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Old 06-13-2021, 06:59 PM   #41
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I also did not see those 2 funds in the link you posted as 85/15?
True, but did you see

85% Vanguard 500 Index Fund (VFIAX)
15% Vanguard Small-Cap Index Fund (VSMAX)?

When you compare FXAIX with VFIAX, and VSCPX with VSMAX, what do you find?
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Old 06-13-2021, 07:05 PM   #42
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Originally Posted by SevenUp View Post
True, but did you see

85% Vanguard 500 Index Fund (VFIAX)
15% Vanguard Small-Cap Index Fund (VSMAX)?

When you compare FXAIX with VFIAX, and VSCPX with VSMAX, what do you find?
They are both combos of total stock market?
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Old 06-13-2021, 07:33 PM   #43
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They are both combos of total stock market?
How does FXAIX compare with VFIAX?
How does VSCPX compare with VSMAX?
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Old 06-13-2021, 07:41 PM   #44
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How does FXAIX compare with VFIAX?
How does VSCPX compare with VSMAX?
I am confused.

You mean 85% FXAIX and 15% VSCPX?

That was what Bada Bing said.
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Old 06-13-2021, 08:07 PM   #45
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I am confused.

You mean 85% FXAIX and 15% VSCPX?

That was what Bada Bing said.
Correct.

You said you did not see that specific combination in the Bogleheads wiki article.

I'm asking you to compare the funds Bada Bing mentioned with one of the combinations in the Bogleheads wiki article.

How does FXAIX compare with VFIAX?
How does VSCPX compare with VSMAX?
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Old 06-14-2021, 12:35 AM   #46
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Would it be better for me to do one fund?
You said you wanted one fund. You said you wanted simple. One fund is about as simple as one can get, I think simple is a good way to go. So, yes one fund is good.

You gave a list of fund choices available to you, and the list included VSCPX.

I suggest that as a good "one fund" choice. It is an index fund of small cap stocks. Over long long periods of time, studies have shown that small cap stocks outperform larger cap stocks. This particular fund has an expense ratio of .03%. That is another good thing, keep costs low. This fund is an index fund, so you get broad diversification within the small cap sector. And the turnover was 22% recently, relatively low, another good thing in an index fund. You also said you want 100% equity, and VSCPX also does that, in the small cap sector.

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Old 06-14-2021, 01:26 AM   #47
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I am confused.

You mean 85% FXAIX and 15% VSCPX?

That was what Bada Bing said.
Here is a graph of the returns of VTSAX and a 2 fund portfolio of FXAIX + VSCPX 85%/15%. As you can see, the performance is virtually identical over the 10 year span. The two lines exactly overlay each other until they diverge just enough to see the separation in the last 6 months. They move in lockstep. That is because VTSAX (the total USA stock index) is made up of virtually the same components as the 85/15 mix of S&P500 + USA small cap index.

The broader question is what do you want for a portfolio ? The total stock index is a very popular choice for a portfolio foundation, but there is nothing magic about it. You would give up very little by choosing just the S&P500 index alone. It depends on how much you value the slightly greater simplicity of a single fund verses the slightly greater diversification of having the total stock market index represented by two funds. Kind of a coin toss and the eventual outcome is likely to be very close to the same. Your choice.

You can generate such portfolio comparisons using the site Portfolio Visualizer.
You might play with the interface using popular Total USA stock funds like VTSAX, VTI, SCHB, ITOT. They are all functionally the same thing, just different brands of the same commodity. https://www.portfoliovisualizer.com/
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Old 06-14-2021, 02:18 PM   #48
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You said you wanted one fund. You said you wanted simple. One fund is about as simple as one can get, I think simple is a good way to go. So, yes one fund is good.

You gave a list of fund choices available to you, and the list included VSCPX.

I suggest that as a good "one fund" choice. It is an index fund of small cap stocks. Over long long periods of time, studies have shown that small cap stocks outperform larger cap stocks. This particular fund has an expense ratio of .03%. That is another good thing, keep costs low. This fund is an index fund, so you get broad diversification within the small cap sector. And the turnover was 22% recently, relatively low, another good thing in an index fund. You also said you want 100% equity, and VSCPX also does that, in the small cap sector.

