After my brush with speculation, it felt good to regain control of my finances by taking a closer look at where my non meme-related investments stood with a closer look at my asset allocation. I wanted to find out what percentage of my net worth was at stake, and how my portfolio compares to recommended allocations. Sometimes it’s nice to bust out the old spreadsheet and put together a bad pie chart to help illustrate your financial situation.

What is the recommended asset allocation?

The personal finance advice of old advocates for using your age as a bond percentage in your portfolio. As in, a 30-year-old should hold a 70 percent stock/30 percent bond portfolio (70/30 portfolio). This would be considered relatively aggressive in the days of old. But this was all before interest rate returns plummeted to next to nothing. Now, investors are seeking alternatives to the non-stock portion of their portfolios, with some interesting (and widely speculative) options available.

For me, I’ve eschewed the bond portion entirely and thrown everything into stocks. For that matter, I’ve funneled most of my savings toward domestic U.S. stocks through a Fidelity S&P 500 fund in my 401k and the preferred VTSAX in my Roth IRA and brokerage accounts. While these investments amount to a very diversified group of over 3,000 stocks, it’s not a very non-diversified portfolio in terms of overall asset classes.

Just how far have I ventured from the 70/30 standard? Let’s take a look.

My Standard Asset Allocation

Stocks – 96.3% of assets

Cash – 3.7% of assets

Bonds – nada

OK, simple enough. If you exclude cash, that’s a 100% allocation of stocks. But what if I break it down by US stocks and international stocks? JL Collins would say that you have enough exposure to international markets via VTSAX, since so many of these companies do business globally. Be that as it may, I wanted to fight the home country bias by allotting a little bit of money to strictly international offerings. Emphasis on a little bit.

My US/International Stock Asset Allocation

US Stocks – 92.9%

Cash – 3.7%

International Stocks – 3.4%

Like I said, very domestic stock heavy, with very little intentional exposure outside of the U.S. Now, what if we break this out by fund type? There’s simplicity of the Vanguard Total International Index (VTIAX) for the small overseas exposure, but it isn’t all Fidelity S&P (FXAIX) and Vanguard Total Stock Market (VTSAX) domestically. There’s some funny money involved—some of which has helped give my portfolio a slight boost, and some of which I may come to regret.

My Fund Type Asset Allocation

U.S. Total Stock Market Fund – 45.5%

S&P 500 Fund – 40%

Individual stocks & ETFs – 7.4%

Cash – 3.7%

Total International Stock Fund – 3.4%

Add up the top two holdings and that’s an 85.5% allocation between the S&P and total stock market index, which makes sense. But let’s dive into these individual stocks and ETFs. It says something that, in speculative times like these, my 100% stock allocation didn’t feel risky enough. Further proof that not only has the market gone insane, but that the white walls have closed in on me a little bit as well. While 85% seems like a good percentage of set and forget index funds, somehow that 7% allocation of individual stocks and ETFs frightens me a bit. Probably for good reason, which I’ll get into. Here’s one last breakdown, this time including each of the individual holdings.

My Individual Holding Asset Allocation

VTSAX – 45.5%

FXAIX – 40%

Cash – 3.7%

VTIAX – 3.4%

ARK funds – 2.8%

AAPL – 2.3%

MSFT – 1.1%

TWTR – 1.1%

I recently divided up some of the cash I brought over from my Ally Bank account into each of the five main ARK fund offerings. Those funds have vastly outperformed the index, largely due to a couple of big winners like Tesla, and could very well run into trouble now that new money has poured into Cathie Wood’s coffers and the funds start to experience profit-taking outflows to a larger degree than ever before. In fact, I’m already down on these investments overall, and even more so as compared to VTSAX. Hence my slight queasiness at this 2.8% of my portfolio. But, shoot, I couldn’t help scratching my speculative itch once more.

I plan to hold onto these volatile funds for a minimum of 5-10 years, though my hands have proven to be more paper than diamond in the past. The experiment will likely only serve to reinforce the beauty of indexing and provide proof yet again of my own stock picking incompetence. Or hey, maybe it will provide me with a small acceleration in my retirement accounts. The bottom line is that these funds are very risky and past performance (and mainstream recognition) may actually hinder future growth, and generally speaking I wouldn’t recommend them (especially with a 0.75% expense ratio!). But for me, it felt like a grown-up way to chase meme stocks without chasing meme stocks—by having someone else chase them for me.  

The importance of an asset allocation plan

The important thing for me is that I feel that I found a plan that satisfies my FOMO and keeps me out of my own way, for the most part. ARK is invested in many of the sexy names that have tempted and taunted me for months. Whether this plan is any good is up for debate, but it works for me. Though any amount of money in my portfolio that deviates from VTSAX tends to feel like a mistake—and often is.

As for the individual stock holdings, I’ve held Apple, Microsoft and Twitter since before I really committed to the VTSAX approach, and all have done well with very small amounts of money (TWTR had been the exception until recently). I’m likely going to continue holding these individual stocks, though AAPL and MSFT in particular are plenty well represented in the cap-weighted indexes that make up the majority of my holdings.

Final thoughts on my current asset allocation

Overall, I still have a little bit more cash than I feel that I need on hand, but I plan to keep it that way in preparation for a market downturn that will make me feel like a market timing genius. Until then, it simply serves its function as an emergency fund.

Between my individual holdings and an already heavy tech sector in the U.S. indexes, I’m a little overweight in an area of the market that seems ripe for a correction. But time should theoretically be on my side, and I’m in a position to weather a future storm. I’ll continue to dollar cost average into VTSAX and FXAIX on a monthly basis, so the percentage of set-and-forget index fund holdings will only increase barring a catastrophe.

So there you have it, a little personal finance porn in the form of some big ole assets. What’s your asset allocation look like? Have you gotten in your own way recently like I have?

While you answer those questions, please excuse me while I change all of my passwords to random and forgettable keystrokes in an attempt to avoid any further tinkering.