[Considering the Vanguard LifeStrategy Fund]

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HickoryHill
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[Considering the Vanguard LifeStrategy Fund]

Post by HickoryHill » Mon Jul 09, 2018 8:44 pm

I took on an advisor nearly a year ago, with 1% fee, and my goal was to get my investments as well diversified as possible. I finally came to the conclusion after many years of investing, mostly through an advisor, that Jack Bogle had it all right with complete diversification, weighted for age, goals, personal finances, etc.
The portfolio has been set up with a 60/40 ration, with diversification of US, foreign, emerging markets, and intermediate term corporate bonds.
All is invested in 20 very low-cost ETFs, many of which are Vanguard.
My question revolves around finding a lower-cost methodology for the portfolio by releasing the advisor and trading the 20 for even fewer ETFS, and am considering the Vanguard Life Strategy Fund (.13%) as the primary fund.
I am so used to thinking about diversifying with several funds/ETFs (e.g. VSMGX) that I feel a bit uncomfortable with only 2,3 or 4 fundss/ETFs, even when each might be a fund of funds.
Anyone have thoughts or experiences with this?
Thanks for any help you might give.

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Pajamas
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Re: Lifestyle Strategies

Post by Pajamas » Mon Jul 09, 2018 9:24 pm

HickoryHill wrote:
Mon Jul 09, 2018 8:44 pm
I am so used to thinking about diversifying with several funds/ETFs (e.g. VSMGX) that I feel a bit uncomfortable with only 2,3 or 4 fundss/ETFs, even when each might be a fund of funds.
What exactly makes you feel uncomfortable? Maybe breaking it down will help.

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Toons
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Location: Hills of Tennessee

Re: Lifestyle Strategies

Post by Toons » Mon Jul 09, 2018 9:32 pm

Vanguard Life Strategy Fund
Great Idea...

I Currently hold monies in Lifestrategy Conservtive Growth Fund.
I glance it it a couple times a year.
It is simple and effective. :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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BL
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Re: Lifestyle Strategies

Post by BL » Mon Jul 09, 2018 9:36 pm

Toons wrote:
Mon Jul 09, 2018 9:32 pm
Vanguard Life Strategy Fund
Great Idea...

I Currently hold monies in Lifestrategy Conservtive Growth Fund.
I glance it it a couple times a year.
It is simple and effective. :happy
+1
It is meant to be used as a single, complete, and diversified fund in your account. Adding things to it detract from that goal.

Dottie57
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Joined: Thu May 19, 2016 5:43 pm

Re: Lifestyle Strategies

Post by Dottie57 » Mon Jul 09, 2018 9:46 pm

OP,

I’ve done well using index funds , low cost and very diversified. Total stock(US), Total bond and Total International. I have all of the categories of stock ( large growth, large value, small growth, small value) in the total indexes.

I once had a slice and dice portfolio that did not work that well for me. I didn’t know quite how to rebalance.

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Sandtrap
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Location: Hawaii😀 Northern AZ.😳 Retired.

Re: Lifestyle Strategies

Post by Sandtrap » Mon Jul 09, 2018 9:50 pm

Why not post what you have (edit original post) and get comprehensive suggestions specific to your financial positions?
Here's the format:
Asking Portfolio Questions
https://www.bogleheads.org/forum/viewt ... =1&t=6212

Some reading:
Bogle 3 Fund Portfolio Basics and Beyond
https://www.bogleheads.org/wiki/Three- ... _portfolio

TAYLOR LARIMORE ON “SIMPLICTY”
https://www.bogleheads.org/forum/viewt ... p?t=156505

Chaconne
Posts: 137
Joined: Sat Dec 15, 2007 4:18 pm

Re: Lifestyle Strategies

Post by Chaconne » Mon Jul 09, 2018 9:53 pm

Welcome to Bogleheads!

I'm a rank amateur compared to most folks here, but in my personal opinion, I'd say that 20 ETFs are about 17 too many. You might want to check out the three-fund portfolio thread here:

viewtopic.php?f=10&t=88005

Best of luck.
-Bob

delamer
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Re: Lifestyle Strategies

Post by delamer » Mon Jul 09, 2018 10:47 pm

Setting up a portfolio yourself with several funds would be an improvement over using 20 like your adviser is now.

You should take a look at the section in the Bogleheads wiki on “lazy portfolios.” You will find several options there that contain from 2 to 10 funds.

HickoryHill
Posts: 31
Joined: Fri Jul 06, 2018 7:52 am

Re: Lifestyle Strategies

Post by HickoryHill » Tue Jul 10, 2018 7:53 am

Pajamas wrote:
Mon Jul 09, 2018 9:24 pm
HickoryHill wrote:
Mon Jul 09, 2018 8:44 pm
I am so used to thinking about diversifying with several funds/ETFs (e.g. VSMGX) that I feel a bit uncomfortable with only 2,3 or 4 fundss/ETFs, even when each might be a fund of funds.
What exactly makes you feel uncomfortable? Maybe breaking it down will help.
Thanks for your thoughts. There is probably not a lot of logic to that discomfort, other than the simple notion that having more positions might reduce the effect of a downturn; I have come to understand how having more positions doesn't mean that one is more diversified.
A certain amount of protection from malfeasance within a given fund is probably part of the feeling.
Part of the reason there are around 20 funds/ETFs is that there are 4 different accounts, total, for my wife and I (Roth and IRA for wife and IRA/Taxable for me).
As I think about it now, using VSMGX, or another Lifestyle Strategy mix might simplify the process of diversification - each account is funded with the same Fund, and each is diversified. The current situation is that the 4 accounts hold different positions that in total give the diversification.

