First...I am a very, very unsophisticated investor. I've done some reading, but not a whole lot of understanding. While I figure things out, I've got my assets parked here:
traditional IRA - $30,700 VTSAX
Roth IRA - $11,200 VTSAX
taxable account - $4,100 VTSAX + ~ $100 money market
cash emergency fund - $15,000
I am 43 and will probably need to work until traditional retirement age (although I would definitely welcome any circumstances that would reduce that), so I have 20+ years to accumulate. This makes me feel like bonds are too conservative and don't make sense.
I have read a lot of people's posts here, though, suggesting that it is wise to diversify into international funds. My questions are:
1. Is the purpose of adding an international fund to increase the aggressiveness of one's portfolio, or reduce it? I think I understand that an international index fund is more volatile than a US-only fund, but sometimes it seems like people are doing it for the opposite reason, to avoid the eggs-in-one-basket thing.
2. Vanguard only seems to have one low-cost international index fund (VTIAX), and it requires a $10,000 investment. I could do that if I exchanged some of the VTSAX in my traditional IRA. $10,000 is about 16% of my assets, cash included. Is 16% in international stocks a conservative, moderate, or aggressive level of exposure?
3. Am I correct that VTIAX is the only low-cost Vanguard international index fund? One with a lower initial investment of $3,000 or so would be nice. I could gradually add to the money market in my taxable account until I could make that investment, and then add to it in smaller amounts, to avoid freaking myself out.
The emergency fund is, unfortunately, untouchable. I've halved it in the last year, but that has happened gradually and taken a great deal of confidence-building and deep breaths. It's down as low as I can tolerate, given my very low and somewhat unstable income.