Suggestion on Roth IRA Split

1. Your Current Roth IRA Split

  1. VTI (45%)

    • Covers the entire U.S. stock market, providing diversification across large-, mid-, and small-cap stocks.
    • Keep or slightly reduce: Since VTI overlaps with AVUV's small-cap exposure, you could lower its allocation if you want to emphasize higher-growth sectors.

  2. AVUV (20%)

    • Focuses on U.S. small-cap value stocks, which historically outperform over long time horizons.
    • Keep or increase slightly: Small-cap value often thrives in rising-rate environments or market recoveries. A 20-25% allocation fits your risk tolerance for growth.

  3. QQQM (20%)

    • Nasdaq-100 exposure with slightly lower fees than QQQ. Growth-heavy with a tech tilt.
    • Keep or adjust slightly: If you're happy with the performance and still bullish on tech's long-term potential, maintain this allocation. Alternatively, you could consolidate some tech exposure here by tweaking VGT.

  4. VGT (15%)

    • U.S. tech sector ETF. High growth, but concentrated in giants like Apple, Microsoft, and Nvidia.
    • Consider merging with QQQM: Since QQQM also heavily tilts toward tech, consolidating into one fund might simplify your portfolio. If you want broader sector coverage, you could allocate this portion elsewhere.

2. Suggestions for Adjustments

If you’re seeking higher growth but want to diversify beyond tech-heavy allocations, consider:

  1. Add International Exposure (5-10%)

    • Examples:
      • VXUS (Vanguard Total International Stock): Broad exposure to developed and emerging markets.
      • VWO (Vanguard Emerging Markets ETF): Target faster-growing regions like Asia and Latin America.
    • Rationale: U.S. equities dominate your portfolio. Diversifying internationally can reduce concentration risk and capture growth in global markets.

  2. Consider REITs for Passive Income (5-10%)

    • Examples:
      • VNQ (Vanguard Real Estate ETF): Broad exposure to U.S. real estate.
    • Rationale: REITs offer diversification with stable dividends, which can balance the volatility of tech-heavy holdings.

  3. Increase Small-Cap Value Tilt (if risk-tolerant)

    • Increase AVUV to 25-30%.
    • Rationale: Small-cap value often performs well in economic expansions and is underweighted in many broad indexes like VTI.

  4. Leave Room for Individual Stocks or High-Growth Sectors (5-10%)

    • Examples:
      • ARKK (ARK Innovation ETF): If you want speculative, high-growth exposure.
      • XBI (SPDR S&P Biotech ETF): Focus on biotech innovation.
    • Rationale: Allocating a small percentage of your Roth IRA to speculative or thematic funds can scratch your itch for growth without adding excessive risk.

3. How It Could Look

Here’s an example adjusted split based on your goals:

Your Brokerage Split

Your brokerage account is solid and heavily weighted toward broad U.S. equities. To balance it with your Roth IRA:

Final Thoughts