Hello everyone. I have done a lot of research and read some of Bogle's books as well as other recommended books from this forum. Your advice has been highly valued and I thank you for pointing me in the right direction.
Bogle mentioned that bonds should equal a person's age. I am 32 and whatever plan I put in place I will stick to the defined plan no matter the market performance. I plan to rebalance once a year if I use a custom plan.
I am currently debating on staying in the Vanguard Target Retirement 2035 or creating my own mix below. Would this look like a good portfolio? I am thinking 25% in each category right now for simplicity sake but I am open to suggestions.
1) Small Cap 25%
Vanguard Small-Cap Index Fund Investor Shares (NAESX) or
Vanguard Small-Cap Growth Index Fund (VISGX)
Another option for Small Cap:
I also have a 401(k) account that is matched up to 6%. It has a good amount in it so I *could* use that to purchase a Small Cap option. From my research it was suggested that it is sometimes better to have an actively managed Small Cap rather than indexed Small Cap. I am convinced however that Indexing is the way to go for most everything. I have enough in this 401(k) account to meet this 25% mark if this sounds like a good idea.
2) Short Term Bonds 25%
Vanguard Short-Term Bond Index Fund Investor Shares (VBISX)
3) International 25%
Vanguard Total International Stock Index Fund (VGTSX)
4) Large Cap 25%
Vanguard Large-Cap Index Fund Investor Shares (VLACX)
Vanguard Target 2035 consists of the following:
71.6% Vanguard Total Stock Market Index Fund Investor Shares
10.6% Vanguard Total Bond Market II Index Fund Investor Shares
8.9% Vanguard European Stock Index Fund Investor Shares
4.5% Vanguard Pacific Stock Index Fund Investor Shares
4.4% Vanguard Emerging Markets Stock Index Fund Investor Shares
It seems that I would have a little more flexibility as far as balancing with my 401(k) account if I steered away from the Target fund. I do like however the automation of the Target fund. I want to take the route that makes more sense and keeps me diversified the way I should be.
I wouldn't consider myself aggressive but I have several years ahead so I am willing to take some risk. I would say I am in between aggressive and conservative if that helps. I just want to do what makes sense for the average 32 year old.
The Vanguard Fund picks above for my custom plan were my best guess as to what would get me the most diversified. I am open to suggestions.
Thanks so much for your advice -- also the advice on using 401(k) for Small Cap and Bogle's suggestion on bond percentage equalling your age is curiously appreciated.
Bogle mentioned that bonds should equal a person's age. I am 32 and whatever plan I put in place I will stick to the defined plan no matter the market performance. I plan to rebalance once a year if I use a custom plan.
I am currently debating on staying in the Vanguard Target Retirement 2035 or creating my own mix below. Would this look like a good portfolio? I am thinking 25% in each category right now for simplicity sake but I am open to suggestions.
1) Small Cap 25%
Vanguard Small-Cap Index Fund Investor Shares (NAESX) or
Vanguard Small-Cap Growth Index Fund (VISGX)
Another option for Small Cap:
I also have a 401(k) account that is matched up to 6%. It has a good amount in it so I *could* use that to purchase a Small Cap option. From my research it was suggested that it is sometimes better to have an actively managed Small Cap rather than indexed Small Cap. I am convinced however that Indexing is the way to go for most everything. I have enough in this 401(k) account to meet this 25% mark if this sounds like a good idea.
2) Short Term Bonds 25%
Vanguard Short-Term Bond Index Fund Investor Shares (VBISX)
3) International 25%
Vanguard Total International Stock Index Fund (VGTSX)
4) Large Cap 25%
Vanguard Large-Cap Index Fund Investor Shares (VLACX)
Vanguard Target 2035 consists of the following:
71.6% Vanguard Total Stock Market Index Fund Investor Shares
10.6% Vanguard Total Bond Market II Index Fund Investor Shares
8.9% Vanguard European Stock Index Fund Investor Shares
4.5% Vanguard Pacific Stock Index Fund Investor Shares
4.4% Vanguard Emerging Markets Stock Index Fund Investor Shares
It seems that I would have a little more flexibility as far as balancing with my 401(k) account if I steered away from the Target fund. I do like however the automation of the Target fund. I want to take the route that makes more sense and keeps me diversified the way I should be.
I wouldn't consider myself aggressive but I have several years ahead so I am willing to take some risk. I would say I am in between aggressive and conservative if that helps. I just want to do what makes sense for the average 32 year old.
The Vanguard Fund picks above for my custom plan were my best guess as to what would get me the most diversified. I am open to suggestions.
Thanks so much for your advice -- also the advice on using 401(k) for Small Cap and Bogle's suggestion on bond percentage equalling your age is curiously appreciated.
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