There are a million stories in the Naked City. This has been one of them.
It doesn't have to be 1 fund. 1 fund was to keep things simple. I am an aggressive investor meaning downturns like 2008 and 2020 donít bother me since I would be DCA.
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Old 06-14-2021, 04:31 PM   #49
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I am an aggressive investor meaning downturns like 2008 and 2020 donít bother me since I would be DCA.
Another plus for the small cap index fund then, you being an aggressive investor. So, I would still recommend that one fund.

Small caps index would have a higher level of volatility then a large cap index fund such as S&P500, but your risk profile as stated, that should be ok.

Over long long periods of time, small cap indexes have outperformed large cap indexes, so you would be getting rewarded for enduring the larger volatility---over long long periods.
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Old 06-14-2021, 06:42 PM   #50
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Here is a graph of the returns of VTSAX and a 2 fund portfolio of FXAIX + VSCPX 85%/15%. As you can see, the performance is virtually identical over the 10 year span. The two lines exactly overlay each other until they diverge just enough to see the separation in the last 6 months. They move in lockstep. That is because VTSAX (the total USA stock index) is made up of virtually the same components as the 85/15 mix of S&P500 + USA small cap index.

The broader question is what do you want for a portfolio ? The total stock index is a very popular choice for a portfolio foundation, but there is nothing magic about it. You would give up very little by choosing just the S&P500 index alone. It depends on how much you value the slightly greater simplicity of a single fund verses the slightly greater diversification of having the total stock market index represented by two funds. Kind of a coin toss and the eventual outcome is likely to be very close to the same. Your choice.

You can generate such portfolio comparisons using the site Portfolio Visualizer.
You might play with the interface using popular Total USA stock funds like VTSAX, VTI, SCHB, ITOT. They are all functionally the same thing, just different brands of the same commodity. https://www.portfoliovisualizer.com/
I am an aggressive investor and not emotional at all when it comes up downturn like 2008 and 2020 because I would be DCA on it. Does funds like VTSAX and FZROX fall into this category?

My retirement age is anywhere from 55-60 with $2M goal. I am a single male, 43, no kids.
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Old 06-14-2021, 07:38 PM   #51
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Another plus for the small cap index fund then, you being an aggressive investor. So, I would still recommend that one fund.

Small caps index would have a higher level of volatility then a large cap index fund such as S&P500, but your risk profile as stated, that should be ok.

Over long long periods of time, small cap indexes have outperformed large cap indexes, so you would be getting rewarded for enduring the larger volatility---over long long periods.
So small cap indexes would outperform something like VTSAX/FXROX?
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Old 06-14-2021, 08:21 PM   #52
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So small cap indexes would outperform something like VTSAX/FXROX?
Maybe, maybe not.

See Which are best recommended Boglehead small-cap value indices? Is it worth to tilt to small cap value? for much more detail.
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Old 06-14-2021, 09:04 PM   #53
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Or underperform?
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Old 06-14-2021, 09:11 PM   #54
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So small cap indexes would outperform something like VTSAX/FXROX?
If you want a crystal ball, you will need to supply your own.

Seems like you are perhaps overanalyzing things.

Pick a rationale, pick a fund (or two, or three, if your rationale points you that way) and run with it.
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Old 06-14-2021, 09:14 PM   #55
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If you want a crystal ball, you will need to supply your own.

Seems like you are perhaps overanalyzing things.

Pick a rationale, pick a fund (or two, or three, if your rationale points you that way) and run with it.
Sorry for all these questions. I am trying to keep things simple like JL Collins says in his book.

bada bing suggestion of the 85/15, 2 index fund approach seems like that is what I am leaning on.
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Old 06-14-2021, 09:23 PM   #56
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Sorry for all these questions. I am trying to keep things simple like JL Collins says in his book.

bada bing suggestion of the 85/15, 2 index fund approach seems like that is what I am leaning on.
That is simple, provides broad diversification, low costs, and should serve you well.

