topspin70 wrote:I'm 47 years old and planning to move all my investments (approximately 950,000 US dollars) to VTSAX. I have tried Dividend Growth investing and I think I can sleep better by doing index fund. DGI is consuming a lot of my time.
JLCollins in his book recommended a mix of VTSAX an VBLTX. Since I'm planning to work for the next 10 years I don't see the need to have Bond allocation.
I would like to know the advantages and disadvantages of this approach.
There are a lot of good posts here, a lot of good insight.
I am also pretty aggressive when it comes to investing and even I would worry about your strategy of being all in on the US stock market now and nothing else, esp 10 years from retirement.
The wife and I are 44 and portfolio of $1.3M. I'd like to work another 11-13 years, the wife another 15-17. Just a few months ago, I was all equities but knew it was time to move some to fixed income, esp. after the nice run the last 8 years. I moved to 83.5% stock, 16.5 Van Total Bond and I'm certainly light on bonds compared to the collective average of this board. I am also 50/50 Us/int and also tilt small value us and EM (my EM are 16% of my ENTIRE portfolio). Many would think my INT is too high but it what the global stock market is and Int valuations are much better. You should really consider something earmarked to INT, probably 15% at a minimum! Also, I would recommend getting some value in the portfolio.
They way I have come to look at fixed income (my Van total bond) is that I have chopped 220K off of stock portfolio and now look at it like this:
-I have a portfolio of growth (Stocks) of 1.080M. Just a few years ago, I would have been real happy to have 1M in my total portfolio.
-I have "guaranteed" 220K by holding bonds - I'm not going to get much with them but if/when the market drops, I can buy on dips. I haven't figured out when I will do that yet (maybe 5% drops?). If the market does not drop, well, then that is even better for me overall.
You need to think about what happens if the market drops 10-20% and then stays flat for 5-10 years. Can you retire in 10 years on 760K-850k?