grabiner wrote:Vanguard's small-cap index has some mid-caps by the usual definition; it's about the bottom 15% of the market. It doesn't overlap with the mid-cap index, which is about the next 15%. Thus, to get a total market allocation with the three funds you have, your US allocation would be 70% Institutional Index (which is the S&P 500), 15% Mid-Cap Index, 15% Small-Cap Index. Your international allocation can be Total International, and your bond allocation Total Bond Market. With institutional shares, you'll have extremely low expenses.
You want a 60/40 portfolio; you didn't specify an international allocation, so I'll assume 30% of the stock. Thus:
30% Institutional Index
6% Mid-Cap Index
6% Small-Cap Index
18% Total International
40% Total Bond Market Index
Rebalance annually to this allocation.
mphilips wrote:One more question... if the target retirement funds don't offer the 40 / 60 allocation that I am looking for is there anything wrong with a mix of the target funds themselves. For example 60% VTENX and 40% VTINX creates an asset allocation that is very close to 40 / 60 ... It also includes 2 % in cash.
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