Author Topic: Starting ROTH and SEP accounts...100 equity allocation. Index Selection??  (Read 940 times)


  • 5 O'Clock Shadow
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  • Posts: 60
Just a tiny bit of background. I'm 28, self-employed, and want to kick some a** for retirement :) Sorry if that was a bit harsh. Anyways, I've probably read about 5 books over the last two weeks on all of this.

Everything I see from these book basically came down to this. Low cost/expenses, indexes, invest early with a plan, stick with the plan no matter what happens, diversification, equities over the long run provide provide best returns, rebalance based on rules or annually, continually invest. I think that about sums up my last two weeks of reading those agonizingly boring books. lol. I'll read more in due time, but the time is coming to take action as I'm working on taxes for 2015 and need to make my contributions for 2015.

The IRAs will be a backup plan that I can hopfully keep dumping good sums of money in each year, however I am invested in real estate rentals and will be even more so as time passes. Hopefully by the time I choose to retire (whenever that is), I'll plenty between both investments (real estate and the IRA).

I'm not concerned about the volatility of the market as I've invested lots of money in my own business that's, let's face it, likely a MUCH higher risk than equities/funds in the stock market. I'm also comfortable with the information that I've seen, read, etc... that I feel good about the AA I've chosen.  Obviously, when I get to retirement time +- 5yrs (roughly) I can look at changing to an AA with much less standard deviation.

Sorry for the long story, I'm having a tough time choosing funds over at vanguard and am looking for any input or suggestions.

I am not isolated to Vanguard. I am open to using other institutions as well.

I've been considering the following equity classes:
25% Large-Cap (value, growth or blend??)
25% Mid-Cap (value, growth or blend??)
25% Small-Cap (value, growth or blend??)
25% International/Emerging Markets

What are your guys'/gals' thoughts on the allocation within equity? Any input on value vs growth vs blend? Does value vs growth typically have a tendency to RTM between the two? I know in much of the literature I've been reading it is suggesting value is the way to go, however I also read in, I think, one of swedroe's books that they end up balancing out over time (says the past). Obviously, no one has a crystal ball and basing any off the past can be a bit dangerous.

I suppose, once I get some opinions then perhaps I'll narrow down specific index choices. That brings me to the next question real quick, are indexes the way to go? I see their actively managed funds, but all evidence in literature I've been reading is they don't have a record at all for outperforming the index/bencmark, not to mention the erosion from fees/expenses.
« Last Edit: February 02, 2016, 01:17:45 PM by live4soccer7 »