Portfolio IQ: Vanguard's VTI, Cash Achieve Advisor's Goal

Don Bennyhoff invests his life savings in one ETF, and he still sleeps at night.

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Reviewed by: etf.com Staff
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Edited by: Kent Thune

Don BennyhoffFinancial advisors see all kinds of personal portfolios, but probably not many like the strategy employed by Don Bennyhoff, who is surprisingly comfortable with all of his money invested in a single ETF, along with some cash.

The 59-year-old founder of Bennyhoff & Co, an outsourced CIO firm for financial advisors, has been investing this way for most of his adult life and can’t recall the last time he had any exposure to fixed income.

He can, however, recall some of the gut-twisting rides over the years, including watching his life savings shrink by 55% between October 2007 and March 2009.

Type
% of Holdings
Stocks
64%
Bonds
0%
Short Term Reserves
36%
Others
0%


But, through it all, he insists his investment strategy is more about his state of mind than the state of the economy or the financial markets.

“Most of the time, you see risk questionnaires that ask about risk tolerance in hypothetical terms,” he said. “But until you’ve experienced a 25% or 30% decline in your portfolio, you can’t really say how you would react.”

With a 64% allocation to the Vanguard Total Stock Market ETF (VTI) that provides total market exposure to the U.S. equity space, Bennyhoff is technically diversified. And up until a couple years ago, he balanced that U.S. equity exposure with a 40% weighting in the Vanguard Total International Stock ETF (VXUS).

But that was still all equity all the time.

Bennyhoff, who lives in Phoenixville, Pa., with his wife and two adult children, sold off his VXUS position in May 2023 when he briefly entered retirement after the sale of Liberty Wealth Advisors, where he worked as chief investment officer.

The proceeds from VXUS, representing about 40% of his portfolio, were moved to a money market account where he has been earning yields in the 5% range, so he doesn’t plan to make any changes until interest rates get a little lower.

VTI Achieves Stock Return Goal

“The stock and cash combined have well exceeded the return I require from my portfolio,” he said. “Achieving my stock return goal with only 60% in stocks, means I can afford to be patient.”

Bennyhoff fully recognizes the potential benefits of bonds in a portfolio to act as a ballast in times of equity market volatility, but after a few decades of riding the waves, he has essentially become programed for the more extreme rides.

“I’ve always embraced 100% equity,” he said. “I entirely agree with the line of thinking that bonds are the ballast in a portfolio, but in the beginning, I don’t think I knew anything else; I just knew myself and I knew what I could run into.”
Bennyhoff said most of the portfolio shocks over the years where easier to absorb “because I believed in what I was doing, and I knew I had money going in and was buying more through payroll deductions.”

Asked whether he would recommend his aggressive investing approach to others, especially someone just starting their career, Bennyhoff went back to his original perspective about one’s state of mind.

“I would encourage someone to set up a retirement account and contribute to your maximum ability, regardless of whether it’s 100% bonds or stocks,” he said. “Especially when you’re young, the allocation is a distraction and is less relevant than the amount they’re saving. Focus on the contribution.”

The Portfolio IQ series offers a unique look inside the personal portfolios of professionals who are tasked with providing financial advice for a living.

Excluding total dollar amounts, this feature details the specific holdings of individual financial professionals along with the story of how and why each portfolio is built and managed in a particular manner.

The goal is to illustrate that there are multiple ways to navigate market conditions and economic cycles, while factoring in the significant context of where a specific financial professional is in his or her life and career.
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