1/N Heuristic
Finally got off my lazy arse to implement our new plan. It is currently "1/N Heuristic" which is just the fancy academic term for dividing your assets equally into specific investment funds. Others would call this the "couch potato" or "lazy man's" portofolio.
Domestic
VTSMX Total Stock Market (Wilshire 5000) 14.3%
VFINX S&P 500 Index 14.3%
VEXMX Extended Market Index (Wilshire 4500 Mid-/Small-Cap) 14.3%
VISGX Small-Cap Growth Index (S&P Small-Cap 600/Barra Growth) 14.3%
Foreign
VEIEX Emerging Markets Stock Index (MSCI-EMG Free) 14.3%
VEURX European Stock Index MSCI-EUR 14.3%
Fixed Income
VIPSX TIPS: Inflation-Protected Securities 14.3%
------ ----
Total 100%
The long term plan is to further diversify by adding VISVX (S&P Small-Cap 600/Barra Value), VPACX (Pacific Stock Index MSCI-PAC), VWEHX (High-Yield Corporate Bonds), and VUSTX (Long-Term Treasury Bonds) and then optimize to arrive at something like this,
Domestic
VTSMX Total Stock Market (Wilshire 5000) 5%
VFINX S&P 500 Index 15%
VEXMX Extended Market Index (Wilshire 4500 Mid-/Small-Cap) 10%
VISGX Small-Cap Growth Index (S&P Small-Cap 600/Barra Growth) 5%
VISVX S&P Small-Cap 600/Barra Value 5%
Foreign
VEIEX Emerging Markets MSCI-EMG Free 15%
VPACX Pacific Stock Index MSCI-PAC 5%
VEURX European Stock Index MSCI-EUR 10%
Fixed Income
VIPSX TIPS: Inflation-Protected Securities 10%
VWEHX High-Yield Corporate Bonds 10%
VUSTX Long-Term Treasury Bonds 10%
------ ----
Total 100%
I have a penchant for Vanguard funds based on their no load funds & low costs. While ETFs are "hot" these days, our personal strategy is to dollar cost average which offsets the benefits of ETFs.
Disclaimer: The above is not intended as advice to anyone. Everyone has their own unique circumstances, biases, etc. But I really would like to exchange investment views from other people. And if you have been putting off your own plan (like I did for a long time), I hope this gives you a bit of a nudge. That is why I posted this. No, it wasn't for self adulation or to make myself feel smart.
Domestic
VTSMX Total Stock Market (Wilshire 5000) 14.3%
VFINX S&P 500 Index 14.3%
VEXMX Extended Market Index (Wilshire 4500 Mid-/Small-Cap) 14.3%
VISGX Small-Cap Growth Index (S&P Small-Cap 600/Barra Growth) 14.3%
Foreign
VEIEX Emerging Markets Stock Index (MSCI-EMG Free) 14.3%
VEURX European Stock Index MSCI-EUR 14.3%
Fixed Income
VIPSX TIPS: Inflation-Protected Securities 14.3%
------ ----
Total 100%
The long term plan is to further diversify by adding VISVX (S&P Small-Cap 600/Barra Value), VPACX (Pacific Stock Index MSCI-PAC), VWEHX (High-Yield Corporate Bonds), and VUSTX (Long-Term Treasury Bonds) and then optimize to arrive at something like this,
Domestic
VTSMX Total Stock Market (Wilshire 5000) 5%
VFINX S&P 500 Index 15%
VEXMX Extended Market Index (Wilshire 4500 Mid-/Small-Cap) 10%
VISGX Small-Cap Growth Index (S&P Small-Cap 600/Barra Growth) 5%
VISVX S&P Small-Cap 600/Barra Value 5%
Foreign
VEIEX Emerging Markets MSCI-EMG Free 15%
VPACX Pacific Stock Index MSCI-PAC 5%
VEURX European Stock Index MSCI-EUR 10%
Fixed Income
VIPSX TIPS: Inflation-Protected Securities 10%
VWEHX High-Yield Corporate Bonds 10%
VUSTX Long-Term Treasury Bonds 10%
------ ----
Total 100%
I have a penchant for Vanguard funds based on their no load funds & low costs. While ETFs are "hot" these days, our personal strategy is to dollar cost average which offsets the benefits of ETFs.
Disclaimer: The above is not intended as advice to anyone. Everyone has their own unique circumstances, biases, etc. But I really would like to exchange investment views from other people. And if you have been putting off your own plan (like I did for a long time), I hope this gives you a bit of a nudge. That is why I posted this. No, it wasn't for self adulation or to make myself feel smart.
posted by baconandeggs at 4:15 PM
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