Vanguard accounts and index investment

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jacktumblr1848
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Joined: Sat Nov 28, 2015 12:02 pm

Vanguard accounts and index investment

Post by jacktumblr1848 » Mon Mar 20, 2017 6:29 pm

Hi all,

My employer's 401k is with Vanguard which it is in one of the retirement fund (retirement 20Forever since it looks like I will never get to retire with the inflation and the craziness that's going on all over the world. But that's a separate topic). I have also a Traditional IRA that divided into 3 separate funds (health, energy, and growth). I am planning to open a Roth IRA account and a SEP account with Vanguard this year before the uncle Sam deadline in April.

My question: 1. For my Roth IRA and SEP account, should I invest in the same thing (i.e. total stock or LifeStrategy Moderate Growth Fund, or etc) or should I put both of them in different ETF / mutual fund? 2. What are the funds that one would recommend for someone that's 36 and hope to retirement by 67 (last time I check, that's still the age for Social Security retirement age).

Thanks

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David Jay
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Re: Vanguard accounts and index investment

Post by David Jay » Mon Mar 20, 2017 7:01 pm

1. I would strongly recommend either Total Stock Market or LifeStrategy (perhaps LS Aggressive? It is still more conservative than Total Stock). Sector funds like you have in your Traditional IRA increase volatility without adequately compensating you for the risk.
2. With a 30 year time horizon, I would recommend something in an 80:20 like LifeStrategy Aggressive. It is nicely diversified between US and International with 20% bonds for a bit of stability.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

livesoft
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Re: Vanguard accounts and index investment

Post by livesoft » Mon Mar 20, 2017 7:05 pm

I'd recommend the same 20Forever Target Retirement fund that you use in your 401(k).
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jacktumblr1848
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Joined: Sat Nov 28, 2015 12:02 pm

Re: Vanguard accounts and index investment

Post by jacktumblr1848 » Mon Mar 20, 2017 7:20 pm

Hi Livesoft,

So you would recommend me to put the SEP IRA and the Roth IRA into the same fund as my company 401k retirement 20something? Won't that basically putting all the eggs in the same basket? Or do you feel I already diversify too much and not necessary lol. Am I thinking too much or over thinking it? :(

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David Jay
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Re: Vanguard accounts and index investment

Post by David Jay » Tue Mar 21, 2017 11:57 am

I'm not livesoft, but the point of the all-in-one retirement funds (TargetRetirement, 20Forever, LifeStrategy) is that they are fully diversified. They hold (under the covers) Total Market funds for US and International, as well as diversified Bonds. You do not need to add anything, adding something else is only done if you want to "tilt" AWAY from full diversification.
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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