Help me choose between 4 Vanguard Funds

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darthvader747
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Help me choose between 4 Vanguard Funds

Post by darthvader747 » Fri Feb 15, 2013 7:25 pm

General Info:
401k maxed
Roth 2012 & 2013 maxed - Life Strategy moderate growth fund (VSMGX 60% stock | 40% bond)
I want to invest ~$1000 / month (after tax)
Time Period - 7-10 years (Can keep it longer if the market performs poorly)
Risk Appetite: Moderate

Which would you pick?

- Vanguard 500 Index Fund (VFINX)
-Vanguard Life Strategy Moderate Growth fund (same as what I have in my Roth)
-Vanguard Life Strategy Growth fund (VASGX) [80% Stock | 20% Bond]
- Vanguard Target Retirement Fund 2020 / 2025 (This is tricky because I might change my mind and want to continue investing beyond 10years)

Please recommend

I am leaning toward Vanguard 500 or Vanguard Life Strategy Growth Fund

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hoppy08520
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Re: Help me choose between 4 Vanguard Funds

Post by hoppy08520 » Fri Feb 15, 2013 7:33 pm

To provide a good recommendation, we need the context of your complete portfolio including your 401(k). It doesn't make sense to pick a single fund in a single account in isolation. Check out the posting format in the "asking portfolio questions" thread at the top of this forum. You can edit your original post the additional information in your original post to keep everything in one place.

z3r0c00l
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Re: Help me choose between 4 Vanguard Funds

Post by z3r0c00l » Fri Feb 15, 2013 7:44 pm

My advice would be VTSAX. Add more bonds to your 401k to keep your overall AA on target if needed.

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BolderBoy
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Re: Help me choose between 4 Vanguard Funds

Post by BolderBoy » Fri Feb 15, 2013 7:51 pm

darthvader747 wrote:General Info:
Risk Appetite: Moderate

Which would you pick?

- Vanguard 500 Index Fund (VFINX)

Please recommend

I am leaning toward Vanguard 500 & or Vanguard growth strategy fund



With your risk appetite, you might prefer Total Stock Market Index - it'll have somewhat better diversification.

darthvader747
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Re: Help me choose between 4 Vanguard Funds

Post by darthvader747 » Fri Feb 15, 2013 10:40 pm

hoppy08520 wrote:To provide a good recommendation, we need the context of your complete portfolio including your 401(k). It doesn't make sense to pick a single fund in a single account in isolation. Check out the posting format in the "asking portfolio questions" thread at the top of this forum. You can edit your original post the additional information in your original post to keep everything in one place.


I have 'vanguard target retirement 2045' in my 401k.

pingo
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Re: Help me choose between 4 Vanguard Funds

Post by pingo » Sat Feb 16, 2013 4:59 am

hoppy08520 wrote:To provide a good recommendation, we need the context of your complete portfolio including your 401(k). It doesn't make sense to pick a single fund in a single account in isolation. Check out the posting format in the "asking portfolio questions" thread at the top of this forum. You can edit your original post the additional information in your original post to keep everything in one place.


+1

1. Here's the link: Asking Portfolio Questions

2. Not knowing anything about your situation, I suppose that since you've been comfortable and (presumably) staying the course with the VG LifeStrategy Moderate Growth Fund in other accounts, that says a lot about what may be an appropriate asset allocation, whether for your new fund or for the whole portfolio.

3. I'm probably abusing this board with how much I've been posting this lately, but the need for more tax-advantaged space has come up a lot, so I'll suggest that you check whether your 401k allows after-tax contributions as well as in-service withdrawals of those after-tax contributions (not to be confused with Roth 401k contributions). Here are 4 links talking about after-tax contributions: here, here, here and here.

If your employer allows you to make regular in-service withdrawals of your 401k after-tax contributions (again, these are not the same as Roth 401k contributions), you could have such contributions directly rolled over to your VG Roth account and they'd be tax-free and RMD-free forever. They do not affect your Roth IRA contribution limits.

If in-service withdrawals are not allowed, I wouldn't bother with 401k after-tax contributions.

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Taylor Larimore
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Keep investing simple

Post by Taylor Larimore » Sat Feb 16, 2013 7:38 am

Darthvader

Your primary decision is to decide your stock/bond ratio. Use this link for help:

https://personal.vanguard.com/us/funds/ ... mmendation

Once this is decided, the rest is easy:

1. You apparently have Vanguard Target Funds in your 401K. Select the appropriate Target fund with the stock/bond allocation you want.

2. Select the same Target fund in your IRA.

Done.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

moneytobless
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Re: Help me choose between 4 Vanguard Funds

Post by moneytobless » Sun Feb 17, 2013 12:19 am

Hi darthvader747,

The page on tax-efficient investing is a good resource.

http://www.bogleheads.org/wiki/Principles_of_Tax-Efficient_Fund_Placement

If you’re investing after-tax money in a taxable account, VFINX makes the most sense tax-wise. All the other funds have bonds, which shouldn’t be in taxable accounts if at all possible.

If you do this, as Taylor mentioned, just make sure you stay within your desired allocation.

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