HickoryHill
Posts: 31
Joined: Fri Jul 06, 2018 7:52 am

Re: Lifestyle Strategies

Post by HickoryHill » Tue Jul 10, 2018 7:57 am

Toons wrote:
Mon Jul 09, 2018 9:32 pm
Vanguard Life Strategy Fund
Great Idea...

I Currently hold monies in Lifestrategy Conservtive Growth Fund.
I glance it it a couple times a year.
It is simple and effective. :happy
Thank you. I think my question is whether site members feel comfortable with have very large portions of their portfolio in 1 or 2 accounts like Lifestyle Strategies.

HickoryHill
Posts: 31
Joined: Fri Jul 06, 2018 7:52 am

Re: Lifestyle Strategies

Post by HickoryHill » Tue Jul 10, 2018 8:02 am

Dottie57 wrote:
Mon Jul 09, 2018 9:46 pm
OP,

I’ve done well using index funds , low cost and very diversified. Total stock(US), Total bond and Total International. I have all of the categories of stock ( large growth, large value, small growth, small value) in the total indexes.

I once had a slice and dice portfolio that did not work that well for me. I didn’t know quite how to rebalance.
Thank you.
I was in that position, also, and the advisor did accomplish this goal - with very low-cost funds/ETFs; so, I am pleased with this.
I'm trying to figure out if I can save my 1% advisor fee and get the total diversification with a Lifestyle Strategy Vanguard fund and feel comfortable having the entire portfolio in 1 or 2 funds.

HickoryHill
Posts: 31
Joined: Fri Jul 06, 2018 7:52 am

Re: Lifestyle Strategies

Post by HickoryHill » Tue Jul 10, 2018 8:03 am

Sandtrap wrote:
Mon Jul 09, 2018 9:50 pm
Why not post what you have (edit original post) and get comprehensive suggestions specific to your financial positions?
Here's the format:
Asking Portfolio Questions
https://www.bogleheads.org/forum/viewt ... =1&t=6212

Some reading:
Bogle 3 Fund Portfolio Basics and Beyond
https://www.bogleheads.org/wiki/Three- ... _portfolio

TAYLOR LARIMORE ON “SIMPLICTY”
https://www.bogleheads.org/forum/viewt ... p?t=156505
Thank you

User avatar
Pajamas
Posts: 6015
Joined: Sun Jun 03, 2012 6:32 pm

Re: Lifestyle Strategies

Post by Pajamas » Tue Jul 10, 2018 8:08 am

HickoryHill wrote:
Tue Jul 10, 2018 7:53 am
Pajamas wrote:
Mon Jul 09, 2018 9:24 pm
HickoryHill wrote:
Mon Jul 09, 2018 8:44 pm
I am so used to thinking about diversifying with several funds/ETFs (e.g. VSMGX) that I feel a bit uncomfortable with only 2,3 or 4 fundss/ETFs, even when each might be a fund of funds.
What exactly makes you feel uncomfortable? Maybe breaking it down will help.
Thanks for your thoughts. There is probably not a lot of logic to that discomfort, other than the simple notion that having more positions might reduce the effect of a downturn; I have come to understand how having more positions doesn't mean that one is more diversified.
A certain amount of protection from malfeasance within a given fund is probably part of the feeling.
Part of the reason there are around 20 funds/ETFs is that there are 4 different accounts, total, for my wife and I (Roth and IRA for wife and IRA/Taxable for me).
As I think about it now, using VSMGX, or another Lifestyle Strategy mix might simplify the process of diversification - each account is funded with the same Fund, and each is diversified. The current situation is that the 4 accounts hold different positions that in total give the diversification.
I think there is something to be said for holding similar accounts at two different institutions or more. It's good to have an established relationship in case there is a problem. The problem might be something as simple as a change in the level of customer service. Inevitably, when you need to change institutions it will happen at an inconvenient time and be time consuming, so it's much easier to be prepared.

Planning across accounts can be complicated and can result in multiple individual investments especially when selections are limited. Here's a good article that might help:

https://www.bogleheads.org/wiki/Asset_a ... e_accounts

I do think most people are okay with the diversification of index funds because of the multiple holdings. A fund of funds such as a target date fund would be even more diversified in most instances because it involves multiple asset classes (equities and bonds).

HickoryHill
Posts: 31
Joined: Fri Jul 06, 2018 7:52 am

Re: Lifestyle Strategies

Post by HickoryHill » Tue Jul 10, 2018 8:14 am

Thanks.
It's my understanding that the Lifestyle Strategies is very similar to the target-date type funds, in that one can choose the ratio of equities vs fixed income depending on one's needs. Each of the Lifestyle Strategy funds is a fund of funds.

