I (24M) have been investing in my Roth IRA wrong… can I fix it?

I’ve heard that “time in the market is better than timing the market,” so two years ago, I did some light reading on how to start investing and started dumping into a Fidelity using the [Swensen Method](https://www.listenmoneymatters.com/swensen-portfolio/). For those who don’t know, that’s…
– 50% Domestic stocks
– 15% International stocks
– 15% Real estate
– 10% Emerging markets
– 5% US Bonds
– 5% Inflation-protected bonds.

Two things (1) I’M YOUNG and I’m realizing this is a very conservative investing strategy, (2) I checked my account today to see a +7.45% YTD return, while the S&P500 is doing >30%, and (3) it only took 5 minutes in this sub to learn that you all recommend young folks go 80-100% total stock market index fund ETF like VTI.

So I humbly ask: is there a way to sell some of my positions (without paying taxes or taking profits), and buying into something more “age-appropriate”? I’m just looking for advice to set my financial future. Thanks in advance Reddit.

View Source by SlipprySalmonmander

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7 Comments

  1. antoniosrevenge says:

    Just sell the shares you have and buy into the funds you now want – not sure what you mean by “not taking profits” but there is no taxable event when selling funds within a tax advantaged account

  2. noopinionshere says:

    Since it’s a Roth IRA, you can sell your positions, even if it’s at a gain, and not have to pay tax on those gains. So just sell all your positions and reinvest everything into your new strategy.

  3. geetarman84 says:

    Just sell and dump it all into VTI and forget about it.

  4. DiamondDallasHands says:

    Three Fund Portfolio. At your age though I’d say Two Fund portfolio actually cause no reason to buy bonds at your age. You could sell everything and put them into Index Funds that follow the US and International Market. My portfolio is currently 80/20 VTI and VXUS for example but there’s plenty of options out there.

    I made the same mistake of splitting everything into various Blue Chip stocks and if I had just Three Fund Portfolio’d at the covid dip I would have a lot more money right now. I noticed my return wasn’t nearly as good as the market and decided I’ll just put everything into market indexes. I don’t check on everything nearly as much and I know my portfolio is growing much faster than most people trying to invest in various blue chips. And that’s for real, most people don’t beat the market, so if you put your money into funds that follow the market you’re beating most other people’s portfolios. This strategy is very useful and honestly most average people should do it but they don’t.

  5. Morninglarke says:

    Life is a learning experience and investing is no different. You have choices: one, since it is in a Roth, sell what you don’t want and buy what you do. Second, wait until you add more money to your Roth and rebalance by putting all your new money into the more risky investments.

    Or three, do a combination of the two.

    You might also want to read more. If you want to minimize the time spent on your portfolio, try a two or three fund portfolio.

    Edited to add: having a less conservative portfolio is recommended for the young because you have time to recoup losses. Before becoming more aggressive, make sure that you are able to avoid panic selling and will stay the course in a downturn. Panic selling is ageless; it affects the young as well as the old. The hardest part of investing is to know yourself.

  6. testingforscience122 says:

    Yes if you are in a roth IRA you can sell them and no tax are realized until you withdraw. Good on you for reading up on a investing strategy. I would on learn a little more about a Roth IRA and how the taxes work. I would just keep a core of the portfolio in an index and if you really like a few stocks then own them. The bonds are useless to someone that is young and won’t withdraw from the IRA for a longtime. Now if you plan to take an early distribution (i would not do that, unless I have to) then maybe the bonds makes more since.

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