My Current 401k Allocation

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rockstar730
Posts: 6
Joined: Wed Sep 20, 2017 10:46 am

My Current 401k Allocation

Post by rockstar730 » Wed Sep 20, 2017 11:16 am

I've had a 401k for a year now I'm currently 34 years old. During the past year I let all contributions go to Fidelity 2050 target date fund originally (FFKHX) and now it changed to (FNSBX). After recently hitting a year I took everything out the target date fund and allocated it between Large Cap, Mid-Cap, Small Cap, International and Bond. Listed below are my options (not including target date funds) the ones with percentages is what I currently invested in. Any advice will be helpful I know I got a late start in investing so I chose the aggressive path since the market has been doing well.

Large CAP Options
FID CAP APPREC K (FCAKX)
FID CONTRAFUND K (FCNKX) 40%
INVESCO DIVRS DIV R6 (LCEFX)
TRP DIV GROWTH I (PDGIX)
VANGUARD INST INDEX (VINIX)

Mid-Cap Options
BARON GROWTH INST (BGRIX) 20%
FID EXT MKT IDX PR (FSEVX)
FID VALUE K (FVLKX)

Small Cap Options
LOOMIS SM CAP VAL I (LSSCX) 10%

International Options
FID DIVERSIFD INTL K (FDIKX) 20%
FID INTL INDEX PR (FSIVX)

Bond Options
MIP CL 2
FID US BOND IDX IS (FXSTX) 10%

Short Term Option
FID TREASURY ONLY MM (FDLXX)

selters
Posts: 436
Joined: Thu Feb 27, 2014 9:26 am

Re: My Current 401k Allocation

Post by selters » Wed Sep 20, 2017 1:11 pm

Moving out of the target date fund was probably a wise choice, since costs are higher in actively managed funds. But you moved into other actively managed funds with pretty high costs. You might want to reconsider those choices. The SatuMedia investment philosophy says that you should use index funds at the lowest possible cost. Here's a proposed portfolio that matches your desired allocation to non-US stocks and your desired allocation to bonds:

55% VANGUARD INST INDEX (VINIX)
15% FID EXT MKT IDX PR (FSEVX)
20% FID INTL INDEX PR (FSIVX)
10% FID US BOND IDX IS (FXSTX)

makes for an excellent Boglehead approved portfolio.

If you have an IRA, you should put some emerging markets in that, because FSIVX has developed markets only.

mega317
Posts: 1097
Joined: Tue Apr 19, 2016 10:55 am

Re: My Current 401k Allocation

Post by mega317 » Wed Sep 20, 2017 1:35 pm

Agree with above.

33 is not a very late start--you're doing well.

I would consider increasing the bond allocation somewhat. Many smart people on this forum recommend no less than 20%.

rockstar730
Posts: 6
Joined: Wed Sep 20, 2017 10:46 am

Re: My Current 401k Allocation

Post by rockstar730 » Mon Oct 30, 2017 3:49 pm

selters wrote:
Wed Sep 20, 2017 1:11 pm
Moving out of the target date fund was probably a wise choice, since costs are higher in actively managed funds. But you moved into other actively managed funds with pretty high costs. You might want to reconsider those choices. The SatuMedia investment philosophy says that you should use index funds at the lowest possible cost. Here's a proposed portfolio that matches your desired allocation to non-US stocks and your desired allocation to bonds:

55% VANGUARD INST INDEX (VINIX)
15% FID EXT MKT IDX PR (FSEVX)
20% FID INTL INDEX PR (FSIVX)
10% FID US BOND IDX IS (FXSTX)

makes for an excellent Boglehead approved portfolio.

If you have an IRA, you should put some emerging markets in that, because FSIVX has developed markets only.
Thanks for the response. I initially had similar thoughts. The bull market got me thinking actively managed funds in the interim. I'll play it out till January then rebalance and reallocate investments.

rockstar730
Posts: 6
Joined: Wed Sep 20, 2017 10:46 am

Re: My Current 401k Allocation

Post by rockstar730 » Mon Oct 30, 2017 3:51 pm

mega317 wrote:
Wed Sep 20, 2017 1:35 pm
Agree with above.