HickoryHill
Posts: 31
Joined: Fri Jul 06, 2018 7:52 am

Re: Lifestyle Strategies

Post by HickoryHill » Tue Jul 10, 2018 8:21 am

Pajamas wrote:
Tue Jul 10, 2018 8:08 am
HickoryHill wrote:
Tue Jul 10, 2018 7:53 am
Pajamas wrote:
Mon Jul 09, 2018 9:24 pm
HickoryHill wrote:
Mon Jul 09, 2018 8:44 pm
I am so used to thinking about diversifying with several funds/ETFs (e.g. VSMGX) that I feel a bit uncomfortable with only 2,3 or 4 fundss/ETFs, even when each might be a fund of funds.
What exactly makes you feel uncomfortable? Maybe breaking it down will help.
Thanks for your thoughts. There is probably not a lot of logic to that discomfort, other than the simple notion that having more positions might reduce the effect of a downturn; I have come to understand how having more positions doesn't mean that one is more diversified.
A certain amount of protection from malfeasance within a given fund is probably part of the feeling.
Part of the reason there are around 20 funds/ETFs is that there are 4 different accounts, total, for my wife and I (Roth and IRA for wife and IRA/Taxable for me).
As I think about it now, using VSMGX, or another Lifestyle Strategy mix might simplify the process of diversification - each account is funded with the same Fund, and each is diversified. The current situation is that the 4 accounts hold different positions that in total give the diversification.
I think there is something to be said for holding similar accounts at two different institutions or more. It's good to have an established relationship in case there is a problem. The problem might be something as simple as a change in the level of customer service. Inevitably, when you need to change institutions it will happen at an inconvenient time and be time consuming, so it's much easier to be prepared.

Planning across accounts can be complicated and can result in multiple individual investments especially when selections are limited. Here's a good article that might help:

https://www.bogleheads.org/wiki/Asset_a ... e_accounts

I do think most people are okay with the diversification of index funds because of the multiple holdings. A fund of funds such as a target date fund would be even more diversified in most instances because it involves multiple asset classes (equities and bonds).
Thanks

HickoryHill
Posts: 31
Joined: Fri Jul 06, 2018 7:52 am

Re: Lifestyle Strategies

Post by HickoryHill » Tue Jul 10, 2018 8:34 am

HickoryHill wrote:
Tue Jul 10, 2018 8:21 am
Pajamas wrote:
Tue Jul 10, 2018 8:08 am
HickoryHill wrote:
Tue Jul 10, 2018 7:53 am
Pajamas wrote:
Mon Jul 09, 2018 9:24 pm
HickoryHill wrote:
Mon Jul 09, 2018 8:44 pm
I am so used to thinking about diversifying with several funds/ETFs (e.g. VSMGX) that I feel a bit uncomfortable with only 2,3 or 4 fundss/ETFs, even when each might be a fund of funds.
What exactly makes you feel uncomfortable? Maybe breaking it down will help.
Thanks for your thoughts. There is probably not a lot of logic to that discomfort, other than the simple notion that having more positions might reduce the effect of a downturn; I have come to understand how having more positions doesn't mean that one is more diversified.
A certain amount of protection from malfeasance within a given fund is probably part of the feeling.
Part of the reason there are around 20 funds/ETFs is that there are 4 different accounts, total, for my wife and I (Roth and IRA for wife and IRA/Taxable for me).
As I think about it now, using VSMGX, or another Lifestyle Strategy mix might simplify the process of diversification - each account is funded with the same Fund, and each is diversified. The current situation is that the 4 accounts hold different positions that in total give the diversification.
I think there is something to be said for holding similar accounts at two different institutions or more. It's good to have an established relationship in case there is a problem. The problem might be something as simple as a change in the level of customer service. Inevitably, when you need to change institutions it will happen at an inconvenient time and be time consuming, so it's much easier to be prepared.

Planning across accounts can be complicated and can result in multiple individual investments especially when selections are limited. Here's a good article that might help:

https://www.bogleheads.org/wiki/Asset_a ... e_accounts

I do think most people are okay with the diversification of index funds because of the multiple holdings. A fund of funds such as a target date fund would be even more diversified in most instances because it involves multiple asset classes (equities and bonds).
Thanks

freebeer
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Location: Seattle area USA

Re: Lifestyle Strategies

Post by freebeer » Tue Jul 10, 2018 8:47 am

HickoryHill wrote:
Tue Jul 10, 2018 7:57 am
Toons wrote:
Mon Jul 09, 2018 9:32 pm
Vanguard Life Strategy Fund
Great Idea...

