Vanguard balanced funds
Vanguard balanced funds
My wife wants to invest her Roth IRA in a 1 or 2 funds portfolio. She doesn't like the high percentage of the international stocks in the TDFs and the international bonds. She is thinking to add international index fund to VBIAX. She is 39 years old. Any recommendations? Thanks.
- arcticpineapplecorp.
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Re: Vanguard balanced funds
what percentage of international is she looking to add (out of her total stock allocation)?
what overall allocation is she looking for?
The balanced index is 60% stock and 40% bond which could be high percentage of bond for a 39 year old (or not depending on other factors not mentioned like her risk tolerance, need to take risk, ability to take risk and so on).
Adding international stock to the mix will then decrease the amount in bonds, but she'll have to rebalance periodically between the two funds as her stock/bond allocation becomes different than she originally intended. And she may want a different risk amount as she gets older, in which case she'll have to rebalance out of stocks and into bonds as well.
is she aware of those additional steps she'll have to take and how to figure her overall stock/bond allocation among the two funds both now and into the future?
otherwise, nothing wrong with this, she just needs to understand how to build her allocation of stocks/bonds and US/International between the two funds.
what overall allocation is she looking for?
The balanced index is 60% stock and 40% bond which could be high percentage of bond for a 39 year old (or not depending on other factors not mentioned like her risk tolerance, need to take risk, ability to take risk and so on).
Adding international stock to the mix will then decrease the amount in bonds, but she'll have to rebalance periodically between the two funds as her stock/bond allocation becomes different than she originally intended. And she may want a different risk amount as she gets older, in which case she'll have to rebalance out of stocks and into bonds as well.
is she aware of those additional steps she'll have to take and how to figure her overall stock/bond allocation among the two funds both now and into the future?
otherwise, nothing wrong with this, she just needs to understand how to build her allocation of stocks/bonds and US/International between the two funds.
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions |
- ruralavalon
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Re: Vanguard balanced funds
What percentage of stocks in international stocks does she wish to have?Mario2222 wrote: ↑Sat Sep 12, 2020 10:36 am My wife wants to invest her Roth IRA in a 1 or 2 funds portfolio. She doesn't like the high percentage of the international stocks in the TDFs and the international bonds. She is thinking to add international index fund to VBIAX. She is 39 years old. Any recommendations? Thanks.
A three-fund portfolio might be easier to manage.
"Everything should be as simple as it is, but not simpler." - Albert Einstein |
Wiki article link: Bogleheads® investment philosophy
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Re: Vanguard balanced funds
I wish Vanguard offered a set of balanced funds that allowed a choice between various percentages of international in the stock portion. The current funds have a market weight split, which is about 55/45 between US and international. I wish they would also open a fund with a 70/30 split and one with an 80/20 split.
- ruralavalon
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Re: Vanguard balanced funds
I also want them to create a balanced fund especially for meUpperNwGuy wrote: ↑Sat Sep 12, 2020 11:39 am I wish Vanguard offered a set of balanced funds that allowed a choice between various percentages of international in the stock portion. The current funds have a market weight split, which is about 55/45 between US and international. I wish they would also open a fund with a 70/30 split and one with an 80/20 split.
"Everything should be as simple as it is, but not simpler." - Albert Einstein |
Wiki article link: Bogleheads® investment philosophy
Re: Vanguard balanced funds
Nothing wrong at all with what she is thinking. I recommend she just does it.Mario2222 wrote: ↑Sat Sep 12, 2020 10:36 am My wife wants to invest her Roth IRA in a 1 or 2 funds portfolio. She doesn't like the high percentage of the international stocks in the TDFs and the international bonds. She is thinking to add international index fund to VBIAX. She is 39 years old. Any recommendations? Thanks.
Basically, there are an infinite number of ways to put index funds together and most of them will be similar enough that one will not be able to predict which one will end up doing better (whatever "better" means) in the near-, intermediate-, nor long-term.