33 is not a very late start--you're doing well.

I would consider increasing the bond allocation somewhat. Many smart people on this forum recommend no less than 20%.
I'll maybe up it 5% more in the coming months but definitely when I'm 35 I'll do 20% bonds and gradually increase as I get older.

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Majormajor78
Posts: 894
Joined: Mon Jan 31, 2011 9:13 pm
Location: Chicagoish

Re: My Current 401k Allocation

Post by Majormajor78 » Mon Oct 30, 2017 4:18 pm

Have you run the portfolio through Morningstar's instant x-ray? I feel it gives you a better idea of your exposure than the names and labels they slap on the fund. If you want to deviate from the total market you should have an idea of why and how much. Compare your stock portfolio against a good total market fund like VTSAX to see where you are sitting and compare that to where you want to be.


http://portfolio.morningstar.com/Rtport ... Entry.aspx
"Oh, M. le Comte, it is only a loss of money which I have sustained... nothing worth mentioning, I assure you."

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ruralavalon
Posts: 11668
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: My Current 401k Allocation

Post by ruralavalon » Mon Oct 30, 2017 5:20 pm

Age 34 is not a late start. I see no need to try to be overly aggressive.

The most important thing to do at your age and just starting is to contribute as much as is practical to your 401k every year, and use very diversified mutual funds with low expense ratios.

You have some excellent broadly diversified, low expense ratio index funds offered in your 401k, you are fortunate.

rockstar730 wrote:
Wed Sep 20, 2017 11:16 am
I've had a 401k for a year now I'm currently 34 years old. During the past year I let all contributions go to Fidelity 2050 target date fund originally (FFKHX) and now it changed to (FNSBX). After recently hitting a year I took everything out the target date fund and allocated it between Large Cap, Mid-Cap, Small Cap, International and Bond. Listed below are my options (not including target date funds) the ones with percentages is what I currently invested in. Any advice will be helpful I know I got a late start in investing so I chose the aggressive path since the market has been doing well.

Large CAP Options
FID CAP APPREC K (FCAKX)
FID CONTRAFUND K (FCNKX) 40%
INVESCO DIVRS DIV R6 (LCEFX)
TRP DIV GROWTH I (PDGIX)
VANGUARD INST INDEX (VINIX)

Mid-Cap Options
BARON GROWTH INST (BGRIX) 20%
FID EXT MKT IDX PR (FSEVX)
FID VALUE K (FVLKX)

Small Cap Options
LOOMIS SM CAP VAL I (LSSCX) 10%

International Options
FID DIVERSIFD INTL K (FDIKX) 20%
FID INTL INDEX PR (FSIVX)

Bond Options
MIP CL 2
FID US BOND IDX IS (FXSTX) 10%

Short Term Option
FID TREASURY ONLY MM (FDLXX)
At age 34 I suggest around 20% in bonds. That's expected to significantly reduce portfolio volatility (risk) with relatively small impact on portfolio performance. Please see the wiki article SatuMedia Investment Philosophy, part 3 "Never bear too much or too little risk".

I suggest around 20-30% of stocks in international stock. Historically that would have captured about 84-99% of the maximum diversification benefit. For a pdf of a Vanguard paper on this subject Google "Considerations for Investing in Non-U.S Equities", see pp. 5-6.

I suggest using a total stock market index fund for U.S. stocks if available. If not a S&P 500 index fund (such as Vanguard Institutional Index Fund in your 401k) is good enough for the U.S. stock component of a portfolio. A S&P 500 index fund covers 81% of the U.S. stock market, and in the 25 years since the creation of the first total stock market index fund the two types of fund have had almost identical performance.

This is my suggestion:
60% Vanguard Institutional Index Fund (a S&P 500 index fund) (VINIX)
20% Fidelity International Index Fund Premium Class (FSIVX)
20% Fidelity U.S. Bond Index Fund Institutional (FXSTX)


If you have an IRA, then please consider some emerging markets in that, because Fidelity International Index Fund (FSIVX) in your 401k covers only developed markets.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

rockstar730
Posts: 6
Joined: Wed Sep 20, 2017 10:46 am

Re: My Current 401k Allocation

Post by rockstar730 » Mon Oct 30, 2017 6:04 pm

ruralavalon wrote:
Mon Oct 30, 2017 5:20 pm
Age 34 is not a late start. I see no need to try to be overly aggressive.

