[Looking to update asset allocation]

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Topic Author
dergon
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Joined: Wed May 15, 2013 10:25 am

[Looking to update asset allocation]

Post by dergon »

[Moved into a new thread from: Vanguard Target retirement funds --admin LadyGeek]

Just read through this thread.

Good info.

I'm looking to do some update on asset allocation in my retirement accounts. There are no low cost bond funds available in my work 457b. (Bunch of PIMCO stuff)


So I'm thinking to go into the 2015 TR fund with some of my holdings to help me start getting to a more appropriate asset allocation for my age.
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nedsaid
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Re: Vanguard Target retirement funds

Post by nedsaid »

While Target Date Retirement funds have their flaws, they are vastly superior to what most small investors would design for their own portfolios left to their own devices. The Vanguard Target Date Retirement funds are excellent as are Fidelity Freedom Index Funds. The Fidelity Freedom Funds, though actively managed with higher expense ratios as well as the T. Rowe Price funds are not optimal but plenty well good enough. American Funds also have excellent Target Date Funds.

I have a small 401(k) plan through my employer, it is invested in the Vanguard 2025 Target Date Retirement fund.

Dimensional Funds have a different philosophy, their Target Funds as they near an investor's retirement age tend to be very heavy with TIPS. Vanguard, Fidelity, T. Rowe Price, and American Funds are more stock heavy, these funds have about 60% stocks whereas Dimensional has more like 30% stocks.
A fool and his money are good for business.
retired@50
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Re: Vanguard Target retirement funds

Post by retired@50 »

dergon wrote: Sun Jun 14, 2020 12:12 pm So I'm thinking to go into the 2015 TR fund with some of my holdings to help me start getting to a more appropriate asset allocation for my age.
Using a near dated (2015) target retirement fund is one creative way of incorporating more bonds in a 401k portfolio when pure bond funds to your liking aren't available.

You may also consider a balanced 60/40 fund if there is one.

Regards,
This is one person's opinion. Nothing more.
Miriam2
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Re: Vanguard Target retirement funds

Post by Miriam2 »

dergon wrote: Just read through this thread.
Good info.

I'm looking to do some update on asset allocation in my retirement accounts. There are no low cost bond funds available in my work 457b. (Bunch of PIMCO stuff)

So I'm thinking to go into the 2015 TR fund with some of my holdings to help me start getting to a more appropriate asset allocation for my age.
Are you using the Target Retirement fund as your bond holding because it has a large % of bonds, or are you transitioning to a portfolio of Target Date funds?

Perhaps if you create a new post with more information on your portfolio and the Target Date fund others can give more specific suggestions tailored to your circumstances. :happy
John Bogle, "The Twelve Pillars of Wisdom" - Pillar 3: Time Marches On. Time dramatically enhances capital accumulation as the magic of compounding accelerates.
Topic Author
dergon
Posts: 27
Joined: Wed May 15, 2013 10:25 am

Re: Vanguard Target retirement funds

Post by dergon »

Miriam2 wrote: Sun Jun 14, 2020 6:08 pm
dergon wrote: Just read through this thread.
Good info.

I'm looking to do some update on asset allocation in my retirement accounts. There are no low cost bond funds available in my work 457b. (Bunch of PIMCO stuff)

So I'm thinking to go into the 2015 TR fund with some of my holdings to help me start getting to a more appropriate asset allocation for my age.
Are you using the Target Retirement fund as your bond holding because it has a large % of bonds, or are you transitioning to a portfolio of Target Date funds?

Perhaps if you create a new post with more information on your portfolio and the Target Date fund others can give more specific suggestions tailored to your circumstances. :happy
I'm looking to increase my % holding of bonds (for age-related reasons), and the 2015 TR has the highest percentage of bonds available in my tax favorable retirement accounts at work.

It would be easier to have a low-cost bond fund I suppose, but that option isn't available... lowest expense bond fund is 0.71% and it gets worse from there.

Another option I suppose would be to purchase a tax-free bond fund in one of my brokerage accounts.

------

From the "more information" side of things:

I'm 53 yo with a 43 yo spouse. Mid 7-figures portfolio. Current asset allocation is about 92/8 Still working full time with high income but looking to more toward part time work soon.


Large Cap: 56.6%
Small Cap: 16.5%
International 18.5
Fixed Income 8.3%

(Cash is at about 1 year of expenses but not included in these percentages)

My delay in re-balancing over the last couple of years have caused my large caps to bloat relative to everything else... separate but related issue.
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steve roy
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Re: [Looking to update asset allocation]

Post by steve roy »

As fate would have it, I've been in the Vanguard TD Fund for years and years. And you know what? It's done as well as anything I have.

For me it's come down to this: You can tilt, you can micro-manage your portfolio, and you MIGHT come out a bit ahead of an asset allocation fund. But probably not. Because as Mike Piper said to me years ago, when you have a bunch of separate funds, you start tweaking them. And invariably you do worse than if you'd just had a Life-Strategy or Target Date fund and put everything into it. You give up a few basis points but you gain by not trying to "fine tune" your accounts and losing money.

My advice: Pick an asset allocation fund that's simple and fits your investing profile, and go with it. (Mine would be, 50% Wellesley; 50% Target Date 2015.)
Topic Author
dergon
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Joined: Wed May 15, 2013 10:25 am

Re: [Looking to update asset allocation]

Post by dergon »

steve roy wrote: Tue Jun 16, 2020 12:39 am As fate would have it, I've been in the Vanguard TD Fund for years and years. And you know what? It's done as well as anything I have.

For me it's come down to this: You can tilt, you can micro-manage your portfolio, and you MIGHT come out a bit ahead of an asset allocation fund. But probably not. Because as Mike Piper said to me years ago, when you have a bunch of separate funds, you start tweaking them. And invariably you do worse than if you'd just had a Life-Strategy or Target Date fund and put everything into it. You give up a few basis points but you gain by not trying to "fine tune" your accounts and losing money.

My advice: Pick an asset allocation fund that's simple and fits your investing profile, and go with it. (Mine would be, 50% Wellesley; 50% Target Date 2015.)
:sharebeer

thanks ...

i moved part yesterday ... from VTSMX into the 2015 TR ...

Asset allocation now 85/15 ...

getting closer
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