The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: RookieStache on September 17, 2018, 10:41:08 AM
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Hey Guys,
I opened up a Roth IRA last year and just started it out as the VFIFX 2050 Target Retirement Fund with Vanguard. After a year, I looked into this a bit and am curious if I am making a mistake here…
VFIFX
Expense ratio of .15%
1 year: 11.17% 3 year: 11.75% 5 year: 10.28% 10 year: 8.19%
VTSAX
Expense ratio of .04%
1 year: 20.32% 3 year: 15.85% 5 year: 14.22% 10 year: 10.98%
How bad of an idea would it be to allocate all of my Roth IRA funds into VTSAX?
Thanks for the input!
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How bad would it be? It’s the best performing asset class in history...so not bad.
As for your investment goals, only you can answer that. I assume your putting this money here to sit for decades. If so, best decision you ever made.
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Appreciate the response! Yes, maxing out Roth IRA on top contributing to 401K, HSA etc. all to sit there for a minimum of 30 years.
Just didn't how big of a risk it was to put my entire Roth IRA into one fund (even though it's a mutual fund, which should be pretty safe being that it will sit there for 30 years).
Still a little new to investing, so always nice to double check with this smart group!
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Sure. The best proven asset allocation for a 30 year investment timeline is 100% VTSAX. I’m 100% in VTSAX. My 401k, my HSA, my Roth, my IRA, my brokerage account. All of it. You can consider adding a total bond fund 30 years from now when you want to smooth out volatility.