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23 years old- Which funds to invest 45K?
Old 04-29-2014, 09:51 PM   #1
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23 years old- Which funds to invest 45K?

Hello,

I'm 23 and got into investing last year. I currently max out the Roth IRA (5,500) and put in enough in the company 401k to get the full match. I'm receiving approximately $45,000 in the next week and would like to invest it all (I have an emergency fund already with no debt). As of now, my thought is to invest that money in a Vanguard Target Retirement fund. What other Vanguard funds should I look at and how many different funds should I invest the 45K in? I really like the idea of a passive fund since I don't know a whole lot about investing. Obviously I can afford some risk at my age. Thanks for your help. I appreciate it.
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Old 04-29-2014, 11:11 PM   #2
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That is as good of a starting place as any. I have most of my wife's rollover 401k's there. Otherwise research other lazy portfolios, depending on how complicated you want to get (and like I found, what makes sense when you're just starting out - if you're dealing with fund minimums, etc.).

Lazy portfolios - Bogleheads

-CC
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Old 04-30-2014, 06:39 AM   #3
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That's not a bad choice, but at your young age I would go 100% equities for growth over a long time horizon. I would take a hard look at the Vanguard Global Equity Fund or a combination of Total Stock Index, Total International Stock Index and Emerging Markets Stock Index Funds.
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Old 04-30-2014, 09:18 AM   #4
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Originally Posted by pb4uski View Post
That's not a bad choice, but at your young age I would go 100% equities for growth over a long time horizon. I would take a hard look at the Vanguard Global Equity Fund or a combination of Total Stock Index, Total International Stock Index and Emerging Markets Stock Index Funds.
+1 given your age.

But people have done a lot worse than a target date fund so that won't hurt you either. The terrific thing is that you're not going to blow it on a new car or something.
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Old 04-30-2014, 12:08 PM   #5
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If you look at the composition of the Vanguard Target Retirement funds you will see that they are composed of four Vanguard funds. You can select the equity funds out of those, or weight them how you like if you invest in them separately. That creates a basic "lazy" portfolio, though not quite as "lazy" as a Target Retirement fund itself. It's really only necessary if you would like to do something a little different than the Target Retirement fund.
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Old 05-01-2014, 09:48 PM   #6
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Even though, over the long term, a young person 100% in stocks will make the most money -- don't forget Rick Ferri's observation that young people aren't as risk tolerant as they should be. Many have pulled-out of stocks completely and permanently after losing a little money. Anyway, here's a good article on the topic:

The Flight Path Approach to Age-Based Asset Allocation
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