The most important thing to do at your age and just starting is to contribute as much as is practical to your 401k every year, and use very diversified mutual funds with low expense ratios.

You have some excellent broadly diversified, low expense ratio index funds offered in your 401k, you are fortunate.

rockstar730 wrote:
Wed Sep 20, 2017 11:16 am
I've had a 401k for a year now I'm currently 34 years old. During the past year I let all contributions go to Fidelity 2050 target date fund originally (FFKHX) and now it changed to (FNSBX). After recently hitting a year I took everything out the target date fund and allocated it between Large Cap, Mid-Cap, Small Cap, International and Bond. Listed below are my options (not including target date funds) the ones with percentages is what I currently invested in. Any advice will be helpful I know I got a late start in investing so I chose the aggressive path since the market has been doing well.

Large CAP Options
FID CAP APPREC K (FCAKX)
FID CONTRAFUND K (FCNKX) 40%
INVESCO DIVRS DIV R6 (LCEFX)
TRP DIV GROWTH I (PDGIX)
VANGUARD INST INDEX (VINIX)

Mid-Cap Options
BARON GROWTH INST (BGRIX) 20%
FID EXT MKT IDX PR (FSEVX)
FID VALUE K (FVLKX)

Small Cap Options
LOOMIS SM CAP VAL I (LSSCX) 10%

International Options
FID DIVERSIFD INTL K (FDIKX) 20%
FID INTL INDEX PR (FSIVX)

Bond Options
MIP CL 2
FID US BOND IDX IS (FXSTX) 10%

Short Term Option
FID TREASURY ONLY MM (FDLXX)
At age 34 I suggest around 20% in bonds. That's expected to significantly reduce portfolio volatility (risk) with relatively small impact on portfolio performance. Please see the wiki article SatuMedia Investment Philosophy, part 3 "Never bear too much or too little risk".

I suggest around 20-30% of stocks in international stock. Historically that would have captured about 84-99% of the maximum diversification benefit. For a pdf of a Vanguard paper on this subject Google "Considerations for Investing in Non-U.S Equities", see pp. 5-6.

I suggest using a total stock market index fund for U.S. stocks if available. If not a S&P 500 index fund (such as Vanguard Institutional Index Fund in your 401k) is good enough for the U.S. stock component of a portfolio. A S&P 500 index fund covers 81% of the U.S. stock market, and in the 25 years since the creation of the first total stock market index fund the two types of fund have had almost identical performance.

This is my suggestion:
60% Vanguard Institutional Index Fund (a S&P 500 index fund) (VINIX)
20% Fidelity International Index Fund Premium Class (FSIVX)
20% Fidelity U.S. Bond Index Fund Institutional (FXSTX)


If you have an IRA, then please consider some emerging markets in that, because Fidelity International Index Fund (FSIVX) in your 401k covers only developed markets.
I’m liking this allocation suggestion. What is the reason for not including the Mid-Cap index?

User avatar
ruralavalon
Posts: 11668
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: My Current 401k Allocation

Post by ruralavalon » Mon Oct 30, 2017 6:28 pm

rockstar730 wrote:
Mon Oct 30, 2017 6:04 pm
ruralavalon wrote:
Mon Oct 30, 2017 5:20 pm
Age 34 is not a late start. I see no need to try to be overly aggressive.

The most important thing to do at your age and just starting is to contribute as much as is practical to your 401k every year, and use very diversified mutual funds with low expense ratios.

You have some excellent broadly diversified, low expense ratio index funds offered in your 401k, you are fortunate.

rockstar730 wrote:
Wed Sep 20, 2017 11:16 am
I've had a 401k for a year now I'm currently 34 years old. During the past year I let all contributions go to Fidelity 2050 target date fund originally (FFKHX) and now it changed to (FNSBX). After recently hitting a year I took everything out the target date fund and allocated it between Large Cap, Mid-Cap, Small Cap, International and Bond. Listed below are my options (not including target date funds) the ones with percentages is what I currently invested in. Any advice will be helpful I know I got a late start in investing so I chose the aggressive path since the market has been doing well.

