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What’s In Our Portfolio (2024 Update)

In December 2011, we switched our portfolio from a DIY allocation to the Vanguard LifeStrategy Growth Fund. And that fund was the entirety of our portfolio for about 12 years. Because people would often ask, I gave periodic updates, explaining that we still liked the fund. For example:

We recently made a change, which I’ll discuss in a moment, but it had nothing to do with a change in how much we liked that fund. I still think the LifeStrategy Funds (and similar products) are fantastic (tax-inefficiency aside). They’re easy to understand, reasonably low-cost, and very low-maintenance.

It was something in our life that changed, rather than our evaluation of the LifeStrategy fund. Specifically, we bought a house last fall. And with interest rates being what they are, it made sense to use a portion of the bond holdings to minimize the mortgage balance. (As Allan Roth often notes, it does not generally make sense to hold bonds that pay a certain interest rate while simultaneously having a mortgage balance with a significantly higher interest rate.)

But, with an “all in one” fund like a LifeStrategy fund, there’s no way to directly spend just the bond part of the fund. Instead, you have to sell the whole thing and then re-buy the stock part of the holdings. And that’s essentially what we did.

So for the stock part of our portfolio, we’re now just using Vanguard Total World Stock ETF. And for the bonds (because we do still have some bonds), we just bought individual long-term TIPS in one of our traditional IRAs — essentially a 5-year ladder of TIPS maturing from 2049-2053 (which would be our ages 65-69).

So again, we’re keeping things super simple. There’s still no need to rebalance. (The TIPS aren’t there to rebalance with the stocks. They’re there to just collect ~2% above inflation for 2-3 decades and then eventually be spent.) We’ll continue to buy more shares of Vanguard Total World Stock ETF. And we’ll slowly add to our TIPS ladder as well, buying both nearer-term and longer-term rungs.

Given how not-that-exciting this portfolio switcheroo is, it feels a bit silly to write about it. But given how public I’ve been about our use of the LifeStrategy fund, I felt that I should give an update and explain the recent change.

I suppose it’s still a single-fund portfolio. But now it’s a different single fund. Plus some TIPS.

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