I Currently hold monies in Lifestrategy Conservtive Growth Fund.
I glance it it a couple times a year.
It is simple and effective. :happy
Thank you. I think my question is whether site members feel comfortable with have very large portions of their portfolio in 1 or 2 accounts like Lifestyle Strategies.
You will find both KISS lumpers and optimize total returns slice-and-dice splitters here. That is an evergreen debate, and you seem like a slice and dicer, so fine. But almost alll slice-and-dicers would say:

a) 17 funds is too many for an effective portfolio (if you have a couple big chunks in TSM and total international stock market then you probably only have 20% left to allocate, so that's maybe 2 or 3 more funds, so 5 total equity and maybe 2 or 3 in bonds depending on whether funds are held in tax deferred accounts)

b) if you're going to slice and dice have a clear rebalancing approach in your personal financial plan and stick to it. Staying with
*some* rebalancing plan is probably more important than which plan it is.

alex_686
Posts: 3944
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Re: Lifestyle Strategies

Post by alex_686 » Tue Jul 10, 2018 8:57 am

HickoryHill wrote:
Tue Jul 10, 2018 7:53 am
A certain amount of protection from malfeasance within a given fund is probably part of the feeling.
Having worked in operations I would not worry about this. Between dual controls, external auditors, and government regulation things are pretty tight. I can only think of a few minor cases of malfeasance over the past 30 years. Incompetence yes, but index funds are a commodity product so even this is rare here.

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vineviz
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Re: Lifestyle Strategies

Post by vineviz » Tue Jul 10, 2018 9:00 am

freebeer wrote:
Tue Jul 10, 2018 8:47 am
a) 17 funds is too many for an effective portfolio (if you have a couple big chunks in TSM and total international stock market then you probably only have 20% left to allocate, so that's maybe 2 or 3 more funds, so 5 total equity and maybe 2 or 3 in bonds depending on whether funds are held in tax deferred accounts)
Yes to this.

I've never encountered a portfolio with 15 or more funds that couldn't be reduced to 8 or fewer funds without any loss in expected return and diversification.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

HickoryHill
Posts: 31
Joined: Fri Jul 06, 2018 7:52 am

Re: Lifestyle Strategies

Post by HickoryHill » Tue Jul 10, 2018 9:51 am

freebeer wrote:
Tue Jul 10, 2018 8:47 am
HickoryHill wrote:
Tue Jul 10, 2018 7:57 am
Toons wrote:
Mon Jul 09, 2018 9:32 pm
Vanguard Life Strategy Fund
Great Idea...

I Currently hold monies in Lifestrategy Conservtive Growth Fund.
I glance it it a couple times a year.
It is simple and effective. :happy
Thank you. I think my question is whether site members feel comfortable with have very large portions of their portfolio in 1 or 2 accounts like Lifestyle Strategies.
You will find both KISS lumpers and optimize total returns slice-and-dice splitters here. That is an evergreen debate, and you seem like a slice and dicer, so fine. But almost alll slice-and-dicers would say:

a) 17 funds is too many for an effective portfolio (if you have a couple big chunks in TSM and total international stock market then you probably only have 20% left to allocate, so that's maybe 2 or 3 more funds, so 5 total equity and maybe 2 or 3 in bonds depending on whether funds are held in tax deferred accounts)

b) if you're going to slice and dice have a clear rebalancing approach in your personal financial plan and stick to it. Staying with
*some* rebalancing plan is probably more important than which plan it is.
Thanks
My goal is not to be a slice & dice guy, and that was a purpose of going with an advisor, along with the diversification. My goal is to have as few funds as necessary, but with total diversification at low fees. I'm getting the feeling from the responses on the forum that going with the Life Strategy fund as a very large portion of the portfolios and perhaps a very small number of funds to round out the VSMGX as the motherfund. I will need to dig deeper into the VSMGX to see if I feel I want some further diversification (probably won't need it, from my exam, so far).

HickoryHill
Posts: 31
Joined: Fri Jul 06, 2018 7:52 am

Re: Lifestyle Strategies

Post by HickoryHill » Tue Jul 10, 2018 9:55 am

alex_686 wrote:
Tue Jul 10, 2018 8:57 am
HickoryHill wrote:
Tue Jul 10, 2018 7:53 am
A certain amount of protection from malfeasance within a given fund is probably part of the feeling.
Having worked in operations I would not worry about this. Between dual controls, external auditors, and government regulation things are pretty tight. I can only think of a few minor cases of malfeasance over the past 30 years. Incompetence yes, but index funds are a commodity product so even this is rare here.
Thanks.
Your comment is very helpful.
I can verify the incompetence, although in some cases I think it's competence in looking out for their own income and not mine.

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Sandtrap
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Re: Lifestyle Strategies

Post by Sandtrap » Tue Jul 10, 2018 10:01 am

It seems counterproductive to add funds to VSMGX for "further diversification" given that it is a "fund of funds" already.
There would be the option to "tilt" perhaps by adding in Small Cap, Small Cap Value, International, etc etc etc, but doing even that would seem to defeat the purpose of "simplification" by going with a single fund. In that case, the Bogle 3-4 fund portfolio with some tilts or adds might be a better option to keep costs down.
Vanguard LifeStrategy Moderate Growth Fund Investor Shares
MUTF: VSMGX
Image

HickoryHill
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Joined: Fri Jul 06, 2018 7:52 am

Re: Lifestyle Strategies

Post by HickoryHill » Tue Jul 10, 2018 10:20 am

Sandtrap wrote:
Tue Jul 10, 2018 10:01 am
It seems counterproductive to add funds to VSMGX for "further diversification" given that it is a "fund of funds" already.
There would be the option to "tilt" perhaps by adding in Small Cap, Small Cap Value, International, etc etc etc, but doing even that would seem to defeat the purpose of "simplification" by going with a single fund. In that case, the Bogle 3-4 fund portfolio with some tilts or adds might be a better option to keep costs down.
Vanguard LifeStrategy Moderate Growth Fund Investor Shares
MUTF: VSMGX
Image
Thanks
I think 'tilt' is a better term.
Comparing the VSMGX to the Bogle 3-4 fund portfolio will be a good exercise.

