Hello
Based on the advice I received on this forum, I recently switched my IRA and ROTH to Vanguard funds. It was quick and easy and no regrets. I am now planning on moving some money into their stock funds. I have about $25,000 to invest. I have no plans to need the money over the next 10 years. I have been advised to put 30% in VGTSX and 70% in VTSAX.
Any thoughts or opinions??
You can use
Vanguard's asset allocator and see what they recommend for bonds. Just one more input for you to consider; it's your decision in the end. At most, Vanguard will recommend four funds: US/Intl stock funds; US/Intl bond funds. I guessed your answers based on your post and this was the recommendation:
$25,000 Vanguard LifeStrategy Growth Fund (VASGX), 0.17% ER. This fund is comprised of:
Rank | Fund name | Percentage |
1 | Vanguard Total Stock Market Index Fund Investor Shares | 55.1% |
2 | Vanguard Total International Stock Index Fund Investor Shares | 24.8% |
3 | Vanguard Total Bond Market II Index Fund Investor Shares* | 16.0% |
4 | Vanguard Total International Bond Index Fund Investor Shares | 4.1% |
So 80/20 stock/bond; 69/31 US/Intl for stock; 80/20 US/Intl for bonds. This fund is basically the four funds they usually recommend but since you need this allocation it fits one of the Lifestrategy funds they use.
You could save a little in fees by purchasing the funds individually and using VTSAX instead of VTSMX but for the others you are below $10,000 so you need the Investor Shares. Also, Vanguard Total Bond Market II Index Fund Investor Shares is institutional class; you would have to use Vanguard Total Bond Market Index Fund Investor Shares.
However, make sure you answer the questions in thier asset allocator to get your own recommendation. I put in answers that I knew would result in 100% stock allocation and got this:
60% | $15,000.00 | Vanguard Total Stock Market Index Fund Investor Shares | (VTSMX) |
40% | $10,000.00 | Vanguard Total International Stock Index Fund Investor Shares | (VGTSX) |
Edit: Yes, dividend paying funds (bond, REIT, etc) are better in tax-deferred accounts. Saw Roth, IRA in your post and latched onto that. So, maybe last config is best for your after tax account. VTSMX and VGTSX are very tax efficient because of Vanguard's patented process of pairing funds, ETFs.