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What’s a good fund to place in a Roth IRA that will help diversify?
Posted on 4/13/22 at 5:59 pm
Posted on 4/13/22 at 5:59 pm
Right now (and for the past 5-6 years) my entire Roth IRA consists of vanguard’s US Growth fund and the S&P 500 fund - VWUSX and VFIAX. It’s 100% stocks and I’m almost 37 years old, planning to work until 62 or so.
I’d like to start diversifying a bit in order to dampen the big losses and eventually get more heavily weighted in bonds and such closer to retirement. What are some good funds to purchase for this? Should I go with one of vanguard’s generic retirement funds or something else?
I’d like to start diversifying a bit in order to dampen the big losses and eventually get more heavily weighted in bonds and such closer to retirement. What are some good funds to purchase for this? Should I go with one of vanguard’s generic retirement funds or something else?
6
Posted on 4/13/22 at 6:35 pm to TDsngumbo
Have you considered a bit of international exposure… maybe 10% or so? You’re still a bit young for much bond or fixed income exposure, but a tad wouldn’t be a sin, if it’ll make you feel more comfortable. I’ve been building dividend payers as I began looking at retirement (I’m a good bit older than you). And they’ve performed well during this recent downdraft. There are sector ETFs and mutual funds that can get that for you, if you prefer to avoid individual equities.
Posted on 4/13/22 at 6:49 pm to TDsngumbo
Bruh index funds are so March 2020. Live by the sword and die by the sword of individual stocks. I can't go back to 8% a year mutual funds, too boring. Give me +80% or -80% with one stock. "Fortune favors the bold."
Posted on 4/13/22 at 6:50 pm to TDsngumbo
At your age, you should not worry about your stated bond diversification plan for many more years. However, if you really want to do this, put 25% of your funds into a Total Bond Fund or ETF. Don’t go all in now, because the current rising rates are hurting Bond Funds. Dollar Cost Average into it over a 12 to 24 month period.
Consider the Vanguard Total Bond Fund, Fidelity Total Bond Fund, iShares Core Total Bond ETF, or Fidelity Total Bond ETF.
Consider the Vanguard Total Bond Fund, Fidelity Total Bond Fund, iShares Core Total Bond ETF, or Fidelity Total Bond ETF.
Posted on 4/13/22 at 6:58 pm to Jag_Warrior
quote:
I’ve been building dividend payers as I began looking at retirement
Are there any dividend-focused funds you would recommend? That’s another thing I’ve been considering.
Posted on 4/13/22 at 6:59 pm to TDsngumbo
Index funds is already "diversifying". Buy crypto if you want to diversy more
Posted on 4/13/22 at 7:06 pm to 21JumpStreet
quote:
Index funds is already "diversifying"
I was gonna respond and explain why they aren’t but then I saw this
quote:
Buy crypto if you want to diversy more
and realized you wouldn’t listen anyway.
Posted on 4/13/22 at 7:16 pm to TDsngumbo
SPHD happens to be one that I’m in. But there are several similar ones. They won’t rocket, but they also won’t crash.
Posted on 4/14/22 at 4:40 am to GeneralLee
Terrible advice, but I’m the same.
I sold all my VT and VTI a few months ago and put it all in Tellurian.
Turned out to be a great decision as of now.
I sold all my VT and VTI a few months ago and put it all in Tellurian.
Turned out to be a great decision as of now.
Posted on 4/14/22 at 7:22 am to TDsngumbo
Popular dividend focused ETFs are SCHD, VYM, and VIG. I’m not sure about index funds specifically.
Posted on 4/14/22 at 9:59 am to TDsngumbo
Dodge and Cox Stock Fund. if you just want a steady solid fund it is terrific for that.
Posted on 4/14/22 at 10:22 am to TDsngumbo
Read the "3 Fund Portfolio" by Taylor Larimore, pick your allocation and pick up your millions in 25 years.
The book recommendation is 60/30/10 to Total Stock Market/total international/total bond, but Bogle himself discounted international because the total stock market has enough international exposure and leaned to 80/20 TSM/Total bonds during working life. When Bogle died, his allocation was 34/66 just recently, pushing 90.
I'd think 80/20/0, 80/10/10 or 90/5/5 for now based on your age and gradually shift away from TSM to bonds. I'm 42 and am between 95/5 and 100/0 for most of my adult life. Bonds (and international) have been real losers the last 20 years and you're young enough to avoid bonds altogether unless something fundamental changes. I think we'll be in a low yield bond environment indefinitely and your bond allocation doesn't really matter. Bonds made a big difference at higher yields over last 40 years but I don't think they will in the future. The book is good framework but you've got to use real results to evaluate that framework.
Also, I think people become too risk averse at retirement. If you retire at 62 and are in good health, you've got another ~25 years of life and one can run out of money or get crushed by inflation if you don't have a big enough equity allocation over 25 years of retirement. If you'd gone 60% bonds over last 5 years and away from TSM you'd be broke in no time, definitely much poorer.
The book recommendation is 60/30/10 to Total Stock Market/total international/total bond, but Bogle himself discounted international because the total stock market has enough international exposure and leaned to 80/20 TSM/Total bonds during working life. When Bogle died, his allocation was 34/66 just recently, pushing 90.
I'd think 80/20/0, 80/10/10 or 90/5/5 for now based on your age and gradually shift away from TSM to bonds. I'm 42 and am between 95/5 and 100/0 for most of my adult life. Bonds (and international) have been real losers the last 20 years and you're young enough to avoid bonds altogether unless something fundamental changes. I think we'll be in a low yield bond environment indefinitely and your bond allocation doesn't really matter. Bonds made a big difference at higher yields over last 40 years but I don't think they will in the future. The book is good framework but you've got to use real results to evaluate that framework.
Also, I think people become too risk averse at retirement. If you retire at 62 and are in good health, you've got another ~25 years of life and one can run out of money or get crushed by inflation if you don't have a big enough equity allocation over 25 years of retirement. If you'd gone 60% bonds over last 5 years and away from TSM you'd be broke in no time, definitely much poorer.
This post was edited on 4/14/22 at 10:29 am
Posted on 4/14/22 at 10:22 am to TDsngumbo
quote:
Are there any dividend-focused funds you would recommend? That’s another thing I’ve been considering.
Vanguard high dividend yield fund - VHYAX.
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