Suggest me a Vanguard index fund? Should I even put money in..?

[yellowbastard]

Does anyone know where I can find information on the details of the MSCI indexes Vanguard uses for their index funds such as 10 year avg. ROE, 10 year earnings growth, ect...

Vanguard has some index information on their site (P/E, ROE, ect...) but it is all from the current year and they have no such innformation for their foreign funds. After googling for a while this is all I could come up with.

[DespotInExile]

[ QUOTE ]
FWIW, I don't like the TR funds because they use the Total Bond Market Fund. I don't think indexing the entire bond market makes sense and I prefer not to take duration and credit risk because they're correlated with equities. I like Short Term Treasuries and/or Treasury Inflation Protected Securities (TIPS) for bond allocations.

[/ QUOTE ]

I think you're missing a few points. Medium duration corporate bonds have traditionally (though not so much nowadays) been a sweet spot. Also, despite correlations, the carry you get on bonds makes up a substanital part of your returns.

[SubaruSTiMike]

Wow, thanks all for the great help, you guys are really awesome. I will put the money I save into the STAR fund since I don't have much capital to start with, and once I save enough, 3k, then I'll put it into the target retirement fund. The work money will go towards the IRA. Thanks such much again. You guys helped a lot.

[Jeff W]

Looking at bonds in isolation is a mistake. Better to consider whether a Stock+Bond portfolio with a given target return will have a lower risk with Equities+Short Term Treasuries or with Equities+Intermediate Term Corporate Bonds.

There is still debate on the issue. I doubt it's a very important part of portfolio construction.

[DespotInExile]

[ QUOTE ]
Looking at bonds in isolation is a mistake. Better to consider whether a Stock+Bond portfolio with a given target return will have a lower risk with Equities+Short Term Treasuries or with Equities+Intermediate Term Corporate Bonds.

There is still debate on the issue. I doubt it's a very important part of portfolio construction.

[/ QUOTE ]

It goes without saying that my comments about bond exposure were based on the idea that you can take down risk for free. This the whole notion that you get some diversification benefit from holding equities + bonds.

But my other point stands, namely that corporate bonds are an important part of the bond allocation b/c of their yield. This is where treasuries, esp. short duration treasuries, have traditionally been weak. Other than in the current credit cycle, in which the spread over treasuries has gotten irrationally compressed, non-investment grade and low investment grade credits have provided a substantial part of the total return of a bond portfolio.

One could make a good argument, however, that risk premiums are too compressed nowadays, and that bonds are a bad investment. Of course, you could have said this 2 years ago, and you would have missed out on a tremendous bond market rally also.

I agree generally with your comment that you take on more durational risk the longer your maturities get, and that you're generally not adequately compensated for this. Long bonds in my mind are good only if you're trying to offset a long-term liability, and you have a hold to maturity view.

[DcifrThs]

[ QUOTE ]
[ QUOTE ]
Looking at bonds in isolation is a mistake. Better to consider whether a Stock+Bond portfolio with a given target return will have a lower risk with Equities+Short Term Treasuries or with Equities+Intermediate Term Corporate Bonds.

There is still debate on the issue. I doubt it's a very important part of portfolio construction.

[/ QUOTE ]

It goes without saying that my comments about bond exposure were based on the idea that you can take down risk for free. This the whole notion that you get some diversification benefit from holding equities + bonds.

But my other point stands, namely that corporate bonds are an important part of the bond allocation b/c of their yield. This is where treasuries, esp. short duration treasuries, have traditionally been weak. Other than in the current credit cycle, in which the spread over treasuries has gotten irrationally compressed, non-investment grade and low investment grade credits have provided a substantial part of the total return of a bond portfolio.

One could make a good argument, however, that risk premiums are too compressed nowadays, and that bonds are a bad investment. Of course, you could have said this 2 years ago, and you would have missed out on a tremendous bond market rally also.

