Does it make sense to split between some domestic funds

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lepa71
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Does it make sense to split between some domestic funds

Post by lepa71 » Thu Mar 09, 2017 3:57 pm

My wife's work(cargill) uses Vanguard and they offer the following funds:
Vanguard PRIMECAP Fund Admiral VPMAX
Vanguard Inst Index Fund Inst Plus VIIIX
Vanguard Windsor II Fund Adm VWNAX

So my question is. Is there a need to diversify between those or not?

Thanks

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David Jay
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Re: Does it make sense to split between some domestic funds

Post by David Jay » Thu Mar 09, 2017 4:14 pm

I would look at your combined retirement accounts as a single portfolio. If in your accounts you can adjust to achieve your desired asset allocation, I see no need to diversify. Throw it all in VIIIX.

Here is a link to a White Coat Investor post on investment portfolios. Check out Portfolio #1:
http://whitecoatinvestor.com/150-portfo ... han-yours/
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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Kevin M
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Re: Does it make sense to split between some domestic funds

Post by Kevin M » Thu Mar 09, 2017 4:17 pm

Probably better to first decide on a target asset allocation, and whether or not you'd prefer to stick with index funds rather than use actively managed funds.

All of these are large-cap US stock funds.

VIIIX is a 500 index fund, which is large-cap blend, and is the one I'd choose for US stocks.

VPMAX is a large-cap growth fund and VWNAX is a large-cap value fund; both are actively managed. Combining these two gets you roughly a large-cap blend fund, but the active management adds additional uncertainty about what you're actually getting.

Unless you want 100% stocks, you probably also want a bond fund.

Many of us here also like to include an international stock fund at 20%-40% of stocks (some even more, some even less).

Kevin
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centrifuge41
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Re: Does it make sense to split between some domestic funds

Post by centrifuge41 » Thu Mar 09, 2017 4:25 pm

Yeah, Vanguard Institutional Index is good. But hopefully, there's a way for you to grab some small and/or mid caps elsewhere in your portfolio to balance it out.

Reference

lepa71
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Re: Does it make sense to split between some domestic funds

Post by lepa71 » Thu Mar 09, 2017 5:17 pm

When I get home I will post all funds available to choose from and the current allocation I picked. Then I would ask you guy to chip in.

as of right now VPMAX has been outperforming all others of course with higher expense fees.

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Kevin M
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Re: Does it make sense to split between some domestic funds

Post by Kevin M » Thu Mar 09, 2017 5:59 pm

lepa71 wrote:When I get home I will post all funds available to choose from and the current allocation I picked. Then I would ask you guy to chip in.

as of right now VPMAX has been outperforming all others of course with higher expense fees.

Include expense ratios.

Past performance generally is not considered to be the best indicator of future performance.

Kevin
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