Good luck!
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Old 06-14-2021, 09:25 PM   #57
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That is simple, provides broad diversification, low costs, and should serve you well.

Good luck!
Yes but I donít mind taking a big hit like in 2008 and 2020 so I can DCA. These 2 funds would satisfy that?
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Old 06-15-2021, 06:34 AM   #58
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Seems like you are perhaps overanalyzing things.
I see a lot of questions. I don't see much analyzing.

Assuming the OP is legit, I think they need the hand-holding of an FA. But I'm not at all sure my assumption is valid.
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Old 06-15-2021, 03:45 PM   #59
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I think your bigger problem is that you are paying Edward Jones a lot of money to put you in funds like Vanguard Target Retirement 2045 that you can easily get yourself for free just by going to the Vanguard Web site or as ETFs.

That is really what will bleed your future returns more than fussing about which specific funds(s) you are in.

1% annual fee x 30 years = 30% of your total portfolio getting transferred to your "advisor" by the time you are age 73. Is the advice you are getting worth 1/3 of your total retirement nest egg?

EDIT: I re-read your post and see that you left Edward Jones so ignore the above. In any event, regarding your portfolio:

Quote:
VANGUARD TARGET 2045 - 16%
FID 500 INDEX - 30%
SMALL CAP VANG SM CP IDX IS PL - 13%
FID GLB EX US IDX - 23%
BOND INDEX FUND - 11%
INTERNATIONAL FUND - 7%.
My comment is that Target Retirement 2045 is a comprehensive one-and-done fund that has four basic components
Vanguard Total Stock Market (53%)
Vanguard Total Int'l Stock Market (36%)
Vanguard Total Bond Market (7.7%)
Vanguard Int'l Bond market (3.2%)

The other components of your portfolio (S&P500, Small Cap, Int'l, and Bond funds) all basically duplicate the holdings that are already in Target Retirement 2045.

I would recommend dumping your entire portfolio into Target Retirement 2045 if it matches your desired stock vs bond ratio. Or pick another Target Retirement Fund if you want a different stock vs bond ratio. And then if you want to fine tune things you can do so by adding a fund here or there on the margins. For example, if you like Target Retirement 2045 but want a little lower Int'l allocation, just supplement it with Vanguard Total Stock Market and that will drop your Int'l allocation. If you want to raise it, supplement it with Total Int'l Stock. And so forth. If you have balances pushing into the 7 figures then you can reduce your fees a bit by buying the individual components of the Target Retirement funds instead (just building it yourself by hand). But at lower account balances the difference in fees is probably trivial.

In other words, pick one comprehensive fund as your core holding and then adjust as necessary to tweak your allocations as necessary. For what it's worth. I used to do this obsessively and had maybe 10 different funds. Then I eventually decided that the Vanguard people were smarter than I was and I just decided to stick with their core holdings. My wife and I are well into the 7 figures in our retirement holdings and it is all basically in two target retirement funds: Vanguard Target Retirement 2035 and the Federal TSP Target Retirement 2030 funds. With those two funds we own the ENTIRE domestic and international stock and bond markets. Any additional funds would just duplicate those holdings in slightly different proportions. To what end? I'm not smart enough to know what tilts to make anyway.
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Old 06-15-2021, 03:49 PM   #60
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I think your bigger problem is that you are paying Edward Jones a lot of money to put you in funds like Vanguard Target Retirement 2045 that you can easily get yourself for free just by going to the Vanguard Web site or as ETFs.

That is really what will bleed your future returns more than fussing about which specific funds(s) you are in.

1% annual fee x 30 years = 30% of your total portfolio getting transferred to your "advisor" by the time you are age 73. Is the advice you are getting worth 1/3 of your total retirement nest egg?
^ ^ ^

Yes, that is it in a nutshell.

OP, just run with the two funds at 85%/15% suggested earlier in this thread, and be done with it. You will be far ahead of where you were with Edward Jones. Good luck. Let us know when you've got it done.
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