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mhadden1
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Location: North Alabama

Re: Lifestyle Strategies

Post by mhadden1 » Tue Jul 10, 2018 10:36 am

HickoryHill wrote:
Mon Jul 09, 2018 8:44 pm
All is invested in 20 very low-cost ETFs, many of which are Vanguard.
Far too many funds for me. I would shoot for three. One is ok if the right fund-of-funds fits your circumstances. Maybe four or five if you must tilt.
Oh I can't, can I? That's what they said to Thomas Edison, mighty inventor, Thomas Lindberg, mighty flyer,and Thomas Shefsky, mighty like a rose.

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vineviz
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Re: Lifestyle Strategies

Post by vineviz » Tue Jul 10, 2018 10:51 am

Sandtrap wrote:
Tue Jul 10, 2018 10:01 am
It seems counterproductive to add funds to VSMGX for "further diversification" given that it is a "fund of funds" already.
There would be the option to "tilt" perhaps by adding in Small Cap, Small Cap Value, International, etc etc etc, but doing even that would seem to defeat the purpose of "simplification" by going with a single fund.
In principle, it is definitely possible to add ""further diversification" to a fund of funds.

In this case, though, it turns out that there is virtually noting you could add in small quantities that would significantly impact the overall diversification and/or "tilt" of the portfolio. You'd have to add something north of 25% of an asset like small cap value or long duration treasuries to move the needle, and it's hard for me to imagine the benefit would outweigh the cost in terms of added complexity.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

Dottie57
Posts: 4666
Joined: Thu May 19, 2016 5:43 pm

Re: Lifestyle Strategies

Post by Dottie57 » Tue Jul 10, 2018 11:07 am

HickoryHill wrote:
Tue Jul 10, 2018 8:02 am
Dottie57 wrote:
Mon Jul 09, 2018 9:46 pm
OP,

I’ve done well using index funds , low cost and very diversified. Total stock(US), Total bond and Total International. I have all of the categories of stock ( large growth, large value, small growth, small value) in the total indexes.

I once had a slice and dice portfolio that did not work that well for me. I didn’t know quite how to rebalance.
Thank you.
I was in that position, also, and the advisor did accomplish this goal - with very low-cost funds/ETFs; so, I am pleased with this.
I'm trying to figure out if I can save my 1% advisor fee and get the total diversification with a Lifestyle Strategy Vanguard fund and feel comfortable having the entire portfolio in 1 or 2 funds.
I think you should let your advisor go. You are paying him too much to rebalance. And I do think one or two Lifestrategy funds would work just fine. Use two funds to set an exact allocation of stocks/bonds that you want. 20 ETFs is way too much - for me. Buying The Whole haystack will get you all of the subsets.

HickoryHill
Posts: 31
Joined: Fri Jul 06, 2018 7:52 am

Re: Lifestyle Strategies

Post by HickoryHill » Tue Jul 10, 2018 11:26 am

vineviz wrote:
Tue Jul 10, 2018 10:51 am
Sandtrap wrote:
Tue Jul 10, 2018 10:01 am
It seems counterproductive to add funds to VSMGX for "further diversification" given that it is a "fund of funds" already.
There would be the option to "tilt" perhaps by adding in Small Cap, Small Cap Value, International, etc etc etc, but doing even that would seem to defeat the purpose of "simplification" by going with a single fund.
In principle, it is definitely possible to add ""further diversification" to a fund of funds.

In this case, though, it turns out that there is virtually noting you could add in small quantities that would significantly impact the overall diversification and/or "tilt" of the portfolio. You'd have to add something north of 25% of an asset like small cap value or long duration treasuries to move the needle, and it's hard for me to imagine the benefit would outweigh the cost in terms of added complexity.
Excellent point with regard to the minimal effect of adding a fund or 2 to 'tilt' or further diversify when the vast majority of the portfolio would be already diversified with the Life Strategy fund.

HickoryHill
Posts: 31
Joined: Fri Jul 06, 2018 7:52 am

Re: Lifestyle Strategies

Post by HickoryHill » Tue Jul 10, 2018 11:29 am

Dottie57 wrote:
Tue Jul 10, 2018 11:07 am
HickoryHill wrote:
Tue Jul 10, 2018 8:02 am
Dottie57 wrote:
Mon Jul 09, 2018 9:46 pm
OP,

I’ve done well using index funds , low cost and very diversified. Total stock(US), Total bond and Total International. I have all of the categories of stock ( large growth, large value, small growth, small value) in the total indexes.

