This is my current investment portfolio all in vangaurd index funds.
85.2% in stocks (77% US, 23% International)
14.8% in bonds
Am I being too aggressive? Should I increase my bonds percentage? Also
am I too exposed to international market? Also is there something that
exposes me to Canada because right now I have 0% in canada. I am 31.
Thanks and happy investing
Only you can know the answer to this question. There is no one single
answer for everyone.
That's fine. Typical, even conservative at your age. It ultimately
on your personal level of risk tolerance. If you don't mind watching
stuff go up and down in the short run, you have plenty of time before
you need to be more conservative. As long as you're in broad indexes,
> This is my current investment portfolio all in vangaurd index funds.
> 85.2% in stocks (77% US, 23% International)
> 14.8% in bonds
> Am I being too aggressive? Should I increase my bonds percentage? Also
We're going to need a hell of a lot more information
to make even the most vague guess as to whether that's
sensible or not. Current savings, years planned until
retirement (or other goals for the money), income, etc.
Assuming you have *everything* else in order (ie. no
credit card debt, emergency funds in place, savings
set aside for other things (ie. house, car, etc) and
that this is *only* very-long-term retirement money
which you aren't planning on touching until you are
65 (you said you're 31, right?) then, it may in
fact be *under* aggressive. With a 34 year time
horizon, for this particular batch of money, you
may not need *any* bonds.
See, for example, the asset allocation used by
Vanguard themselves in their target-retirement
funds. Vanguard's 2040 retirement plan (33 years
from now) has only 10% in bonds.
(Look up VFORX on, say, finance.yahoo.com)
T.Rowe's 2040 fund has 7.23% in bonds and 4.25% in
Fido's 2040 has 11.8% in bonds, 3.5% in cash
But, again, your question is kind of without enough
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Are you posting responses that are easy for others to follow?
I don't see a need to focus specifically on Canada, and yes you are in
Canada. If you're in the broad U.S. stock market, lots of companies do
business in Canada, so their results will be affected by the
of Canada in it's proportion. Your stocks could all be in VIPERs and
international index and be done, unless you know that some aspect of
the market is going to do better than another... (good luck)...
> With a 34 year time horizon, for this particular
> batch of money, you may not need *any* bonds.
I respectfully differ. A 85/15 mix for a 31 year old investor will reduce
volatility and make it easier to him to invest over the long haul without
panicking if equities hit a rough stretch. As they say on the Street, you
make money in stocks, but you keep it in bonds. Sure, the long term return
on an 85/15 portfolio will be a little less than going 100 percent
equities. But the reduction in volatility is worth it in my view.
> Vanguard's 2040 retirement plan has only 10% in bonds.
> T. Rowe's 2040 fund has 7.23% in bonds, 4.25% in cash.
> Fido's 2040 has 11.8% in bonds, 3.5% in cash.
So the original poster's 85/15 allocation is reasonably close to what the
pros are doing. That should reassure him.
The original poster also asked if having 23 percent of his equity money
invested in international stocks was overly aggressive. I don't think so.
Most of the model asset allocations out there suggest having 20-30 percent
of your equity money invested in international names. As for targeting
Canada specifically, I don't think that's necessary. Canadian equities are
probably well correlated to U.S. issues, so you add complexity without
All in all, the original poster is doing just fine. Just remember to save
as much as possible.