I agree generally with your comment that you take on more durational risk the longer your maturities get, and that you're generally not adequately compensated for this. Long bonds in my mind are good only if you're trying to offset a long-term liability, and you have a hold to maturity view.

[/ QUOTE ]

what is, in one sentance your basic point? from what i read above i think it is "corporate bonds are important to hold in a diversified portfolio due to their increased yield."

if i've gotten that wrong please correct me but i want to understand your point before i respond.

thanks,
Barron

[TheMetetron]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Looking at bonds in isolation is a mistake. Better to consider whether a Stock+Bond portfolio with a given target return will have a lower risk with Equities+Short Term Treasuries or with Equities+Intermediate Term Corporate Bonds.

There is still debate on the issue. I doubt it's a very important part of portfolio construction.

[/ QUOTE ]

It goes without saying that my comments about bond exposure were based on the idea that you can take down risk for free. This the whole notion that you get some diversification benefit from holding equities + bonds.

But my other point stands, namely that corporate bonds are an important part of the bond allocation b/c of their yield. This is where treasuries, esp. short duration treasuries, have traditionally been weak. Other than in the current credit cycle, in which the spread over treasuries has gotten irrationally compressed, non-investment grade and low investment grade credits have provided a substantial part of the total return of a bond portfolio.

One could make a good argument, however, that risk premiums are too compressed nowadays, and that bonds are a bad investment. Of course, you could have said this 2 years ago, and you would have missed out on a tremendous bond market rally also.

I agree generally with your comment that you take on more durational risk the longer your maturities get, and that you're generally not adequately compensated for this. Long bonds in my mind are good only if you're trying to offset a long-term liability, and you have a hold to maturity view.

[/ QUOTE ]

what is, in one sentance your basic point? from what i read above i think it is "corporate bonds are important to hold in a diversified portfolio due to their increased yield."

if i've gotten that wrong please correct me but i want to understand your point before i respond.

thanks,
Barron

[/ QUOTE ]

I believe that's the point, but it makes no sense.

[DcifrThs]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Looking at bonds in isolation is a mistake. Better to consider whether a Stock+Bond portfolio with a given target return will have a lower risk with Equities+Short Term Treasuries or with Equities+Intermediate Term Corporate Bonds.

There is still debate on the issue. I doubt it's a very important part of portfolio construction.

[/ QUOTE ]

It goes without saying that my comments about bond exposure were based on the idea that you can take down risk for free. This the whole notion that you get some diversification benefit from holding equities + bonds.

But my other point stands, namely that corporate bonds are an important part of the bond allocation b/c of their yield. This is where treasuries, esp. short duration treasuries, have traditionally been weak. Other than in the current credit cycle, in which the spread over treasuries has gotten irrationally compressed, non-investment grade and low investment grade credits have provided a substantial part of the total return of a bond portfolio.

One could make a good argument, however, that risk premiums are too compressed nowadays, and that bonds are a bad investment. Of course, you could have said this 2 years ago, and you would have missed out on a tremendous bond market rally also.

I agree generally with your comment that you take on more durational risk the longer your maturities get, and that you're generally not adequately compensated for this. Long bonds in my mind are good only if you're trying to offset a long-term liability, and you have a hold to maturity view.

[/ QUOTE ]

what is, in one sentance your basic point? from what i read above i think it is "corporate bonds are important to hold in a diversified portfolio due to their increased yield."

if i've gotten that wrong please correct me but i want to understand your point before i respond.

thanks,
Barron

[/ QUOTE ]

I believe that's the point, but it makes no sense.

[/ QUOTE ]

ijust want him to clarify his position in his own words before i type out my response.

Barron

[SubaruSTiMike]

Follow up question...

Would it be a bad idea to put like half into a retirement fund and half into the total market index. Or put half into retirement fund and 1/4 into total market index and 1/4 into the the total international stock market?

I want to put money into these three but not sure if it's a good idea to diversify within index funds..

Does anyone have a good book that I can read up on ETF's/Index Funds?

[turnipmonster]

a random walk down wall street, by burton malkiel