https://www.blackrock.com/investing/...ioinst-cl-fund

It seems that fund has some international exposure. I didn't look too deeply into it.

As far as these target funds, I don't agree with the bond weightings, especially when people are still 15 years or so before retirement. It is, however, an easy option.

I want to lower my % bond allocation. I already have 10% of invested funds in bonds because my wife and I have everything in vanguard 2055 fund VFFVX now and we are only in our late 20s. I'd rather it be closer to 5 or even 0 until we hit 40 at least. I thought this would be one easy way to reduce our overall bond allocation. I suppose I could do like 70% of the S&P fund and 30% of the WF2055 fund

^^ agree on the bond exposure.

The bond exposure primarily helps with behavioral issues. He already looked at what the international fund did over the previous ten years, which indicates that he is subject to them.

What do you mean by behavioral if it's periodic and on a steady schedule?

I haven't ever seen a 401k plan that doesn't allow you to make bad decisions

lol.

josh, the reality is that the difference between a 5% bond allocation and a 10% is almost inconsequential. The value of a broadly diversified portfolio rather than a dramatic overweight to the S&P 500 is well worth it, imo. And as Brian points out, doing your own allocation leads to far greater chance of user error. Put all future investments in the 2055 fund, get very good results, and sleep well at night knowing you did by far the most sensible thing.

Fair enough. I guess the WF target 2055 only has 1% bonds anyway. I kind of want to put a bit more than a 60/40 spread into US Stocks though. Right now I'm leaning towards this distribution:

3% - Russell 2000
17% - S&P 500 Index
^^ apparently 85/15 split between these best mirrors the US total stock market according to https://www.bogleheads.org/wiki/Appr...l_stock_market
80% - Target 2055 (~60/39/1 US/Int/Bond split)

My biggest concern is the significantly larger fees associated with the Target 2055 fund.



is that something that would make a big difference in the long run?

I would 50% the international fund, and then put together the S&P 500, Russell, and Small Cap indices at something approximating their real %s. Something like 30/10/10. This is what I actually do with my work 401(k), except I slightly overweight small/mid.

I'm not familiar enough with how lifecycle funds operate; like is the expense ratio they list in addition to what gets pulled out of the funds in the fund? A Random Walk Down Wall Street doesn't like them.

As other posters have implied, you can't do it and then start fussing around checking short-medium term returns. You need to set these allocations and not look at them again for 10 years. If you're going to look and start messing around with anything other than the Lifecycle fund, then just buy that (the longest-term one).

I don't say this very often in my life, but I really did stop right there. 50% international as a United States citizen is lol.

Why? Couldn't an argument be made that if you plan on living in the US the rest of your life, you're exposed to the US economy that way too and should account for that by over-weighing non-US assets in your portfolio?

(Kind of like the argument that goes 'if you have secure future income, invest less in bonds than you would otherwise')

I'm going to go with ~33% International. I see Vanguard uses 40% in my TR 2500 fund, I remember it used to be 30%. 33% seems like a good number for me to set and forget about. A majority of people seem to give values between 20% and 50%, and historical performance seems to indicate that minimizes your variance the most (https://personal.vanguard.com/pdf/ISGGEB.pdf page 5). If I max my 401k with 30% international and stick with TR2055 for my IRA I should converge in between than 30% and 40% range.

Now that you've made up your mind, don't fiddle with it no matter what (other than rebalancing to your exact starting percentages). Even if you think you've learned something new.

Let us know how it all turned out in 40 years. That should be the next time you think about this or do anything.

The 2055 fund would be better than S&P 500, because it gets the entire US market.

Yes, I would personally put some percentage into VTIAX. Personally, I have a HIGHER allocation to international stocks exactly because they haven't done anything over the last 10 years.

I'm currently 60% International, with half of that in emerging markets. Feel free to laugh away. :P

International stocks seem to be a significantly better value than US stocks at this moment. I'll rebalance back the other direction at some point in the future.

Would love for you to explain your 'lol'.

Ldo, home country bias is a good thing, because of reasons!

I apologize if I came off as condescending, as when I reread it, it sounded like I was.

I wouldn't put that much into that category because I just don't know how they will perform. A little speculation seems fine, but I'm in the 10-20% camp, max. I'm a US citizen and have faith in our government and our financial markets. I see no reason to expose myself in a significant way to more risk than necessary. It opens the door to political risk, currency risk, regulatory risk, etc etc. It's hard enough to know many things about our own market, putting that much into markets that I just don't know or will research seems unnecessary.

We know the US market tends to go up over time and has generally always done so across significant time intervals. There's no reason to mess with a winning formula, but especially so at >50%, which to me sounds outrageous. It's your money, obviously do what you wish, but I would never do that unless I had a specific reason/strategy to.

And I don't agree the US market is currently overvalued.

That actually makes sense to me. I wonder if that's why vanguard recently increased international % to 40% from 30% in their TR funds

You don't know how any category will perform. All we know is how things have historically performed.

I see my current allocation as decreasing my risk to expected return. I don't personally care about short term volatility.

Same for international stocks. Or really pretty much ANY common asset class. Expected return and volatility are what vary widely.

I didn't make a statement about overvalue. I made a statement about relative values in the short to intermediate term.

To give some illustration on some common asset classes...

VTI = Vanguard US Stock Market ETF
VFIAX = Vanguard S&P 500 Mutual (ETF doesn't go back 10 years)
VBR = Vanguard US Small Cap Value ETF

VEA = Vanguard Developed International ETF
VWO = Vanguard Emerging Markets ETF

Last 5 years:



Last 10 years:

They are trying to better match a well-diversified portfolio.

Of course, now that you have made your choices, it doesn't matter

i have been presented with the 'opportunity' to buy a share of stock of the private company i work for. 1 share and there are 110 total. the single share will cost me somewhere around ~46k, and last i heard it returns around 1.5% a year. the company has a stated growth target of not much more than we are currently at, possibly 2-3% more.
i have not yet had the opportunity to get all of the specifics in regards to company financials, rate of return, etc. but i totally expect that i will. apparently they had the valuation checked by two different companies recently and they both resulted in a similar $/share. seems like this particular sector of the market is at a peak and more likely will decrease in value in the coming years.
what are other options i could reasonably invest my $46k into and get a better ROI? i'm looking for leverage since the share i would buy is directly from the person that founded the company and he's looking to transition out.

Is 1.5% a typo? I'd never do that. A world index fund would have a significantly higher expected ROI.

You aren't giving a coherent argument about why your strategy is optimal at this point. If you just want to throw your money into anything and pray, that's fine, but I see no concrete reason to follow your logic here. If you think a particular region/fund is undervalued and it'll outperform the US market in the future because of X and X, then make that argument. Just the currency risk is enough for me to take caution. I mean, the US market has been on a historic tear for the last 7 years, with no signs of slowing. I just don't see what has you so convinced that you'd suggest putting 50% of your future in it.

Wil, if markets are efficient, investing in EM should have the same EV (accounting for extra volatility) as investing in American stocks right? All those drawbacks you described should push the EM stock price down to the point where it's priced in. So in that case it doesn't matter what you do - 60% in EM instead of 20% might increase your variance but has no impact on your EV. You have not given an argument why there would be a market inefficiency and in what directon.

Bit disappointed that noone adressed my point 'if you're gonna be living & working in the US, you're exposed to the US economy that way (future income) too, so it would make sense to account for that in your portfolio'. Is it that obviously wrong?