Asset Allocator's question

[harley]

I'm curious. Of those of you who do AA, especially inVanguard, how many use the equivalent of some percentage Total Stock Market, some of Total Bond Market, some International (like ex-US), maybe with some REIT and commodities thrown in. This would be in contrast to holding specific parts of the market, like large/mid/small, growth/value, etc. Most of what I've seen since joining looks like slice and dice, as opposed to just holding the whole thing.

I'd appreciate our responses, since I'm still trying to figure out how I want to do it.

 

[Lusitan]

how many use the equivalent of some percentage Total Stock Market, some of Total Bond Market, some International (like ex-US), maybe with some REIT and commodities thrown in.

That's pretty much what I have done when I created my own AA.

In my case, the reason was that it allowed me to hold fewer funds and more quickly reach Admiral shares in some funds, for the lower expense ratio.

Total Stock Market (US)
Total Int'l Stock Market
Total Bond Market
REIT

Down the road I may look to slice and dice it more a la "The Four Pillars of Investing" but I haven't had the time or need to look into it yet.

 

[Urchina]

Harley, I got all excited and wrote our AA down -- and then realized that we slice and dice more than your question asked.

Thank heavens for the edit key.

Our AA started out pretty simple but then got all tangled up in multiple retirement accounts (not all of which have Vanguard funds as options).

In the beginning, it looked something like this:

70% VTI (Total stock market index)
10% Vanguard Total International (ex-us)
20% total bond

We've since split it up a little (large cap/small cap/total international/intermediate bond/REIT/cash, considering high-yield bonds) but will probably hang there for a while. We're currently working on increasing our international exposure and decreasing our percentage of US stocks. VEU is down about 40% from last year, so they're at a good discount right now.

 

[MasterBlaster]

Lusitan:

Isn't that Scott Burn's (modified) couch potato portfolio. Or something pretty close to it.

 

[Lusitan]

Lusitan:

Isn't that Scott Burn's (modified) couch potato portfolio. Or something pretty close to it.

Wouldn't be surprised - I don't think I got the idea from Scott Burns, but I'm a couch potato kinda guy