Vanguard stock options

LearnMS

Level 2 Member
#1
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....
 

volker

Level 2 Member
#3
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.
 

LearnMS

Level 2 Member
#4
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.
Great, thank you. I will have a quick look. I will probably do 50% life strategy and 50% 500 index fund or TSM.
 

Matt

Administrator
Staff member
#5
TSM. Set it and forget it.

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

Matt

Administrator
Staff member
#6
Great, thank you. I will have a quick look. I will probably do 50% life strategy and 50% 500 index fund or TSM.
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).
 

Josh F

Level 2 Member
Charity Forum Mod
#7
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).
If you could let me know what date the market will correct itself, that would be super...
 

LearnMS

Level 2 Member
#8
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).
Thanks. Growth fund is a good suggestion. Could be 50% LS growth and 50% 500 index.
 

Lawrence

Level 2 Member
#9
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.
 

Matt

Administrator
Staff member
#11
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.
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.
 

Josh F

Level 2 Member
Charity Forum Mod
#12
Hmm.. I was trying to reduce your risk, and you just took it up to the highest it's been in the thread....
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...
 

Matt

Administrator
Staff member
#14
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.
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.
 

LearnMS

Level 2 Member
#16
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 :)
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.
 

LearnMS

Level 2 Member
#17
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.
Interesting take. Only if we can predict what would happen 30 years from now :). This is all good discussion!
 
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