The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: Eric9064 on April 06, 2016, 02:40:33 PM
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I currently have both my 401(k) and IRA with Vanguard, with both being invested in the Target Retirement 2050 Fund. I am going to open an IRA for my wife soon, and was intending to invest in the same fund. Should I be concerned that all our retirement accounts will be held in the same fund?
Thanks in advance for any advice.
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What concerns you about this?
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You own about 10000 different stocks, globally diversified, and a globally diversified set of bonds. You essentially own the world's equities and bonds. What more could you be invested in without buying a part of a private equity firm or a small business?
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In the case where Vanguard goes under, the underlying assets in the fund still exist, and belong to fund shareholders.
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In the case where Vanguard goes under, the underlying assets in the fund still exist, and belong to fund shareholders.
I think this is what OP is wondering. Good answer. Do you have any sources for this?
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In the case where Vanguard goes under, the underlying assets in the fund still exist, and belong to fund shareholders.
I think this is what OP is wondering. Good answer. Do you have any sources for this?
Well JL Collins covered it pretty well in his stock series.
http://jlcollinsnh.com/2012/09/07/stocks-part-x-what-if-vanguard-gets-nuked/ (http://jlcollinsnh.com/2012/09/07/stocks-part-x-what-if-vanguard-gets-nuked/)
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In the case where Vanguard goes under, the underlying assets in the fund still exist, and belong to fund shareholders.
I think this is what OP is wondering. Good answer. Do you have any sources for this?
This sort of explains a fund liquidation: http://www.investopedia.com/articles/mutualfund/09/mutual-fund-liquidation.asp
It doesn't really address an investment firm going under, which is a different scenario, and could possibly involve SIPC insurance in addition to liquidation.
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(Since others are addressing the issue of holding all your assets at the same brokerage, I'm going to assume that the OP actually did mean "fund:")
Should I be concerned that all our retirement accounts will be held in the same fund?
Because it is a target-date fund, no, you need not be concerned: that's exactly what target-date funds are for.
If instead your single fund were something less likely to be an appropriate asset allocation by itself, such as a sector fund (or, $DIETY forbid, an individual stock!), then you would want to be concerned.
If you had said you were 100% VTSAX (i.e., total US stock market), that's borderline: less diversified than your target-date fund, but quite possibly diversified "enough." Opinion would be divided about whether you needed to add bonds and/or international stocks or not.