Large CAP Options
FID CAP APPREC K (FCAKX)
FID CONTRAFUND K (FCNKX) 40%
INVESCO DIVRS DIV R6 (LCEFX)
TRP DIV GROWTH I (PDGIX)
VANGUARD INST INDEX (VINIX)

Mid-Cap Options
BARON GROWTH INST (BGRIX) 20%
FID EXT MKT IDX PR (FSEVX)
FID VALUE K (FVLKX)

Small Cap Options
LOOMIS SM CAP VAL I (LSSCX) 10%

International Options
FID DIVERSIFD INTL K (FDIKX) 20%
FID INTL INDEX PR (FSIVX)

Bond Options
MIP CL 2
FID US BOND IDX IS (FXSTX) 10%

Short Term Option
FID TREASURY ONLY MM (FDLXX)
At age 34 I suggest around 20% in bonds. That's expected to significantly reduce portfolio volatility (risk) with relatively small impact on portfolio performance. Please see the wiki article SatuMedia Investment Philosophy, part 3 "Never bear too much or too little risk".

I suggest around 20-30% of stocks in international stock. Historically that would have captured about 84-99% of the maximum diversification benefit. For a pdf of a Vanguard paper on this subject Google "Considerations for Investing in Non-U.S Equities", see pp. 5-6.

I suggest using a total stock market index fund for U.S. stocks if available. If not a S&P 500 index fund (such as Vanguard Institutional Index Fund in your 401k) is good enough for the U.S. stock component of a portfolio. A S&P 500 index fund covers 81% of the U.S. stock market, and in the 25 years since the creation of the first total stock market index fund the two types of fund have had almost identical performance.

This is my suggestion:
60% Vanguard Institutional Index Fund (a S&P 500 index fund) (VINIX)
20% Fidelity International Index Fund Premium Class (FSIVX)
20% Fidelity U.S. Bond Index Fund Institutional (FXSTX)


If you have an IRA, then please consider some emerging markets in that, because Fidelity International Index Fund (FSIVX) in your 401k covers only developed markets.
I’m liking this allocation suggestion. What is the reason for not including the Mid-Cap index?
1) Vanguard Institutional Index Fund (VINIX) is not just stocks of large-cap companies, it also includes stocks of mid-cap companies.

The Morningstar style for for Vanguard Institutional Index Fund (a S&P 500 index fund) (VINIX) is:
28/29/30 - large
05/05/03 - mid
00/00/00 - small

On Morningstar for this fund just click the "portfolio" tab.


2) Also as mentioned historically there has been little benefit in adding to a S&P 500 index fund trying to mimic a total stock market index fund.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

rockstar730
Posts: 6
Joined: Wed Sep 20, 2017 10:46 am

Re: My Current 401k Allocation

Post by rockstar730 » Tue Oct 31, 2017 11:24 am

ruralavalon wrote:
Mon Oct 30, 2017 6:28 pm
rockstar730 wrote:
Mon Oct 30, 2017 6:04 pm
ruralavalon wrote:
Mon Oct 30, 2017 5:20 pm
Age 34 is not a late start. I see no need to try to be overly aggressive.

The most important thing to do at your age and just starting is to contribute as much as is practical to your 401k every year, and use very diversified mutual funds with low expense ratios.

You have some excellent broadly diversified, low expense ratio index funds offered in your 401k, you are fortunate.

rockstar730 wrote:
Wed Sep 20, 2017 11:16 am
I've had a 401k for a year now I'm currently 34 years old. During the past year I let all contributions go to Fidelity 2050 target date fund originally (FFKHX) and now it changed to (FNSBX). After recently hitting a year I took everything out the target date fund and allocated it between Large Cap, Mid-Cap, Small Cap, International and Bond. Listed below are my options (not including target date funds) the ones with percentages is what I currently invested in. Any advice will be helpful I know I got a late start in investing so I chose the aggressive path since the market has been doing well.