Re: Vanguard balanced funds
The Vanguard Target Date and LifeStrategy funds all use a fixed ratio of 40% of equities and 30% of fixed income in international.UpperNwGuy wrote: ↑Sat Sep 12, 2020 11:39 am I wish Vanguard offered a set of balanced funds that allowed a choice between various percentages of international in the stock portion. The current funds have a market weight split, which is about 55/45 between US and international. I wish they would also open a fund with a 70/30 split and one with an 80/20 split.
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Re: Vanguard balanced funds
The Vanguard Balanced Index fund is 60/40 US total stock market index and 40% US bond index.
The Vanguard Total World Index is 60% US total stock index and 40% total international stock index.
A 50-50 investment in the 2 funds yields a very low fee 60% US stock index, 20% US bond index, 20% total international stock index mix.
Obviously, you can play with the relative percentages of the 2 funds to achieve different mixes. For example, a 60-40 ratio of Balanced to Total World Indexes yields an overall:
60% US Total Stock Index
24% Total US Bond Index
16% Total International Stock Index.
Perhaps you can use these two funds to find an overall ratio of components that suits risk tolerance and objectives with low fees and very broad coverage.
Best wishes.
The Vanguard Total World Index is 60% US total stock index and 40% total international stock index.
A 50-50 investment in the 2 funds yields a very low fee 60% US stock index, 20% US bond index, 20% total international stock index mix.
Obviously, you can play with the relative percentages of the 2 funds to achieve different mixes. For example, a 60-40 ratio of Balanced to Total World Indexes yields an overall:
60% US Total Stock Index
24% Total US Bond Index
16% Total International Stock Index.
Perhaps you can use these two funds to find an overall ratio of components that suits risk tolerance and objectives with low fees and very broad coverage.
Best wishes.
Re: Vanguard balanced funds
She wants no more than 20% in international stocks. She likes the 80/20 allocation.
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Re: Vanguard balanced funds
That's my point. I wish Vanguard provided other choices than just market weight (Total World) or 40% (Target Date, Life Strategy). I'd like to see them offer a US/ex-US blended fund that is 33%, 30%, 25%, or 20% international in addition to what they offer now. I'd settle for even one or two of those possibilities. (I'm only discussing equities. Not sure why you mentioned fixed income.)ruud wrote: ↑Sat Sep 12, 2020 12:24 pmThe Vanguard Target Date and LifeStrategy funds all use a fixed ratio of 40% of equities and 30% of fixed income in international.UpperNwGuy wrote: ↑Sat Sep 12, 2020 11:39 am I wish Vanguard offered a set of balanced funds that allowed a choice between various percentages of international in the stock portion. The current funds have a market weight split, which is about 55/45 between US and international. I wish they would also open a fund with a 70/30 split and one with an 80/20 split.
Last edited by UpperNwGuy on Sat Sep 12, 2020 2:08 pm, edited 1 time in total.
- arcticpineapplecorp.
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Re: Vanguard balanced funds
sounds like beehave's suggestion for "A 50-50 investment in the 2 funds (total world stock index fund and balanced index fund) yields a very low fee 60% US stock index, 20% US bond index, 20% total international stock index mix" accomplishes your goal.
(technically, unless my math is off, doing the above, she'd have 26.875% international of her total stock portion (not 20%) because US makes up 57% of total world, source: https://investor.vanguard.com/mutual-fu ... olio/vtwax). But that's close enough without making this more complicated than it needs to be.
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions |
Re: Vanguard balanced funds
Build your own with vanguard funds at m1.UpperNwGuy wrote: ↑Sat Sep 12, 2020 11:39 am I wish Vanguard offered a set of balanced funds that allowed a choice between various percentages of international in the stock portion. The current funds have a market weight split, which is about 55/45 between US and international. I wish they would also open a fund with a 70/30 split and one with an 80/20 split.
1 fund
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Re: Vanguard balanced funds
While it may not be a 3 fund play, why not build your own portfolio based on several Vanguard (or other) index funds.
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Re: Vanguard balanced funds
If someone is sophisticated(?) enough to not want Vanguards' recommended percentage of this or that, then they are sophisticated enough to invest in multiple funds.Mario2222 wrote: ↑Sat Sep 12, 2020 10:36 am My wife wants to invest her Roth IRA in a 1 or 2 funds portfolio. She doesn't like the high percentage of the international stocks in the TDFs and the international bonds. She is thinking to add international index fund to VBIAX. She is 39 years old. Any recommendations? Thanks.
