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Vanguard stock options

Discussion in 'Investments and Savings' started by LearnMS, Mar 19, 2017.

  1. LearnMS

    LearnMS Level 2 Member

    I have options to invest in Vanguard stocks through my HSA. Below are the options

    Vanguard 500 Index
    Vanguard Healthcare
    Vanguard Life Strategy Growth
    Vanguard Life Strategy Conservative Growth
    Vanguard Life Strategy Moderate Growth
    Vanguard Mid-cap Index
    Vanguard Small-cap Index
    Vanguard Total Stock Market

    So far, I tried 500 index, small-cap and total stock market. I am eyeing on Conservative growth this time...Checking to see which options to choose? I am planning to select once and forget about it forever....
     
  2. chalkitup

    chalkitup Level 2 Member

    TSM. Set it and forget it.

    Code:
    https://www.bogleheads.org/wiki/Getting_started
     
  3. volker

    volker Level 2 Member

    I would look into the Life Strategy funds since they are a mix of different index funds and bonds that get automatically balanced. The different between Life Strategy funds and target retirement fund is only that the asset allocation doesn't change over time.

    If you check the funds details on Vanguard you will find the asset allocation of the specific Life Strategy fund.
     
  4. LearnMS

    LearnMS Level 2 Member

    Great, thank you. I will have a quick look. I will probably do 50% life strategy and 50% 500 index fund or TSM.
     
  5. Matt

    Matt Administrator Staff Member

    You don't set and forget TSM. That ignores the benefits of diversification and modern portfolio theory concepts. Bogleheads shouldn't recommend that either, they more likely would recommend a 3-4 fund portfolio.
     
  6. Matt

    Matt Administrator Staff Member

    Note that you started out suggesting the most conservative life cycle fund, then ended up adding 50% of 100% equity to it.

    This is not a set it and forget it strategy, but still manageable if you want to do this, you'd just need to pop in periodically to sell some of one or the other.

    I'd suggest taking a look at the underlying fund for Lifecycle, if you are ready for 50% equity plus conservative maybe look at just the Growth fund:

    https://personal.vanguard.com/us/funds/snapshot?FundIntExt=INT&FundId=0122

    Scroll to the bottom, add up International and Domestic stock to get your split, this is 80/20 and more aggressive than anything I would recommend at the moment for most people (barring very high risk tolerance and strong income).
     
  7. Josh F

    Josh F Level 2 Member Charity Forum Mod

    If you could let me know what date the market will correct itself, that would be super...
     
  8. LearnMS

    LearnMS Level 2 Member

    Thanks. Growth fund is a good suggestion. Could be 50% LS growth and 50% 500 index.
     
  9. Lawrence

    Lawrence Level 2 Member

    Your asset allocation strategy should really be taken into consideration with respect to all of your investments (401k, IRA, taxable brokerage, etc.). I say this just because a goal should be to minimize expense ratios overall. So let's say (for instance) the only low ER fund in your 401k plan is a S&P 500 fund. You would throw as much as possible toward that, and use your other accounts with lower ER options to balance out your overall portfolio to a allocation of your liking.

    Given ever lowering expense ratios, this exercise is of decreasing utility.
     
  10. Matt

    Matt Administrator Staff Member

    Hmm.. I was trying to reduce your risk, and you just took it up to the highest it's been in the thread....
     
  11. Matt

    Matt Administrator Staff Member

    Agreed, but that does conflict with the notion of keeping it simply/set it forget it. 401(k) plans often have terrible investment options, which aren't keeping up with the race to the bottom on fees.
     
  12. Josh F

    Josh F Level 2 Member Charity Forum Mod

    Looks like both of those funds are 80/20, which overall is a decent allocation ratio IMO for existing funds.... However, I wouldn't be rushing out to put new funds in at that ratio...
     
  13. LearnMS

    LearnMS Level 2 Member

    Right now, my elections are 75% S&P 500, 20% mid-cap and 5% TSM. I wanted to change the allocation to one of the LS we discussed above.
     
  14. Matt

    Matt Administrator Staff Member

    Personally, I think the Growth alone has a lot of equity exposure, adding in 50% on top of pure equity is a lot.

    Think of it like a pint of Vodka and Orange, then pouring out half of it, and adding half a pint of Vodka to make it a pint again... going feel great for a while, but it's going to hurt in the morning :)
     
  15. If you want one fund to set it and forget it, I would go with either TSM or LS Growth (80/20). As Matt points out, you can do both and get a "lifestrategy ultra-growth" that ends up being 90/10, which, honestly, would also be fine.

    I actually do something similar in my own portfolio, in my IRA I hold the Vanguard 500 and in my solo 401(k) I hold LS Growth. That's because I think-but-don't-know that US stocks will outperform a balanced portfolio of stocks and bonds over the next 30 years. If they do the Vanguard 500 will outperform the LS Growth and I'll feel a little bit sad for my lost gains. But if they don't I'll be glad I had exposure to a balanced portfolio of stocks and bonds! But I don't "rebalance" them or anything, they're two separate bets on two separate outcomes 30 years from now, one of which I have high confidence in and one of which I have low confidence in.
     
  16. LearnMS

    LearnMS Level 2 Member

    Nice analogy there :)

    That's why I started with LS Conservative as an option too. I haven't changed my elections yet....I never dabbled with LS options before, so was curious.
     
  17. LearnMS

    LearnMS Level 2 Member

    Interesting take. Only if we can predict what would happen 30 years from now :). This is all good discussion!
     
  18. seespotjump

    seespotjump Level 2 Member

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