Honestly, that's not bad.captainperson wrote:Do most people do 33.33% of each of the 3 funds index in their portfolio?
Usually the first order of business (from the simplified Boglehead perspective) is to determine how much risk you want to accept. Translation: determine how much you want in stocks by assuming they'll crash by 50% every so often, and that you'll be staying the course throughout those crashes. The rest will go into bonds. Next, determine how much of those stocks to hold in foreign markets. Marketweight is currently about half of all stocks (and your initial idea follows marketweight). The usual recommendation is a minimum of 20% of stocks (not of the whole portfolio) in international equities, with the historical sweet-spot or middle ground at 30% of stocks, all the way up to market weight.
The percent you determine for International stocks goes into a "total" international index fund. The rest goes into a "total" U.S. market index fund. Nice and easy.
As time passes you may realize that your tolerance, need or willingness for risk goes down, especially if you believe you will meet your goals. Increasing the allocation to bonds through new contributions or rebalancing is the principle way to lower your equity risk and sleep well at night.
There is a broad range of what is reasonable, as long as you can stick with your asset allocation through the rough times. The Three Fund portfolio is great because it so easily and effectively adapts to one's willingness, need and tolerance for risk.
Discussion: Domestic vs. International
International vs. Domestic Equity Percentage 2011
Discussion : International investing: A good call by our mentor
Discussion: Need for International Investing?