Comments on Vanguard Portfolio Plan

[mtgordon]

The ultimate buy and hold guide from fundadvice.com has 12% international small cap (between normal and value) as well as 12% domestic small cap (I'm including micro here as well). Also that includes 40% Bonds but it seems like you are going 100% equity (which I agree with) so this would inflate to 40% in small cap of one kind or another on top of their total market.

To summarize, I don't know much but it seems like your first post didn't have a ridiculous amount of small cap.

[TheMetetron]

[ QUOTE ]
Ok so lets say I switched to the following plan:


Small Cap: 20%
International Value: 20%
Total Stock Market: 20%
Mid Cap Blend: 15%
European Index: 15%
Emerging Markets: 10%

Hows that look compared to the original?


btw I notice I gave wrong figures last night, I actually had emerging markets at 9% and a few others 1% lower. Was typing it by memory [img]/images/graemlins/smile.gif[/img]

[/ QUOTE ]

Where are you coming up with these allocations?

They seem so random its just freaking me out.

[BeL0wMe]

[ QUOTE ]
1) too much small cap
2) too much mid-cap [i assume this is US_only]
3) Where's your bonds/cash/dry-powder?

The market will take a 10% tumble at some point in the near future, you should always have some dry powder in reserve.

[/ QUOTE ]

Naj, the market is always going to have corrections, or recessions as we have seen throughout time. The main thinking behind Bogle was to buy and hold, which I would assume is what the OP is trying to do. In that case it's more than fine to be 100% equities. Since the beginning of it, the SPX has averaged 10.8%, while bonds are around 5.1%, when you are this young, and can ride out the market, it would certainly be in your best interest to be 100% equities.

FWIW the market already had a 5% correction this year, and my portfolio is still up 7.5%, but I guess I'm just a buy and holder until I die.

[curtains]

[ QUOTE ]
[ QUOTE ]
Ok so lets say I switched to the following plan:


Small Cap: 20%
International Value: 20%
Total Stock Market: 20%
Mid Cap Blend: 15%
European Index: 15%
Emerging Markets: 10%

Hows that look compared to the original?


btw I notice I gave wrong figures last night, I actually had emerging markets at 9% and a few others 1% lower. Was typing it by memory [img]/images/graemlins/smile.gif[/img]

[/ QUOTE ]

Where are you coming up with these allocations?

They seem so random its just freaking me out.

[/ QUOTE ]


Honestly probably doesnt matter exactly what they are as long as they are reasonable and somewhat diversified? At least thats how it seems and I think this fits the bill? Anyway just randomly wrote this out to make it more in line with what some other people were saying earlier in this thread. Maybe will just stick with the original plan though [img]/images/graemlins/smile.gif[/img]

[TheMetetron]

Dude, get some large cap, get some small cap. Get some value, get some growth. Get some international, international value, and emerging markets. Maybe a REIT if you don't own real estate. Make everything fairly proportional. At least it will make sense.

[Perplexity]

What you posted looks fine, better than before. It mixes index and non-index funds, which you may or may not consider a downside. It also completely excludes non-European/non-Emerging/non-Value international stocks. I don't think this is a good thing.

I'm going to post my version.

[curtains]

[ QUOTE ]
Dude, get some large cap, get some small cap. Get some value, get some growth. Get some international, international value, and emerging markets. Maybe a REIT if you don't own real estate. Make everything fairly proportional. At least it will make sense.

[/ QUOTE ]

Not sure what you mean? I have some small cap, some mid cap, total stock market which Im told is more large cap based. I have a mix of International investments, and I am willing to take a very high degree of short term risk.

Why doesn't it make any sense?

[chaz64]

[ QUOTE ]
Ok so lets say I switched to the following plan:


Small Cap: 20%
International Value: 20%
Total Stock Market: 20%
Mid Cap Blend: 15%
European Index: 15%
Emerging Markets: 10%

Hows that look compared to the original?


btw I notice I gave wrong figures last night, I actually had emerging markets at 9% and a few others 1% lower. Was typing it by memory [img]/images/graemlins/smile.gif[/img]

[/ QUOTE ]

Total Stock has mid-caps in it already I believe. Why not just put that 15% in Inflation Protected Securities (bonds) instead? Stocks have done better than bonds long term, but if you rebalance every year or so you likely get about as good a return as all stocks, but with less volatility.

If you want to do some reading, try The Four Pillars.

[curtains]

[ QUOTE ]
[ QUOTE ]
Ok so lets say I switched to the following plan:


Small Cap: 20%
International Value: 20%
Total Stock Market: 20%
Mid Cap Blend: 15%
European Index: 15%
Emerging Markets: 10%

Hows that look compared to the original?


btw I notice I gave wrong figures last night, I actually had emerging markets at 9% and a few others 1% lower. Was typing it by memory [img]/images/graemlins/smile.gif[/img]

[/ QUOTE ]

Total Stock has mid-caps in it already I believe. Why not just put that 15% in Inflation Protected Securities (bonds) instead? Stocks have done better than bonds long term, but if you rebalance every year or so you likely get about as good a return as all stocks, but with less volatility.

If you want to do some reading, try The Four Pillars.

[/ QUOTE ]


Volitility is really not so important to me. I am very strong in belief that I won't touch this money for a LONG time. Also I only keep about 50-70% of my money in there, the rest I put in INGDirect Isn't that remotely similar to investing in bonds, but with sacrificing a little bit of % for increased liquidity.

I have a discipline problem where if I put money in Vanguard I know I won't let myself take it out no matter what. So even if it theoretically is liquid, it won't be psychologically.

[TheMetetron]

Wait... is this going in a taxable account?