I'm pretty financially literate and happy with my investment plan in general - except for my ROTH IRA.

I thought I was so smart, I would build a huge account by investing in individual dividend aristocrats like altria, McDonald's, Honeywell, and others - but after 7 years of following the plan and dripping dividends my portfolio has grown by exactly 0%.

I'm tired of getting left behind here and was looking to try a three portfolio mix of QQQ, VGT, and ARKK. What do y'all think of these ETFs individually, and collectively as a high risk high yield strategy?

I'm not interested in total market funds because I have those covered in my 401k. I'm also already invested in real estate, crypto, and bullion.

Looking forward to the dialog.

Given the valuation and weighting of the magnificent seven, I would look to an equal weight S&P fund over the s&p 500. That said, my preference right now is the dividend stocks like what you have because their valuations are attractive and the dividend yield provides downside protection.

I thought that too, but sometimes even if you're right you're wrong. I'm tired of making 0 money over a 7 year span, and I'm ready to ride they tech wave like everyone else.

Asset location is important. All Dividend aristocrats in your Roth IRA….not sure that's it.

The 3 you mentioned are all similar tech funds. Mix in some VTI or VOO.

aunuwyn08 said:

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I thought that too, but sometimes even if you're right you're wrong. I'm tired of making 0 money over a 7 year span, and I'm ready to ride the tech wave like everyone else.

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I would be really careful with ARKK if you want tech exposure. It had a spectacular run and gave it all back. Her 5 year return is essentially zero. The one tech exposure have added to recently is biotech. The space is ripe for consolidation of the smaller players as the big Pharma look to add to their pipelines.

one simple minor tip I've started implementing is contributing the full max from my cash holdings/emergency fund into VMFXX (or other money market fund) at the very start of year regardless when I want it invested
that way you can still DCA from the money market into your allocation throughout any timeframe but at least have up to $7K earning ~5% tax-free while on the sidelines, and in case of emergency could still withdraw the contributions penalty-free

aunuwyn08 said:

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I thought that too, but sometimes even if you're right you're wrong. I'm tired of making 0 money over a 7 year span, and I'm ready to ride the tech wave like everyone else.

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If you want tech just buy QQQ. Why complicate it?

SPY has plenty of tech exposure too. It's not sexy but your OP is a prime example of why people fail at something so inherently simple. I would stop wasting your time trying to find stuff that you think are good ideas or something that will outperform. Buy the broad market indexes and stop getting in your own way.

Sector ETFs.
I like these 5 sectors

Technology
Consumer Discretionary
Healthcare
Utilities
Consumer Staples


I like spider ETFs. Vanguard and Fidelity also have sector ETFs.

It's a low cost easy way to diversify investment into your well known companies but with more control than just buying the S&P500.

https://www.sectorspdrs.com/

bmks270 said:

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Sector ETFs.
I like these 5 sectors

Technology
Consumer Discretionary
Healthcare
Utilities
Consumer Staples


I like spider ETFs. Vanguard and Fidelity also have sector ETFs.

It's a low cost easy way to diversify investment into your well known companies but with more control than just buying the S&P500.

https://www.sectorspdrs.com/

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Why do you like these 5 sectors? Seems pretty broad. Maybe a better question is why you don't like financials, energy, or industrials, which is pretty much all you're missing from owning something like……the s&p 500

I hope you take this the right way the way i intend it. But i read your post as hey i haven't been making any money in my account. Rather than do the thing that is most likely to succeed s&p 500 funds i want you guys to tell me the next big thing. Just set it and forget it.

he made it pretty clear he already has sufficient exposure to total market indexes as well as other asset classes, and specifically targeting higher risk/yield funds that could potentially take more advantage of the tax benefit

seeing how roth is tax free, are there no unique strategies/investments you would use for a roth account versus a taxable one?

EliteZags said:

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he made it pretty clear he already has sufficient exposure to total market indexes as well as other asset classes, and specifically targeting higher risk/yield funds that could potentially take more advantage of the tax benefit

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Thank you. There is an optimum point for broad index funds, and I'm there across my portfolio.

My goal is to grow the ROTH aggressively since it's all free money at the end (allegedly).

