A 2-Fund Portfolio idea. Opinions Welcome!

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Hiwatter
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A 2-Fund Portfolio idea. Opinions Welcome!

Post by Hiwatter »

Friends,

What are your thoughts on a 2-Fund Portfolio containing the following:

VINIX (Vanguard Institutional Index) which tracks the S&P 500 at a very low E/R (.04)

VWIAX (Vanguard Wellesley Income Fund) The fund is weighted approximately 60% bonds and 40% stock and includes International exposure. E/R comes in at .15

A concern/question is the stock overlap on the 2 funds.

I would hold these in a Transitional IRA account for a minimum of 20 years.

Opinions Welcome! Hit me with it :)

Thanks
Last edited by Hiwatter on Fri Feb 17, 2017 1:21 pm, edited 2 times in total.
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LiveSimple
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Re: A 2-Fund Portfolio idea. Opinions Welcome!

Post by LiveSimple »

What is your asset allocation, what does your Investment Policy Statement say ?

Once you have these, then the roadmap will become more clear.
PFInterest
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Re: A 2-Fund Portfolio idea. Opinions Welcome!

Post by PFInterest »

i wouldnt do it
YMMV
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Hiwatter
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Re: A 2-Fund Portfolio idea. Opinions Welcome!

Post by Hiwatter »

LiveSimple wrote:What is your asset allocation, what does your Investment Policy Statement say ?

Once you have these, then the roadmap will become more clear.
I'm 100% stock right now. (VINIX)

My goal is to have a diverse portfolio, so yes I would like to have some expose to bonds and international. That's why I'm considering adding VWIAX

I am considering a 50/50 mix of both funds (in my Traditional IRA) and holding both for 20 years.

thank you
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Hiwatter
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Re: A 2-Fund Portfolio idea. Opinions Welcome!

Post by Hiwatter »

PFInterest wrote:i wouldnt do it
YMMV
Can you please explain why?
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David Jay
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Re: A 2-Fund Portfolio idea. Opinions Welcome!

Post by David Jay »

I agree with LiveSimple. I would make my fund selections based on my plan, not make my plan based on my fund selections.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius
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matjen
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Re: A 2-Fund Portfolio idea. Opinions Welcome!

Post by matjen »

So you are going to allocate something like 3% to equities around the rest of the globe? That's a deal breaker for me and for most. I would go with Vanguard Total World Stock Index Fund ETF Shares VT and BND or VGIT in the allocations you see fit.
A man is rich in proportion to the number of things he can afford to let alone.
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galeno
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Re: A 2-Fund Portfolio idea. Opinions Welcome!

Post by galeno »

I totally agree. X% VT + Y% BND + Z% CASH according to your age and or risk tolerance is your ticket. Anything else is just speculating.
matjen wrote:So you are going to allocate something like 3% to equities around the rest of the globe? That's a deal breaker for me and for most. I would go with Vanguard Total World Stock Index Fund ETF Shares VT and BND or VGIT in the allocations you see fit.
KISS & STC.
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LiveSimple
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Re: A 2-Fund Portfolio idea. Opinions Welcome!

Post by LiveSimple »

Please decide your equity to bond allocation, such as 60% Equity, 40% bond.
Then decide within the equity, US, to Internaional ratio, international can be from 0% to 50% of your equity allocation.

Once you have these hashed out, then you can identify your funds

You can pick a portfolio from here.
https://www.bogleheads.org/wiki/Lazy_portfolios
http://whitecoatinvestor.com/150-portfo ... han-yours/
http://www.marketwatch.com/lazyportfolio
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2pedals
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Re: A 2-Fund Portfolio idea. Opinions Welcome!

Post by 2pedals »

Please decide your equity to bond allocation, such as 60% Equity, 40% bond.
Then decide within the equity, US, to International ratio, international can be from 0% to 50% of your equity allocation.
I agree with LiveSimple and would like to add the following.

split stocks total between:
Vanguard Total Stock Market Index Fund or ETF
Vanguard Total International Stock Index Fund or ETF

and bond portion to:
Vanguard Total Bond Market Index Fund or ETF
aristotelian
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Re: A 2-Fund Portfolio idea. Opinions Welcome!

Post by aristotelian »

I have become a big fan of Wellesley as it is the only good (mostly) bond fund in my 401k. However I would be concerned about stock diversification because the stock side is only 60 stocks.

I like the concept of using Wellesley for your bond allocation, but consider Total Stock Market for more diversification.

Another possibility might be Extended Market, since Wellesley is heavy in large caps. VEXAX has outperformed the S&P over 1, 10, and 15 year periods but S&P has done better over 3 and 5 year periods.

Running portfolio visualizer, #1 VEXAX 25%/VWIAX 75%, #2 VINIX 50%/VWIAX 50%, and #3 VEXAX 50%/VWIAX 50%, #3 wins with 8.55% annual returns, #1 is second with 7.83%, and #2 comes in last at 7.13%.
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