing assets.

Still a Dividend Investor

Even though the total stock market funds now make up the largest position in my portfolio, I am still a dividend investor at heart. The overwhelming majority of my portfolio is in dividend paying stocks, funds and REITs. While I enjoy dividend investing I do believe it is wise to have some diversification and some exposure to all areas of the market including growth, mid-cap and small cap companies. That’s all for now. Thanks for following along!

*Disclaimer – I am not a financial professional. The information shared here should not be considered financial advice. I am just a factory worker sharing my experience as I strive to achieve financial freedom. Before investing or making any financial decision do your own research and due diligence or consider seeking the advice of a financial and/or tax professional.

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