Large CAP Options
FID CAP APPREC K (FCAKX)
FID CONTRAFUND K (FCNKX) 40%
INVESCO DIVRS DIV R6 (LCEFX)
TRP DIV GROWTH I (PDGIX)
VANGUARD INST INDEX (VINIX)

Mid-Cap Options
BARON GROWTH INST (BGRIX) 20%
FID EXT MKT IDX PR (FSEVX)
FID VALUE K (FVLKX)

Small Cap Options
LOOMIS SM CAP VAL I (LSSCX) 10%

International Options
FID DIVERSIFD INTL K (FDIKX) 20%
FID INTL INDEX PR (FSIVX)

Bond Options
MIP CL 2
FID US BOND IDX IS (FXSTX) 10%

Short Term Option
FID TREASURY ONLY MM (FDLXX)
At age 34 I suggest around 20% in bonds. That's expected to significantly reduce portfolio volatility (risk) with relatively small impact on portfolio performance. Please see the wiki article SatuMedia Investment Philosophy, part 3 "Never bear too much or too little risk".

I suggest around 20-30% of stocks in international stock. Historically that would have captured about 84-99% of the maximum diversification benefit. For a pdf of a Vanguard paper on this subject Google "Considerations for Investing in Non-U.S Equities", see pp. 5-6.

I suggest using a total stock market index fund for U.S. stocks if available. If not a S&P 500 index fund (such as Vanguard Institutional Index Fund in your 401k) is good enough for the U.S. stock component of a portfolio. A S&P 500 index fund covers 81% of the U.S. stock market, and in the 25 years since the creation of the first total stock market index fund the two types of fund have had almost identical performance.

This is my suggestion:
60% Vanguard Institutional Index Fund (a S&P 500 index fund) (VINIX)
20% Fidelity International Index Fund Premium Class (FSIVX)
20% Fidelity U.S. Bond Index Fund Institutional (FXSTX)


If you have an IRA, then please consider some emerging markets in that, because Fidelity International Index Fund (FSIVX) in your 401k covers only developed markets.
I’m liking this allocation suggestion. What is the reason for not including the Mid-Cap index?
1) Vanguard Institutional Index Fund (VINIX) is not just stocks of large-cap companies, it also includes stocks of mid-cap companies.

The Morningstar style for for Vanguard Institutional Index Fund (a S&P 500 index fund) (VINIX) is:
28/29/30 - large
05/05/03 - mid
00/00/00 - small

On Morningstar for this fund just click the "portfolio" tab.


2) Also as mentioned historically there has been little benefit in adding to a S&P 500 index fund trying to mimic a total stock market index fund.
Got it did the research more thoroughly. So I take it Small Cap is not advised. My 10% in small cap has been my best performer most recently.

rkhusky
Posts: 4397
Joined: Thu Aug 18, 2011 8:09 pm

Re: My Current 401k Allocation

Post by rkhusky » Tue Oct 31, 2017 12:35 pm

rockstar730 wrote:
Tue Oct 31, 2017 11:24 am
Got it did the research more thoroughly. So I take it Small Cap is not advised. My 10% in small cap has been my best performer most recently.
There's nothing wrong with adding a small cap fund, it just adds a bit of extra complexity regarding rebalancing and such. The performance difference between the S&P 500 and a Total US Market fund (which has small caps) has been small in the past. You could also put small caps in an IRA, along with the Emerging Markets fund. There is no right answer (actually the right answer will be seen in hindsight, but is unknowable now).

User avatar
ruralavalon
Posts: 11668
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: My Current 401k Allocation

Post by ruralavalon » Tue Oct 31, 2017 12:48 pm

rkhusky wrote:
Tue Oct 31, 2017 12:35 pm
rockstar730 wrote:
Tue Oct 31, 2017 11:24 am
Got it did the research more thoroughly. So I take it Small Cap is not advised. My 10% in small cap has been my best performer most recently.
There's nothing wrong with adding a small cap fund, it just adds a bit of extra complexity regarding rebalancing and such. The performance difference between the S&P 500 and a Total US Market fund (which has small caps) has been small in the past. You could also put small caps in an IRA, along with the Emerging Markets fund. There is no right answer (actually the right answer will be seen in hindsight, but is unknowable now).
There is nothing wrong with keeping small-cap if you wish, just perhaps not necessary or very helpful if the last 25 years repeat. Nobody knows for certain.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

rockstar730
Posts: 6
Joined: Wed Sep 20, 2017 10:46 am

Re: My Current 401k Allocation

Post by rockstar730 » Mon Nov 06, 2017 2:57 pm

ruralavalon wrote:
Mon Oct 30, 2017 6:28 pm
rockstar730 wrote:
Mon Oct 30, 2017 6:04 pm
ruralavalon wrote:
Mon Oct 30, 2017 5:20 pm
Age 34 is not a late start. I see no need to try to be overly aggressive.