I once had a slice and dice portfolio that did not work that well for me. I didn’t know quite how to rebalance.
Thank you.
I was in that position, also, and the advisor did accomplish this goal - with very low-cost funds/ETFs; so, I am pleased with this.
I'm trying to figure out if I can save my 1% advisor fee and get the total diversification with a Lifestyle Strategy Vanguard fund and feel comfortable having the entire portfolio in 1 or 2 funds.
I think you should let your advisor go. You are paying him too much to rebalance. And I do think one or two Lifestrategy funds would work just fine. Use two funds to set an exact allocation of stocks/bonds that you want. 20 ETFs is way too much - for me. Buying The Whole haystack will get you all of the subsets.
Thanks a lot. The more feedback I get, and that feedback helps me clarify my thinking, the more convinced I am to let the advisor go and move to 1-4 Vanguard funds, one of which would be the Lifestrategy fund.

Dottie57
Posts: 4666
Joined: Thu May 19, 2016 5:43 pm

Re: Lifestyle Strategies

Post by Dottie57 » Tue Jul 10, 2018 12:13 pm

HickoryHill wrote:
Tue Jul 10, 2018 11:29 am
Dottie57 wrote:
Tue Jul 10, 2018 11:07 am
HickoryHill wrote:
Tue Jul 10, 2018 8:02 am
Dottie57 wrote:
Mon Jul 09, 2018 9:46 pm
OP,

I’ve done well using index funds , low cost and very diversified. Total stock(US), Total bond and Total International. I have all of the categories of stock ( large growth, large value, small growth, small value) in the total indexes.

I once had a slice and dice portfolio that did not work that well for me. I didn’t know quite how to rebalance.
Thank you.
I was in that position, also, and the advisor did accomplish this goal - with very low-cost funds/ETFs; so, I am pleased with this.
I'm trying to figure out if I can save my 1% advisor fee and get the total diversification with a Lifestyle Strategy Vanguard fund and feel comfortable having the entire portfolio in 1 or 2 funds.
I think you should let your advisor go. You are paying him too much to rebalance. And I do think one or two Lifestrategy funds would work just fine. Use two funds to set an exact allocation of stocks/bonds that you want. 20 ETFs is way too much - for me. Buying The Whole haystack will get you all of the subsets.
Thanks a lot. The more feedback I get, and that feedback helps me clarify my thinking, the more convinced I am to let the advisor go and move to 1-4 Vanguard funds, one of which would be the Lifestrategy fund.
Another note. When you have multiple funds you may have the same stock in more than one of them. Maybe too much. I prefer market weighting.

Lou354
Posts: 560
Joined: Sun Apr 03, 2016 10:51 pm

Re: Lifestyle Strategies

Post by Lou354 » Tue Jul 10, 2018 12:43 pm

An all-in-one fund like Lifestrategies is a great choice in a tax-advantaged account. It’s not so tax-efficient if held in a taxable account.

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Toons
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Re: Lifestyle Strategies

Post by Toons » Tue Jul 10, 2018 1:51 pm

HickoryHill wrote:
Tue Jul 10, 2018 7:57 am
Toons wrote:
Mon Jul 09, 2018 9:32 pm
Vanguard Life Strategy Fund
Great Idea...

I Currently hold monies in Lifestrategy Conservtive Growth Fund.
I glance it it a couple times a year.
It is simple and effective. :happy
Thank you. I think my question is whether site members feel comfortable with have very large portions of their portfolio in 1 or 2 accounts like Lifestyle Strategies.

Sure,,
It is a one fund solution.
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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Re: Lifestyle Strategies

Post by Jack FFR1846 » Tue Jul 10, 2018 2:08 pm

A 3 fund portfolio owns the whole market.

It will be cheaper and likely more diverse than 20 ETFs. I set myself up with 3 fund, using US Savings bonds as well, as I had these before becoming a Boglehead (actually, before there was this forum). My overall ER ignoring the savings bonds is about 0.04%. With the bonds, about 0.03%.
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GAAP
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Re: Lifestyle Strategies

Post by GAAP » Tue Jul 10, 2018 2:13 pm

If these are all low-cost ETFs, then the best bang for your buck is to drop the advisor -- nothing else will save you as much money.

Choosing whether or not to go to fewer funds is a different decision, followed by which funds do you need.

DesertDiva
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Re: Lifestyle Strategies

Post by DesertDiva » Tue Jul 10, 2018 2:19 pm

HickoryHill wrote:
Mon Jul 09, 2018 8:44 pm
I feel a bit uncomfortable with only 2,3 or 4 fundss/ETFs, even when each might be a fund of funds.
Read: https://www.amazon.com/Bogleheads-Guide ... 290&sr=1-1
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SimplicityNow
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Re: Lifestyle Strategies

Post by SimplicityNow » Tue Jul 10, 2018 3:37 pm

I'll just reinforce the already excellent advice you have received so far.

1) Keep it simple. Life Strategy or Target Date or the 3 Fund portfolio is all you really need.

2) You don't need the advisor.

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BL
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Re: LifeStrategy

Post by BL » Tue Jul 10, 2018 3:45 pm

How about changing the thread title to the correct name of the fund, LifeStrategy?
Each LifeStrategy Fund invests in four broadly diversified Vanguard funds and is subject to the risks associated with those underlying funds.
.
Last edited by BL on Tue Jul 10, 2018 6:04 pm, edited 1 time in total.