Re: Vanguard balanced funds
FFNOX (Fidelity Four in One)Mario2222 wrote: ↑Sat Sep 12, 2020 10:36 am My wife wants to invest her Roth IRA in a 1 or 2 funds portfolio. She doesn't like the high percentage of the international stocks in the TDFs and the international bonds. She is thinking to add international index fund to VBIAX. She is 39 years old. Any recommendations? Thanks.
60% US Equities
25% International Equities (ex Emerging)
15% US Bonds
Aggressive enough, yet does not have International Bonds and Emerging Equities. It re-balances itself and has 0.11 Expense Ratio.
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Re: Vanguard balanced funds
I think the first fund you reference is VBIAX. What is the second fund. Is the second one - VTWSX ?Beehave wrote: ↑Sat Sep 12, 2020 12:36 pm The Vanguard Balanced Index fund is 60/40 US total stock market index and 40% US bond index.
The Vanguard Total World Index is 60% US total stock index and 40% total international stock index.
A 50-50 investment in the 2 funds yields a very low fee 60% US stock index, 20% US bond index, 20% total international stock index mix.
Obviously, you can play with the relative percentages of the 2 funds to achieve different mixes. For example, a 60-40 ratio of Balanced to Total World Indexes yields an overall:
60% US Total Stock Index
24% Total US Bond Index
16% Total International Stock Index.
Perhaps you can use these two funds to find an overall ratio of components that suits risk tolerance and objectives with low fees and very broad coverage.
Best wishes.
Re: Vanguard balanced funds
It's VTWAX which is the "Admirial" share class. https://investor.vanguard.com/mutual-fu ... view/vtwaxsaagar_is_cool wrote: ↑Sun Sep 13, 2020 3:36 pmI think the first fund you reference is VBIAX. What is the second fund. Is the second one - VTWSX ?Beehave wrote: ↑Sat Sep 12, 2020 12:36 pm The Vanguard Balanced Index fund is 60/40 US total stock market index and 40% US bond index.
The Vanguard Total World Index is 60% US total stock index and 40% total international stock index.
A 50-50 investment in the 2 funds yields a very low fee 60% US stock index, 20% US bond index, 20% total international stock index mix.
Obviously, you can play with the relative percentages of the 2 funds to achieve different mixes. For example, a 60-40 ratio of Balanced to Total World Indexes yields an overall:
60% US Total Stock Index
24% Total US Bond Index
16% Total International Stock Index.
Perhaps you can use these two funds to find an overall ratio of components that suits risk tolerance and objectives with low fees and very broad coverage.
Best wishes.
VTWSX is the "Investor" share class of the same fund but is now closed to investors (back in 2018, Vanguard lowered the minimum purchase amount for Admiral shares to match that of Investor, and closed the Investor class)
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Re: Vanguard balanced funds
Vanguard's Wellington fund is 65% stock and 35% bonds, all U.S. That could fit the bill nicely.
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Re: Vanguard balanced funds
I think the Balanced Index fund is an excellent choice. Jack Bogle has written in many of his books that this one fund would serve the needs of most investors.Mario2222 wrote: ↑Sat Sep 12, 2020 10:36 am My wife wants to invest her Roth IRA in a 1 or 2 funds portfolio. She doesn't like the high percentage of the international stocks in the TDFs and the international bonds. She is thinking to add international index fund to VBIAX. She is 39 years old. Any recommendations? Thanks.
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Vanguard balanced funds
That is a good active fund.willthrill81 wrote: ↑Sun Sep 13, 2020 4:23 pm Vanguard's Wellington fund is 65% stock and 35% bonds, all U.S. That could fit the bill nicely.
John C. Bogle: “Simplicity is the master key to financial success."
Re: Vanguard balanced funds
If someone thinks they can create a better allocation than Vanguard, why not... just... do... it?
Just pick separate funds and keep contributing at the fixed percentages one desires.
An automatic contribution can be setup to contribute different percentages to different funds.
Just pick separate funds and keep contributing at the fixed percentages one desires.