The most important thing to do at your age and just starting is to contribute as much as is practical to your 401k every year, and use very diversified mutual funds with low expense ratios.

You have some excellent broadly diversified, low expense ratio index funds offered in your 401k, you are fortunate.

rockstar730 wrote:
Wed Sep 20, 2017 11:16 am
I've had a 401k for a year now I'm currently 34 years old. During the past year I let all contributions go to Fidelity 2050 target date fund originally (FFKHX) and now it changed to (FNSBX). After recently hitting a year I took everything out the target date fund and allocated it between Large Cap, Mid-Cap, Small Cap, International and Bond. Listed below are my options (not including target date funds) the ones with percentages is what I currently invested in. Any advice will be helpful I know I got a late start in investing so I chose the aggressive path since the market has been doing well.

Large CAP Options
FID CAP APPREC K (FCAKX)
FID CONTRAFUND K (FCNKX) 40%
INVESCO DIVRS DIV R6 (LCEFX)
TRP DIV GROWTH I (PDGIX)
VANGUARD INST INDEX (VINIX)

Mid-Cap Options
BARON GROWTH INST (BGRIX) 20%
FID EXT MKT IDX PR (FSEVX)
FID VALUE K (FVLKX)

Small Cap Options
LOOMIS SM CAP VAL I (LSSCX) 10%

International Options
FID DIVERSIFD INTL K (FDIKX) 20%
FID INTL INDEX PR (FSIVX)

Bond Options
MIP CL 2
FID US BOND IDX IS (FXSTX) 10%

Short Term Option
FID TREASURY ONLY MM (FDLXX)
At age 34 I suggest around 20% in bonds. That's expected to significantly reduce portfolio volatility (risk) with relatively small impact on portfolio performance. Please see the wiki article SatuMedia Investment Philosophy, part 3 "Never bear too much or too little risk".

I suggest around 20-30% of stocks in international stock. Historically that would have captured about 84-99% of the maximum diversification benefit. For a pdf of a Vanguard paper on this subject Google "Considerations for Investing in Non-U.S Equities", see pp. 5-6.

I suggest using a total stock market index fund for U.S. stocks if available. If not a S&P 500 index fund (such as Vanguard Institutional Index Fund in your 401k) is good enough for the U.S. stock component of a portfolio. A S&P 500 index fund covers 81% of the U.S. stock market, and in the 25 years since the creation of the first total stock market index fund the two types of fund have had almost identical performance.

This is my suggestion:
60% Vanguard Institutional Index Fund (a S&P 500 index fund) (VINIX)
20% Fidelity International Index Fund Premium Class (FSIVX)
20% Fidelity U.S. Bond Index Fund Institutional (FXSTX)


If you have an IRA, then please consider some emerging markets in that, because Fidelity International Index Fund (FSIVX) in your 401k covers only developed markets.
I’m liking this allocation suggestion. What is the reason for not including the Mid-Cap index?
1) Vanguard Institutional Index Fund (VINIX) is not just stocks of large-cap companies, it also includes stocks of mid-cap companies.

The Morningstar style for for Vanguard Institutional Index Fund (a S&P 500 index fund) (VINIX) is:
28/29/30 - large
05/05/03 - mid
00/00/00 - small

On Morningstar for this fund just click the "portfolio" tab.


2) Also as mentioned historically there has been little benefit in adding to a S&P 500 index fund trying to mimic a total stock market index fund.
Before I pull the trigger. Any other Boglehead/s have any input? I'm liking the simplicity of this suggestion but also want to maximize gains not saying that this won't help just making sure all steps are covered. :sharebeer

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