HickoryHill
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Re: Lifestyle Strategies

Post by HickoryHill » Tue Jul 10, 2018 3:54 pm

BL wrote:
Tue Jul 10, 2018 3:45 pm
How about changing the thread title to the correct name of the fund, LifeStrategy?
Each LifeStrategy Fund invests in four broadly diversified Vanguard funds and is subject to the risks associated with those underlying funds.
.
Sure. As soon as I figure out how to do that.

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BL
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Re: LifeStrategy

Post by BL » Tue Jul 10, 2018 6:07 pm

HickoryHill wrote:
Tue Jul 10, 2018 3:54 pm
BL wrote:
Tue Jul 10, 2018 3:45 pm
How about changing the thread title to the correct name of the fund, LifeStrategy?
Each LifeStrategy Fund invests in four broadly diversified Vanguard funds and is subject to the risks associated with those underlying funds.
.
Sure. As soon as I figure out how to do that.
I don't know quite how to change the first one, excepting clicking on the ! at top of post to get attention of Mods, but I just did an edit of my post title by clicking on the pencil edit button at top of my post. The title box was easy to change.

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Re: Lifestyle Strategies

Post by HickoryHill » Tue Jul 10, 2018 8:45 pm

GAAP wrote:
Tue Jul 10, 2018 2:13 pm
If these are all low-cost ETFs, then the best bang for your buck is to drop the advisor -- nothing else will save you as much money.

Choosing whether or not to go to fewer funds is a different decision, followed by which funds do you need.
Thanks

HickoryHill
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Re: Lifestyle Strategies

Post by HickoryHill » Tue Jul 10, 2018 8:47 pm

SimplicityNow wrote:
Tue Jul 10, 2018 3:37 pm
I'll just reinforce the already excellent advice you have received so far.

1) Keep it simple. Life Strategy or Target Date or the 3 Fund portfolio is all you really need.

2) You don't need the advisor.
Thank you

HickoryHill
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Re: Lifestyle Strategies

Post by HickoryHill » Tue Jul 10, 2018 8:48 pm

DesertDiva wrote:
Tue Jul 10, 2018 2:19 pm
HickoryHill wrote:
Mon Jul 09, 2018 8:44 pm
I feel a bit uncomfortable with only 2,3 or 4 fundss/ETFs, even when each might be a fund of funds.
Read: https://www.amazon.com/Bogleheads-Guide ... 290&sr=1-1
Thanks

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Re: [Considering the Vanguard LifeStrategy Fund]

Post by LadyGeek » Tue Jul 10, 2018 9:37 pm

Welcome! I retitled the thread for clarity.

The wiki has some background info: Vanguard LifeStrategy Funds

Also: Vanguard funds: life strategy funds vs target retirement funds

FYI - If you want to change the thread title further, just edit the Subject: line in Post #1.
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DDubya
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Re: [Considering the Vanguard LifeStrategy Fund]

Post by DDubya » Tue Jul 10, 2018 10:21 pm

In 2014, just prior to my retirement, the situation for DW and I wasn't too different from yours.
In our IRAs we had a slice and dice portfolio of 14 funds, all at Vanguard, not an adviser. My goal was to simplify and reduce risk. I did this by moving to a portfolio of Life Strategy Moderate Growth (VSMGX), Inflation Protected Securities (VAIPX), Real Estate (VGSLX) plus a ladder of brokered CDs.
This has accomplished our goals and gives us our desired allocation of roughly 50%/50% equity and bond. This was easy to accomplish and provides great peace of mind. I only review our IRAs quarterly and have done only a minor rebalance annually.
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HickoryHill
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Re: [Considering the Vanguard LifeStrategy Fund]

Post by HickoryHill » Tue Jul 10, 2018 10:24 pm

DDubya wrote:
Tue Jul 10, 2018 10:21 pm
In 2014, just prior to my retirement, the situation for DW and I wasn't too different from yours.
In our IRAs we had a slice and dice portfolio of 14 funds, all at Vanguard, not an adviser. My goal was to simplify and reduce risk. I did this by moving to a portfolio of Life Strategy Moderate Growth (VSMGX), Inflation Protected Securities (VAIPX), Real Estate (VGSLX) plus a ladder of brokered CDs.
This has accomplished our goals and gives us our desired allocation of roughly 50%/50% equity and bond. This was easy to accomplish and provides great peace of mind. I only review our IRAs quarterly and have done only a minor rebalance annually.
Thank you very much. I'm beginning to examine VSMGX in more detail to see if and how I might want to add some smaller positions in funds, as you describe.

jalbert
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Re: [Considering the Vanguard LifeStrategy Fund]