An automatic contribution can be setup to contribute different percentages to different funds.
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Re: Vanguard balanced funds
I build my own with Vanguard funds at Vanguard.dru808 wrote: ↑Sat Sep 12, 2020 8:03 pmBuild your own with vanguard funds at m1.UpperNwGuy wrote: ↑Sat Sep 12, 2020 11:39 am I wish Vanguard offered a set of balanced funds that allowed a choice between various percentages of international in the stock portion. The current funds have a market weight split, which is about 55/45 between US and international. I wish they would also open a fund with a 70/30 split and one with an 80/20 split.
Re: Vanguard balanced funds
Sure, but you wish they offered a way to set your us/int allocations. M1 allows you to do this with the click of a button and not have to monitor your allocation. I’d say, “you don’t do that at vanguard”UpperNwGuy wrote: ↑Sun Sep 13, 2020 8:28 pmI build my own with Vanguard funds at Vanguard.dru808 wrote: ↑Sat Sep 12, 2020 8:03 pmBuild your own with vanguard funds at m1.UpperNwGuy wrote: ↑Sat Sep 12, 2020 11:39 am I wish Vanguard offered a set of balanced funds that allowed a choice between various percentages of international in the stock portion. The current funds have a market weight split, which is about 55/45 between US and international. I wish they would also open a fund with a 70/30 split and one with an 80/20 split.
1 fund
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Re: Vanguard balanced funds
I have accounts at three brokerages already. I don't need a fourth, so no M1 for me. And, to be honest, I don't care that much about this issue to take any action.dru808 wrote: ↑Sun Sep 13, 2020 8:40 pmSure, but you wish they offered a way to set your us/int allocations. M1 allows you to do this with the click of a button and not have to monitor your allocation. I’d say, “you don’t do that at vanguard”UpperNwGuy wrote: ↑Sun Sep 13, 2020 8:28 pmI build my own with Vanguard funds at Vanguard.dru808 wrote: ↑Sat Sep 12, 2020 8:03 pmBuild your own with vanguard funds at m1.UpperNwGuy wrote: ↑Sat Sep 12, 2020 11:39 am I wish Vanguard offered a set of balanced funds that allowed a choice between various percentages of international in the stock portion. The current funds have a market weight split, which is about 55/45 between US and international. I wish they would also open a fund with a 70/30 split and one with an 80/20 split.
- arcticpineapplecorp.
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Re: Vanguard balanced funds
that's interesting. wasn't aware of that one. thanks.Imbros wrote: ↑Sun Sep 13, 2020 8:34 amFFNOX (Fidelity Four in One)Mario2222 wrote: ↑Sat Sep 12, 2020 10:36 am My wife wants to invest her Roth IRA in a 1 or 2 funds portfolio. She doesn't like the high percentage of the international stocks in the TDFs and the international bonds. She is thinking to add international index fund to VBIAX. She is 39 years old. Any recommendations? Thanks.
60% US Equities
25% International Equities (ex Emerging)
15% US Bonds
Aggressive enough, yet does not have International Bonds and Emerging Equities. It re-balances itself and has 0.11 Expense Ratio.
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions |
Re: Vanguard balanced funds
If an investor isn’t “sophisticated“ enough to understand the value of diversification, I’d argue that investing in multiple funds will likely do more harm than good.tibbitts wrote: ↑Sun Sep 13, 2020 8:29 amIf someone is sophisticated(?) enough to not want Vanguards' recommended percentage of this or that, then they are sophisticated enough to invest in multiple funds.Mario2222 wrote: ↑Sat Sep 12, 2020 10:36 am My wife wants to invest her Roth IRA in a 1 or 2 funds portfolio. She doesn't like the high percentage of the international stocks in the TDFs and the international bonds. She is thinking to add international index fund to VBIAX. She is 39 years old. Any recommendations? Thanks.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
Re: Vanguard balanced funds
Oops, sorry, I misread your post and missed the part about "I wish".UpperNwGuy wrote: ↑Sat Sep 12, 2020 2:06 pmThat's my point. I wish Vanguard provided other choices than just market weight (Total World) or 40% (Target Date, Life Strategy).
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