knockoutned
Dryer sheet wannabe
Note: I am cross-posting this on the Boglehead's forum--apologies to those who read both.
Hi, I am an American living and working in Japan, invested 100% in equities, and I am looking to add a bond fund to my asset allocation, gradually working toward a 80/20 stock/bond mix. I am a big fan of simplicity and making my investments automatic (then more or less forgetting about them). Right now I my AA looks like this:
Vanguard Total Stock Market Index: 60%
Vanguard FTSE All-World ex-US Index: 40%
This is about $60,000, completely in taxable accounts, and I'm thinking about switching that to a 50/50 allocation. I also have $8500 of the S&P 500 fund in a Roth IRA from when I was working in the States. For more details about my situation and how I got to this point, you can see this post:
http://www.early-retirement.org/for...omeone-in-late-20s-taxable-account-34615.html
So, I'm finally ready to add bonds to my portfolio but am unsure which Vanguard bond fund is the best fit for me. Over the past day and a half, I have consumed hundreds of threads on this and other forums, several chapters of Bernstein and Boglehead books, and a giant bag of pistachios. I'm still not sure what to do (though the pistachios were delicious).
My expatriate status is bringing most of the confusion. I can't contribute to a Roth IRA because I don't have earned income in America, yet everyone says bonds should go in tax-sheltered accounts. That's the bad news. The good news is that, since I don't have income in America, I think I don't have to pay taxes on the dividends that fall under my personal exemption and standard deduction (which I believe is $9350 for 2010).
Am I correct about this dividend exemption, and if so, is it perfectly okay for me to have a bond fund in a taxable account? If so, I will go ahead and buy the Total Bond Market fund (VBMFX). Or should I change my Roth from the S&P 500 fund to a bond fund? I would rather not do that, and it would limit me to $8500 in bonds, but I am open to ideas.
Any input on this would be appreciated.
Hi, I am an American living and working in Japan, invested 100% in equities, and I am looking to add a bond fund to my asset allocation, gradually working toward a 80/20 stock/bond mix. I am a big fan of simplicity and making my investments automatic (then more or less forgetting about them). Right now I my AA looks like this:
Vanguard Total Stock Market Index: 60%
Vanguard FTSE All-World ex-US Index: 40%
This is about $60,000, completely in taxable accounts, and I'm thinking about switching that to a 50/50 allocation. I also have $8500 of the S&P 500 fund in a Roth IRA from when I was working in the States. For more details about my situation and how I got to this point, you can see this post:
http://www.early-retirement.org/for...omeone-in-late-20s-taxable-account-34615.html
So, I'm finally ready to add bonds to my portfolio but am unsure which Vanguard bond fund is the best fit for me. Over the past day and a half, I have consumed hundreds of threads on this and other forums, several chapters of Bernstein and Boglehead books, and a giant bag of pistachios. I'm still not sure what to do (though the pistachios were delicious).
My expatriate status is bringing most of the confusion. I can't contribute to a Roth IRA because I don't have earned income in America, yet everyone says bonds should go in tax-sheltered accounts. That's the bad news. The good news is that, since I don't have income in America, I think I don't have to pay taxes on the dividends that fall under my personal exemption and standard deduction (which I believe is $9350 for 2010).
Am I correct about this dividend exemption, and if so, is it perfectly okay for me to have a bond fund in a taxable account? If so, I will go ahead and buy the Total Bond Market fund (VBMFX). Or should I change my Roth from the S&P 500 fund to a bond fund? I would rather not do that, and it would limit me to $8500 in bonds, but I am open to ideas.
Any input on this would be appreciated.
