I (might) need help simplifying my retirement accounts

[A Bird In Hand]

It is pretty close to true. The reality is that by changing the mix of these three funds you can cover a lot of situations.

I suppose so. Grrr, I'm suffering from analysis paralysis with my Vanguard funds. In theory it should be a fairly simple exercise of choosing my desired allocation in 3-4 funds, then exchanging my existing 15 funds for those. In practice, I have difficultly letting go of some of the managed funds I've had for a long time...PRIMECAP Admiral, Wellington, Wellesley, etc. Maybe this means I haven't researched enough yet to have adequate peace of mind about my decision. Or maybe I'm just over-thinking things here.

 

[REWahoo]

I suppose so. Grrr, I'm suffering from analysis paralysis with my Vanguard funds. In theory it should be a fairly simple exercise of choosing my desired allocation in 3-4 funds, then exchanging my existing 15 funds for those. In practice, I have difficultly letting go of some of the managed funds I've had for a long time...PRIMECAP Admiral, Wellington, Wellesley, etc. Maybe this means I haven't researched enough yet to have adequate peace of mind about my decision. Or maybe I'm just over-thinking things here.

Maybe you'd be more comfortable doing it in steps rather than all at once?

 

[MichaelB]

I suppose so. Grrr, I'm suffering from analysis paralysis with my Vanguard funds. In theory it should be a fairly simple exercise of choosing my desired allocation in 3-4 funds, then exchanging my existing 15 funds for those. In practice, I have difficultly letting go of some of the managed funds I've had for a long time...PRIMECAP Admiral, Wellington, Wellesley, etc. Maybe this means I haven't researched enough yet to have adequate peace of mind about my decision. Or maybe I'm just over-thinking things here.

It is hard to change. Especially when you have many different investments, you risk focusing more on the positive performance of a few and not on the overall performance of the portfolio. One thing that has surprised me over the years is how so many members of different forums have similar investment results with very different portfolios. A simple portfolio should perform just as well and be much easier to manage.

 

[Hud3]

I came up with 50% bonds and 50% stocks for my risk profile. Here's what the Vanguard analyst recommended for me...

50 % in Total Bond Market Index, and the rest in...

Strategic Equity
Morgan Growth
Total International Stock Index
Windsor II Fund
Total Stock Market Index
Explorer

plus the Money Market fund for cash.

The breakdown within the stock fund segment is done to emulate the broad market.

Their initial recommendation is a starting point for a discussion. For example, they recommended a different growth fund, but I liked Morgan Growth. We discussed it and the analyst felt that Morgan was a good choice, so that's what I did. You don't have to accept the recommendations at face value, and the discussions you will have are very informative.

This approach isn't for everyone, obviously. I am not someone who enjoys researching and picking individual stocks. I don't even like spending a lot of time researching mutual funds. That's why the Vanguard approach fits me so well. I don't have to even think about it but once a year, although I do check balances and performance regularly just to see how things are going.

We've been living on this diversified mutual fund portfolio approach (neither of us has a pension) for 11 years and it works fine for us.

 

[LOL!]

The portfolio that Hud3 presented from Vanguard is typical of what Vanguard was recommending years ago. One can see that from past posts asking "Is this Vanguard recommended portfolio any good?"

Nowadays, Vanguard recommends almost exclusively the 3-fund portfolio also found inside their Target Retirement funds. One can see that from modern posts asking "Is this Vanguard recommended portfolio any good?"

As pb4uski wrote, different percentages of those 3 funds will be good for many different situations. Also note that the Vanguard Total International Index fund did not exist in its current incarnation until a couple of years ago, so one could even get this kind of 3-fund portfolio until the past couple of years.

 

[A Bird In Hand]

Thanks to everyone for all the advice.

Maybe you'd be more comfortable doing it in steps rather than all at once?

That's just what I did. My Vanguard retirement plan is in 2 parts: one consisting of employer contributions and one consisting of my own contributions. I reallocated the former to PRIMECAP, Wellesley, and Wellington in roughly equal proportions. I have enough in these to qualify for Admiral shares, so expenses should be pretty low. The latter I reallocated to Total Stock Market Index Signal Shares (55%) , Total International Stock Index Fund Investor Shares (15%), and Total Bond Market Index Fund Institutional Shares (30%).

So now I have 6 funds instead of 15, and it makes a whole lot more sense to me. There was a lot of redundancy before, and there's substantially less now. It will also be interesting to see how the managed funds stack up against the index funds over time.