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Fund Based on 4 Pillars?
Old 10-18-2007, 10:59 AM   #1
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Fund Based on 4 Pillars?

Hi all,

I'm reading Four Pillars of Investing and the Bogleheads guide. I am not through reading them completely, so I don't know all the theory yet. A quick question comes to mind: Is there a fund which follows this model and rebalances accordingly?


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Old 10-18-2007, 11:23 AM   #2
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Not really. You'll see several different portfolios described in those books, each suited to a particular investor's circumstances. It's tough to even find a single fund family that offers all the asset classes described, let alone a suitable blend. You'd also give up the ability to optimize your allocation from a taxation standpoint by going with a single fund.

The best "hands-off" approach might be to simply put your investments with a low-cost DFA advisor and let them take a small cut.


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Old 10-18-2007, 01:01 PM   #3
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Or if this is tax-deferred/free money, you'd be hard pressed to beat a Target Retirement fund from Vanguard or T Rowe Price. Vanguard if you prefer indexing, T Rowe if you prefer a bit of active management.

You just buy the date you plan to retire, and they take it from there.
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Old 10-18-2007, 06:52 PM   #4
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After I read the 4 Pillars (wish I had read it years ago), I went looking and DFA was the fund family (mentioned often in the book) that had the range of funds I wanted. Only problem with DFA is that you need a financial planner for access. I found one (Evanson Asset Mgt) that charges a flat fee so my costs are starting at what I consider an acceptable level for what I am getting and they will not increase as my portfolio grows.
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Old 10-18-2007, 08:06 PM   #5
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I read the book and loved it. I opted not to go with DFA. You can get pretty darned good access to all the asset classes with ETF's and Vanguard funds. It's not hands-free but you don't need an advisor.
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Old 10-18-2007, 08:21 PM   #6
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I read the 4 pillar book and created a diversified portfolio similar to one of the portfolios outlined in the book using mostly Vanguard funds. But even Vanguard does not offer funds for every asset class (such as international bonds). However a Vanguard brokerage account gives me access to non Vanguard funds that can be bought and sold wihout paying any fees and/or loads, so it should be quite easy to find what you need (plus off course you have access to any ETF you want if you cannot find a suitable fund). The cool thing about using Vanguard for most of my fund choices is that I can keep my portfolio's overall expense ratio low (0.37%) which can be challenging once you start investing in less conventional asset classes.

I don't know of any one fund replicating the "four pillar" portfolios.

42 y/o, married, retirement portfolio = 43 x annual expenses
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