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-   -   Allocated portfolio vs. Dow - I'm puzzled. (http://www.early-retirement.org/forums/f28/allocated-portfolio-vs-dow-im-puzzled-33145.html)

mountainhouse 02-05-2008 02:21 PM

Allocated portfolio vs. Dow - I'm puzzled.
 
I've been working my way through the Bernstein book. All makes great sense, until I look at how Vanguard 2020 tracks against the Dow. I'm surprised at how closely it tracks. If the 2020 fund represents diversification, I'd expect it wouldn't be this close.
^DJI: Basic Chart for DOW JONES INDUSTRIAL AVERAGE IN - Yahoo! Finance

twaddle 02-05-2008 03:16 PM

Target 2020 is 70% stock, and mostly large-cap just like the Dow, so I'd expect it to follow pretty closely.

International has been strongly correlated to US markets recently.

I like how they tossed 2% emerging market into the fund. I wonder how they determine these allocations.


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