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Post by chang on Jan 4, 2022 6:34:18 GMT
I have a heavily LC-skewed portfolio, which has not hurt me the last 10 years. Now in retirement, I've made a deliberate decision to avoid a specific small cap allocation, since whatever extra, long-term return may be associated with this, it seems to me, is not essential to my financial security, and the distraction of additional complexity and volatility is also not needed.
However, with some cash to deploy yesterday, I decided to buy a bucket of VO in my taxable account. It seemed like a reasonable complement to a LC portfolio. I could easily add 15-20 more buckets of this size if I wanted a "full" position (around 10% of equity). That's the question: do I want a "full" position?
Mid caps as an allocation don't seem to be discussed much. Perhaps people barbell SC and LC and just ignore them. I don't really know why they don't get much attention.
Does anyone use a MC index like VO/VIMAX, FSMDX, SCHM, etc.? Any thoughts on MC in your AA? I am trying to decide how much future money to send into VO. TIA.
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Post by anovice on Jan 4, 2022 9:59:00 GMT
"Mid caps as an allocation don't seem to be discussed much. Perhaps people barbell SC and LC and just ignore them. I don't really know why they don't get much attention." Volumes have been written on this in the Bogleheads forum. One example. www.bogleheads.org/forum/viewtopic.php?t=137723&start=50
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Post by Deleted on Jan 4, 2022 11:50:29 GMT
I hold VO and intend to add to it or a mix of a mid and small cap fund in my thrift savings plan, this year.
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Post by ignatz on Jan 4, 2022 11:59:41 GMT
Any thoughts on MC in your AA? I am trying to decide how much future money to send into VO. TIA.
I've never had a dedicated MC fund, although I have had funds that had as much MC as anything else.
I have had dedicated SC funds and was underwhelmed as you'd expect over the last decade plus.
Historically, my MC has been as much as 20% of equities, but never by deliberate design (as an overt target).
Right now, it's 16%, again incidentally. About a fifth of that is indexed.
I've never been one to get particularly caught up in clinging closely to percentages of anything.
But I do attempt to calculate the percentages of equity in SC, MC, LC, foreign, and emerging. As long as LC is at least double the sum of SC and MC, I'm in the ballpark.
Any tuning finer than that is just make-work, despite any pretenses to the contrary.
Needless to say, any SC or MC is likely to have been a detractor for a long time. I continue to have crystal ball issues.
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Post by yogibearbull on Jan 4, 2022 12:38:10 GMT
I prefer mid-caps (MC) over small-caps (SC). Good thing about MC is that it may include some former SC and LC. Unfortunately, one of my 403b offers only LC & SC, no MC, so I am forced to barbell there.
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Post by Deleted on Jan 4, 2022 12:59:35 GMT
YBB - I have the S fund in my tsp. It follows the Dow Jones U.S. Completion Total Stock Market Index - DWCPF. Isn't it a mix of SC and MC mainly? I take it your 403 doesn't have something like that.
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Post by yogibearbull on Jan 4, 2022 13:34:13 GMT
@slooow, completion index is indeed a mix of SC and MC. But I don't like completion indexes because they have everything, including 25-30% of low-quality companies without any earnings and not all are hot early-stage/startup companies. BTW, I am familiar with TSP but don't actually have it.
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Mid Caps
Jan 4, 2022 14:21:01 GMT
via mobile
Post by Chahta on Jan 4, 2022 14:21:01 GMT
I like the idea of adding some VOT to augment VTI. Over the last 5 years it has added to TR, not reduced the return.
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Post by Fearchar on Jan 4, 2022 14:32:18 GMT
Growth is really really expensive.
That's not to say it won't get even more expensive.
As interest rates rise, so will the cost of speculating on growth and it's luster will tarnish.
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Post by jongaltiii on Jan 4, 2022 14:52:12 GMT
Excellent topic. The Bogleheads link was fun reading as well. For better or worse, MC are a "nice to have" in my port. I own a little MACGX (terrible 2021) and the list of MC on my watch list is the smallest of any category. Do watch VIMAX and FSMDX - both of which I think are best of breed. BFGFX and ETNDX is also on the list. I guess I prefer the bar bell approach as that is what I have been doing for a while.
Edit Add: I seem to recall that the theory is MC perform better during rising inflation and read somewhere that they outperformed as in index both LC and SC over long periods. So- worthwhile topic. Interested in others viewpoints.
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Post by johntaylor on Jan 4, 2022 14:52:35 GMT
Was 27% S Fund in my TSP last year
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Post by acksurf on Jan 4, 2022 15:53:38 GMT
I have held VO in the past. In my drive to reduce funds, I've eliminated mid cap from long term holdings. I may trade it if there is some momentum there. I also don't have much in the way of small cap - small allocation to Vanguard Tax Managed Small Cap.
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Post by oldskeet on Jan 4, 2022 16:30:30 GMT
On the comment: "Mid caps as an allocation don't seem to be discussed much. Perhaps people barbell SC and LC and just ignore them. I don't really know why they don't get much attention."
Old_Skeet has a sleeve of small/mid caps which is found in the growth area of my portfolio. This sleeve makes up about 20% of the growth area. The other sleeves found in the growth area are a global growth sleeve presently at 45% (overweight) and a large mid cap growth sleeve at 35% (underweight). Overall, the growth area accounts for about 15% of my portfolio. In addition, this area holds an equity ballast sleeve (for spiff positions) which currently has no assets.
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