Analysis paralysis...money to invest but in WHAT

[court6449]

Hi, I’m one that’s been saving for a while and have about $182K in 401K and about the same in a smattering of other investments. I can save $3600 a month for retirement but the issue is WHERE?! It’s like you can find all these opinions that you should be disciplined and invest and hold but little on where that is deemed to work? Just read Millionaire Next Door and while I admire a lot the traits, didn’t help much on where the hell to put the money to become a millionaire. I should add to this point I’ve mostly picked well diversified Vanguard index funds, very little sector funds. I’m 37 and would like to retire @ 52 (which is when I get full pension @ 40% of my highest paid year at my employer). No debt except house which will be paid off by then. I do much better with an automatic investing scenario than having to be actively in it all the time. Suggestions welcome

 

[RunningBum]

How about the Bogleheads 3 Fund Portfolio? It's pretty much what I do. Just determine your asset allocation mix (across all accounts) and invest to that. Once a year you might have to take a look at rebalancing to account for large run-ups or drops.

https://www.bogleheads.org/wiki/Three-fund_portfolio

 

[target2019]

- 401K to get the match
- max the Roth-IRA(s)
- possibly max the 401(K)
- taxable brokerage

Lots of ifs in that list. No one know what you're invested in now, and impossible to say much about next step(s).

For 15 years, I would guess most here would say put it in VTSAX, taxable account.

 

[Senator]

Put it in the S&P. If that goes south, we are all in trouble.

 

[kaneohe]

Sounds like OP is doing just fine as it is............if more simplicity is desired, the 3 fund portfolio suggested by Running Bum is an option. There is even one school that suggests a 2 fund option (leaving out international which has lagged
US for some time now)
https://www.investmentnews.com/arti...vestors-dont-need-to-own-international-stocks

 

[pb4uski]

At age 37 and a 15 year time horizon, I would go all Total Stock and declare victory.

 

[easysurfer]

How about the Bogleheads 3 Fund Portfolio? It's pretty much what I do. Just determine your asset allocation mix (across all accounts) and invest to that. Once a year you might have to take a look at rebalancing to account for large run-ups or drops.

https://www.bogleheads.org/wiki/Three-fund_portfolio

+1.

I second the idea of the 3 Fund Portfolio. The beauty is just using the three index funds frees you up from having to decide what to invest in. Instead all you do is concentrate on what percent allocation of each is right for you.

 

[The Cosmic Avenger]

In addition to endorsing the 2 or 3 fund portfolio (I'm of the opinion that they both work fine, it's a personal preference), I'd like to address the analysis paralysis. I've run into this, too, and spent way too much time checking numbers and historical performance and all when I knew what I wanted to do, but was second-guessing myself. Now I've come to develop a policy of deciding on a broad strategy, and then once I decide, I make myself implement it immediately (next business day or three, which allows for w*rk and life stuff). Otherwise I tell myself that, if this strategy is really better for me in the long run, the longer I wait, the more I miss out. So for example, if you're all in cash, don't try to wait for a day when the market goes down or you may miss out! Just do it! Now! Go!

 

[Markola]

I would put all the taxable account funds in either Total Stock Market Index or S&P 500 Index for super fee and tax efficiency and forget about it. Then I’d buy the entire world’s economy by putting all the 401k and IRA money in a Vanguard Target Date 2035 Fund aimed at your 52nd birthday and forget about it. That way, you will automatically have a good asset allocation at age 52 FIRE. Oh, and you’ll be a millionaire per this simple calculator: https://www.bankrate.com/calculators/savings/simple-savings-calculator.aspx

 

[COcheesehead]

If you have access to Fidelity, use their retirement planner tool and it will help you explore asset allocations. Where your money is invested (stocks, bonds, cash, etc) is more important than what it is invested in.

 

[Ducati52]

One of the greatest investors of our lifetime, Warren Buffet, has often said the right investment for 95% of people is an S&P 500 index fund. It's a long-term bet on the world's largest and most powerful economy. And, by investing automatically each month, you're dollar-cost averaging; buying less when prices are high, buying more when prices are low. That's almost always a recipe for success.

 

[OldShooter]

... to this point I’ve mostly picked well diversified Vanguard index funds, very little sector funds. ...

That is the winning strategy (except for the sector funds ).

"The Coffehouse Investor" by Bill Schultheis is a quick and beneficial read. Bill will make you very comfortable with your strategy and, in addition, gives you a recipe for pumpkin pie. (!) You can read a sample on his web site: https://www.coffeehouseinvestor.com/

If you want to go farther, "The Bogleheads' Guide to Investing" by Taylor Larrimore is a good second read, also quite easy.

 

[tulak]

+1 for a 3 fund portfolio.

Or if you have access to a target fund, that’s even easier. And if you prefer fixed percentages, then look at Vanguard’s LifeStrategy funds. VASGX is one of my favorites (I don’t own it, but use it as a benchmark).

https://investor.vanguard.com/mutual-funds/lifestrategy/#/

Even though it goes against many studies, I would gradually shift to this allocation instead of transitioning all at once, especially with the market run up we’ve had this year.

What I would do is figure out exactly what allocation you want. Once you do that, figure out what it takes to get there over the next 12 months and each month, move 1/12 of your current allocation to that allocation.

However, if there’s a correction, then you can accelerate your transition. Say the market drops 10%, go ahead and buy more equity funds.