Author Topic: rebalancing my vanguard portfolio  (Read 5802 times)

Mr Mark

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rebalancing my vanguard portfolio
« on: April 10, 2013, 12:09:23 PM »
Yes, time to rebalance!

I mainly do this buying, as I get a lump sum around this time. Thought I'd share my current allocation.

VWELX   25% A balanced fund, approx 35/65 bonds to equity, big cap
VWINX   10%  Conservative balanced income fund, 60/40 bonds to equity
VEXMX  10%  Extended market inbetween russel3000 and sp500
VEIPX    10%  Equity income, big dividend stocks
 VEIEX   10%  Emerging markets
VWIGX   5%   International growth, about half in Europe
VGSIX   10%   REIT index
VISVX   5%      Small cap value
VMGIX  10%    Midcap growth
VFIAX  5%   SP 500 INDEX

I'm aiming for a 15/85 bond equity split, and want to be slightly overweight on midcap and emerging markets, hence the complexity.

tylerherman

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Re: rebalancing my vanguard portfolio
« Reply #1 on: April 10, 2013, 01:37:39 PM »
www.bogleheads.org/forum will probably give you a lot better answer to this question as its Vanguard fanatics over there

NYD3030

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Re: rebalancing my vanguard portfolio
« Reply #2 on: April 10, 2013, 03:12:53 PM »
I can tell you right now what they'll say over there:

"This is way too complicated.  Cut it down to the total US, total INTL, total Bond funds.  Season with Small Cap Value, REIT if you feel like it.  You're increasing volatility and complexity w/o increasing expected returns by much..."



« Last Edit: April 10, 2013, 03:14:49 PM by NYD3030 »

James

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Re: rebalancing my vanguard portfolio
« Reply #3 on: April 10, 2013, 03:23:40 PM »
Yes, time to rebalance!

I mainly do this buying, as I get a lump sum around this time. Thought I'd share my current allocation.

VWELX   25% A balanced fund, approx 35/65 bonds to equity, big cap
VWINX   10%  Conservative balanced income fund, 60/40 bonds to equity
VEXMX  10%  Extended market inbetween russel3000 and sp500
VEIPX    10%  Equity income, big dividend stocks
 VEIEX   10%  Emerging markets
VWIGX   5%   International growth, about half in Europe
VGSIX   10%   REIT index
VISVX   5%      Small cap value
VMGIX  10%    Midcap growth
VFIAX  5%   SP 500 INDEX

I'm aiming for a 15/85 bond equity split, and want to be slightly overweight on midcap and emerging markets, hence the complexity.

Seems complex to me also.  I would narrow it down to a single index in each category, pick a percent for each index fund, and then just do the math each year to apply your lump sum in a way that balances them back to your target percentages.

Regarding what allocation is right for you, it would totally depend on your goals, risk tolerance, and assumptions regarding the markets.

grantmeaname

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Re: rebalancing my vanguard portfolio
« Reply #4 on: April 10, 2013, 03:29:59 PM »
I think you could simplify things greatly and end up in about the same place.

Why hold 10% VWINX instead of 4% VTSAX and 6% VBTLX? Likewise, with the VWELX - why not 15% VTSAX and 10% VBTLX?
Instead of 5% VFIAX and 10% VEXMX, couldn't you hold like 7% VTSMX and 8% VSMAX?
Do you have a reason to think that mid-cap growth stocks will outperform going forward? What about small-cap value? Why hold them?

And likewise with the rest of the portfolio. You could probably graduate all your shares to admiral-class by doing so. Why not figure out your percent international and your percent stocks, and then divide between total stock, total bond, total international stock, total international bond, and maybe a small cap fund (leaving your REIT holding alone if you feel it's necessary, because you're not going to get those characteristics elsewhere).

Mr Mark

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Re: rebalancing my vanguard portfolio
« Reply #5 on: April 10, 2013, 06:56:56 PM »
I think you could simplify things greatly and end up in about the same place.

Why hold 10% VWINX instead of 4% VTSAX and 6% VBTLX? Likewise, with the VWELX - why not 15% VTSAX and 10% VBTLX?
Instead of 5% VFIAX and 10% VEXMX, couldn't you hold like 7% VTSMX and 8% VSMAX?
Do you have a reason to think that mid-cap growth stocks will outperform going forward? What about small-cap value? Why hold them?

And likewise with the rest of the portfolio. You could probably graduate all your shares to admiral-class by doing so. Why not figure out your percent international and your percent stocks, and then divide between total stock, total bond, total international stock, total international bond, and maybe a small cap fund (leaving your REIT holding alone if you feel it's necessary, because you're not going to get those characteristics elsewhere).


I'm not sure that sounds like much of a simplification! It's 10 funds, round numbers, not hard. I can handle it, and I think it edges the 4 box model on long term returns with less volatility. 

Why these 10 and not someone else's 5 or 6? That's just me. It gives me small tilts away from market. Lately I'm beating a pure sp500 I'm pretty sure.

I like the auto-balancing and long term gains from the mixed funds, without needing a bond index and my own rebalancing of that core allocation. REIT for a bit of diversity; and I want international without market weight on Japan  but emerging markets (albeit a contrarian play right now);

Yes, I think the big stocks are getting so big, growth is limited, while midcap have more room to grow. I prefer my large cap exposure to be more value oriented than a pure market weight (whatever market weight really means anyhow).