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-Would it be a good idea to diversify outside of just a single fund? How important is this?
-Are there any investments that have a higher average return that I might be missing? I am completely risk neutral and don't mind large fluctuations as long as I am receiving a higher expected rate of return as a result.
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Congratulations on your success, and having over $100K at Vanguard.
Vanguard has index funds around the world, and by diversifying, you should get a higher expected return with a similar amount of risk. I'd suggest something like this:
20% US Total Stock Market Index
20% US Large Cap Value Index*
10% US Small Cap Index*
10% US Small Cap Value Index*
10% REIT Index
10% European Index
10% Asia/Pacific Index
10% Emerging Markets Index*
The funds with a * should have an expected return higher than the S&P 500 Index fund. The others should have expected returns about the same as the S&P 500.
I'm not sure if you lose Admiral status with all these funds, but even if you do your expected return is higher than the few basis points of expense ratio you'd give up.
If you moved to this allocation, you may have a capital gain when you sell the S&P 500. You could keep the first 20% in the S&P 500 fund instead of that Total Stock market fund; they overlap quite a bit. The Total Stock market fund is more tax efficient over the long haul.
I know you said you don't have a lot of time, but if you could real one book I'd suggest
The Four Pillars of Investing by William Bernstein. I think this allocation or something a lot like it is from there.
If not, you could reallocate to this mix, and not look at it at all. If you add new money, add to the funds that have a lower percentage than the target. Longer term, you might reallocate once a year or so, doing small exchanges from the funds that are overweight to the ones that are underweight. Make sure you hold all funds for over a year before exchanging out so gains are all long-term. This rebalance might take you an hour per year. That's really all the time you'd need to allocate to it.
Good luck!
-Tom