Baby Billy said:

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bmks270 said:

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Sector ETFs.
I like these 5 sectors

Technology
Consumer Discretionary
Healthcare
Utilities
Consumer Staples


I like spider ETFs. Vanguard and Fidelity also have sector ETFs.

It's a low cost easy way to diversify investment into your well known companies but with more control than just buying the S&P500.

https://www.sectorspdrs.com/

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Why do you like these 5 sectors? Seems pretty broad. Maybe a better question is why you don't like financials, energy, or industrials, which is pretty much all you're missing from owning something like……the s&p 500

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Application of the 80/20 principle.

I looked at the historical return and volatility of each sector, as well as how strongly they're correlated to one another. My opinion is that investing in only 3-5 strategically selected sectors is better than investing in all of them.

There is diversification and then there is also something called diworsification.

Dividend investing in a Roth is too conservative. I swing for the fences with my Roth and balance that risk by being more conservative in my taxable accounts.

So if you were shooting for a 70/30 mix for all your accounts id be 100% growth equity in my Roth and then more conservative in my taxable accounts to get to an overall portfolio balance that I was looking for. 70/30 doesn't mean you should 70/30 in each account, but across all accounts.

Since the first trading day of 2017:

MO has a 40% decrease in share price and has had an average dividend yield of ~7.5% during those 7 years.

MCD has a 142% increase in share price and has had an average dividend yield of ~2.3% during those 7 years.

HON has a 61% increase in share price and has had an average dividend yield of ~2.3% during those 7 years.

You haven't disclosed your entire portfolio and the prices at which securities were purchased, but assuming that the securities mentioned above are reasonably representative of the entire portfolio, how have your total returns been 0?

My general advice is that if an investor can't stand to lag an index, he should buy that index. On the other hand, if an investor wants to outperform an index, his portfolio must necessarily be different than that index.

I think a high(er) beta index like QQQ is a perfectly reasonable choice (and the best of the index funds mentioned due to the diversification beyond the information technology sector) provided the investor can accept the volatility.

I'll be frank, however--the OP has heavy undertones of performance chasing. I think the most valuable thing that the OP can do is to define an investment strategy that the OP can stick with so that performance chasing doesn't doom returns over the long term.

Start tracking oil prices. Buy pipeline stocks during WTI dips when div yields are 7-8%.

You can't look at the performance of the equities over a period of time and evaluate any portfolio. It matters exactly when, date and time they were purchased and amount purchased.

I also didn't disclose every equity I owned, like I didn't talk about how I took a bath on GE or T.

Trust me, my returns over 7 years have been 0, actually, slightly negative.

billikenag said:

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My general advice is that if an investor can't stand to lag an index, he should buy that index. On the other hand, if an investor wants to outperform an index, his portfolio must necessarily be different than that index.

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An investor can buy an index and sell OTM CCs to outperform it. It requires a bit of babysitting your positions, but it's not that much work - maybe 1 hr a week.

Where is your ROTH held?

I always see a lot of VFIAX and VTI recommendations on here, but if you are at Fidelity I would look at FXAIX. Similar holdings with slightly better performance over 1, 3, and 5 years. And it will save you some fees.

Just throwing that out there since this seems to be a Vanguard heavy crowd.

Charles Schwab for now, we'll see how long it's there before another brokerage buys them out lol. Started with Scottrade then bought by TD Ameritrade then went to Chuck Schwab.

Why get all three? Just get one VOO or VGT or QQQ.

VOO if you want slightly more diversity but it's still got quite a bit of tech.

Personally I have VOO in my brokerage.

I have VOO in a taxable account, and mutual fund version in my 401.

So I do a mix of QQQ, SOHQ, PFM as my anchors in my Roth. I also do a Fidelity international fund, and a small amount of VIOO. Sometimes this mix beats the S&P, sometimes it doesn't.

JSKolache said:

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Start tracking oil prices. Buy pipeline stocks during WTI dips when div yields are 7-8%.

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Worth repeating and a very good tip.

Energy Transfer currently >9%.

I've owned Ares Capital for years, have not been disappointed. Current dividend yield is 9.47%.

P.H. Dexippus said:

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Energy Transfer currently >9%.

I've owned Ares Capital for years, have not been disappointed. Current dividend yield is 9.47%.

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If Energy Transfer is an MLP I would caution against holding that in any kind of IRA before consulting your CPA due to UBIT

Thanks for the heads up