Vanguard Balanced

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HotRod140
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Vanguard Balanced

Post by HotRod140 » Fri May 29, 2009 12:29 pm

Anyone have any opinions of the Vanguard Balanced Fund as a one in all core holding for a IRA. A time horizon of 10-12 yrs. How would it compare to the retirement funds. I should mention that I can purchase the admiral shares of either funds.
Thanks

Paul Puckett
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Re: Vanguard Balanced

Post by Paul Puckett » Fri May 29, 2009 12:36 pm

HotRod140 wrote:Anyone have any opinions of the Vanguard Balanced Fund as a one in all core holding for a IRA. A time horizon of 10-12 yrs. How would it compare to the retirement funds. I should mention that I can purchase the admiral shares of either funds.
Thanks
Two answers:

1) I have no problem with the Vanguard Balanced Index as the sole holding of an IRA, although if memory serves it has no international exposure? I'll have to look. If it has international exposure, I'm fine with a one fund IRA and that's a great choice. If it has no international, add Total International.

2) If you can buy Admiral Class, I'd suggest a couple more funds of your choice.

Paul
Money is not your life. It is simply the means to the life that you want.

saurabhec
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Re: Vanguard Balanced

Post by saurabhec » Fri May 29, 2009 12:58 pm

HotRod140 wrote:Anyone have any opinions of the Vanguard Balanced Fund as a one in all core holding for a IRA. A time horizon of 10-12 yrs. How would it compare to the retirement funds. I should mention that I can purchase the admiral shares of either funds.
Thanks
It is a pretty good fund because it automatically rebalances for you. Main shortcoming is that it does not have international equities. The LifeStrategy Moderate Growth fund does, but it varies its equity mix from 45% to 70%. You could always use the Vanguard Balanced index as the core and supplement with international stock funds in your IRA.

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HotRod140
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Vanguard Balanced

Post by HotRod140 » Fri May 29, 2009 1:10 pm

Hey Paul

What would you suggest?

DSInvestor
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Post by DSInvestor » Fri May 29, 2009 1:18 pm

Hotrod, it's very difficult to make recommendations with so little information. Here's a thread called Asking portfolio questions that will show you what kind of information would be helpful and the format to use.
http://www.bogleheads.org/forum/viewtopic.php?t=6212

You'll get higher quality recommendations with more information.

Paul Puckett
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Post by Paul Puckett » Fri May 29, 2009 2:47 pm

DSInvestor wrote:Hotrod, it's very difficult to make recommendations with so little information. Here's a thread called Asking portfolio questions that will show you what kind of information would be helpful and the format to use.
http://www.bogleheads.org/forum/viewtopic.php?t=6212

You'll get higher quality recommendations with more information.
I agree with DSInvestor, although instinctively I bet he, just like me, has some ideas, it wouldn't be appropriate to make specific fund recommendations without all the facts, and I wouldn't recommend you put all of them on any blog (even this one!) :D

In addition to the link DSI gave you, if you go directly to the Vanguard site, I believe they have a portfolio tool that you can use. Generally, I think the Balanced Index is a very good fund, but look at funds like the Total International and similar funds to broaden it's coverage. Diversification has always been important, but it is especially important in the current environment.
Money is not your life. It is simply the means to the life that you want.

jharri71
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Post by jharri71 » Fri May 29, 2009 3:05 pm

Take a look at the STAR fund (VGSTX). It is basically the same fund , but with international exposure, with only a slightly higher expense ratio.

maj
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Suggestion

Post by maj » Fri May 29, 2009 3:25 pm

If you want to keep it simple for 10-12 years, why not invest as Vanguard does for the Vanguard Charitable Trust Moderate allocation portfolio:
50% Balanced Index
50% Wellington Fund

With both funds you have an approximate 60-40 stock-bond balance,
and low costs, and wide diversification.
*****

Indeed, LifeStrategy Moderate Growth would be superior to Balanced Index, with 10% international exposure, if it were not for the 25% exposure to the Asset Allocation Fund which offers an unstable 30% swing between stocks and bonds and cash based on some fancy timing theory which just led to a 40%+ loss in that fund.

peace

maj

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englishgirl
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Post by englishgirl » Fri May 29, 2009 3:33 pm

I have Balanced Index as the core holding in my 401k, because I don't have many Vanguard funds available. But I supplement it with TIPs, International, REIT and small cap in my IRA and 401k. I like that Balanced Index has a static mix of TSM and TBM so it works for me for now. I may even continue with it once I have left my job and rolled my 401k to an IRA.

But yes, it's best to post your whole portfolio so people can give appropriate answers on it in relation to the rest of your portfolio, and your intended AA, etc.
Sarah

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curly lambeau
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Re: Suggestion

Post by curly lambeau » Fri May 29, 2009 3:40 pm

maj wrote: Indeed, LifeStrategy Moderate Growth would be superior to Balanced Index, with 10% international exposure, if it were not for the 25% exposure to the Asset Allocation Fund which offers an unstable 30% swing between stocks and bonds and cash based on some fancy timing theory which just led to a 40%+ loss in that fund.
That's the problem. 25% is held in a market timing fund.

Dead Man Walking
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Post by Dead Man Walking » Fri May 29, 2009 7:01 pm

If a 60/40 allocation is what you desire, Target Retirement 2015 is comparable to Balanced Index. 2015 is 62/38 and has 12.6% in international funds. Of course, the equity allocation will drop gradually over the next 10-12 years. For example, TR 2010 is 53/47; TR 2005 is 40/60; TR Income is about 30/70.

DMW

retiredjg
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Re: Vanguard Balanced

Post by retiredjg » Fri May 29, 2009 7:29 pm

HotRod140 wrote:Anyone have any opinions of the Vanguard Balanced Fund as a one in all core holding for a IRA.
It is not possible to answer this question without knowing what else you hold in the way of retirement investments - 401(k), taxable, other IRAs. That's like asking if you need more bricks to build a house without stipulating what building supplies you already have.

Check out the links at the bottom of this message for what information you need to post to get a good answer to your question. And yes, balanced fund should be just fine if that is what you need. If that is not what you need, then not so much.

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SquawkIdent
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Post by SquawkIdent » Fri May 29, 2009 7:48 pm

jharri71 wrote:Take a look at the STAR fund (VGSTX). It is basically the same fund , but with international exposure, with only a slightly higher expense ratio.
Another vote for this fund.

Beagler
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Post by Beagler » Sun May 31, 2009 5:26 pm

FWIW, $10K invested 10 years ago
Balanced Index = $12,308
Wellington = $15,379

That's almost 25% difference.

(Past returns are no guarantee, yadda yadda yadda)
“The only place where success come before work is in the dictionary.” Abraham Lincoln. This post does not provide advice for specific individual situations and should not be construed as doing so.

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