Post by jalbert » Tue Jul 10, 2018 11:56 pm

HickoryHill wrote:
Mon Jul 09, 2018 8:44 pm
I took on an advisor nearly a year ago, with 1% fee, and my goal was to get my investments as well diversified as possible. I finally came to the conclusion after many years of investing, mostly through an advisor, that Jack Bogle had it all right with complete diversification, weighted for age, goals, personal finances, etc.
The portfolio has been set up with a 60/40 ration, with diversification of US, foreign, emerging markets, and intermediate term corporate bonds.
All is invested in 20 very low-cost ETFs, many of which are Vanguard.
My question revolves around finding a lower-cost methodology for the portfolio by releasing the advisor and trading the 20 for even fewer ETFS, and am considering the Vanguard Life Strategy Fund (.13%) as the primary fund.
I am so used to thinking about diversifying with several funds/ETFs (e.g. VSMGX) that I feel a bit uncomfortable with only 2,3 or 4 fundss/ETFs, even when each might be a fund of funds.
Anyone have thoughts or experiences with this?
Thanks for any help you might give.
Diversification is not a property of how many mutual funds you own, but a property of the collection of all of the securities held by the funds in aggregate. VSMGX holds virtually every reasonably liquid stock in the world and virtually every investment grade nominal bond in the world. Despite being only a single fund, it is an extremely diversified portfolio, quite possibly more diversified than a 20-fund portfolio constructed by an advisor.
Risk is not a guarantor of return.

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Re: [Considering the Vanguard LifeStrategy Fund]

Post by HickoryHill » Wed Jul 11, 2018 6:58 am

jalbert wrote:
Tue Jul 10, 2018 11:56 pm
HickoryHill wrote:
Mon Jul 09, 2018 8:44 pm
I took on an advisor nearly a year ago, with 1% fee, and my goal was to get my investments as well diversified as possible. I finally came to the conclusion after many years of investing, mostly through an advisor, that Jack Bogle had it all right with complete diversification, weighted for age, goals, personal finances, etc.
The portfolio has been set up with a 60/40 ration, with diversification of US, foreign, emerging markets, and intermediate term corporate bonds.
All is invested in 20 very low-cost ETFs, many of which are Vanguard.
My question revolves around finding a lower-cost methodology for the portfolio by releasing the advisor and trading the 20 for even fewer ETFS, and am considering the Vanguard Life Strategy Fund (.13%) as the primary fund.
I am so used to thinking about diversifying with several funds/ETFs (e.g. VSMGX) that I feel a bit uncomfortable with only 2,3 or 4 fundss/ETFs, even when each might be a fund of funds.
Anyone have thoughts or experiences with this?
Thanks for any help you might give.
Diversification is not a property of how many mutual funds you own, but a property of the collection of all of the securities held by the funds in aggregate. VSMGX holds virtually every reasonably liquid stock in the world and virtually every investment grade nominal bond in the world. Despite being only a single fund, it is an extremely diversified portfolio, quite possibly more diversified than a 20-fund portfolio constructed by an advisor.
Thanks

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Re: Lifestyle Strategies

Post by David Jay » Wed Jul 11, 2018 7:35 am

HickoryHill wrote:
Tue Jul 10, 2018 7:53 am
There is probably not a lot of logic to that discomfort, other than the simple notion that having more positions might reduce the effect of a downturn;
The impact that a market downturn will have is primarily the ratio of stocks-to-bonds. That is why there are (4) LifeStrategy funds: 80/20, 60/40, 40/60 and 20/80. You can choose your own balance of growth versus volatility. LS Growth (80/20) could go down more than 30% if the market has a huge drop and goes down 40%. LS Income will likely go down less than 10% under the same conditions.
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Re: [Considering the Vanguard LifeStrategy Fund]

Post by John Z » Wed Jul 11, 2018 8:36 am

Not to add complexity to your decisions but give this link a read. Basically, a well balanced portfolio with an asset allocation that meets your age and risk level will be fine as long as you stick with it.

https://www.whitecoatinvestor.com/150-p ... han-yours/

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Re: [Considering the Vanguard LifeStrategy Fund]

Post by rixer » Wed Jul 11, 2018 8:51 am

I'm retired and other than an emergency 3 year CD ladder, I have everything in a Lifestrategy fund. It's globally diversified , it stays balanced and I take what the market gives me. It really helps take any emotional anxiety out of the process.
It works well for me.

smectym
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Re: [Considering the Vanguard LifeStrategy Fund]

Post by smectym » Wed Jul 11, 2018 9:14 am

We like LifeStrategy and are migrating assets to it from Schwab.
It’s fine to refer to LifeStrategy as a “one fund solution” but it’s not really—it’s a four fund solution, and you have to decide between 4 different allocations of those 4 funds. The investor needs to look under the hood and have a basic understanding of the moving parts (2 stock funds, one U.S.-centric and one international, a 2 analogously differentiated bond funds as well).
Sure, once you’ve settled on which particular allocation of the 4 funds suits your investing goals and risk tolerance, and you say, OK, I guess I’m going with, e.g., LifeStrategy Moderate Growth, then your specific 4-fund blend is assigned its own unique ticker symbol (in this case VSMGX) and you can think about that as “a one fund solution” if you prefer. But hey—you really have 4 funds.

Perhaps not a profound observation, but contrast with other balanced fund approaches, such as Vanguard Wellington or Wellesley, or the venerable Fidelity Puritan. These aren’t “funds of funds.” In such cases it’s perhaps more accurate to describe these as “one fund solutions.” Look under the hood of these funds and you’ll find different stocks and different bonds—but not a lot of other Vanguard or Fidelity funds or ETF’s.

Smectym

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