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If the market is efficient, then the correct investment is market weighted. You are missing the rest of the world and smaller stocks. This implies that you ar

by artsrc 14y ago

If the market is efficient, then the correct investment is market weighted. You are missing the rest of the world and smaller stocks. This implies that you are missing some diversification that would reduce your risk.

saryant 14y ago
That's why I follow the basic three-fund portfolio advocated by contemporaries of John Bogle, founder of Vanguard: VTSMX, total US stock market, VTIAX, total international stock market and VBTLX, total bond market index. Three basic index funds each with very, very low fees compared to actively-managed funds. I'm at 60/30/10% respectively in those funds.
- Evbn 14y ago
  Or roll them into an auto adjusting target retirement 20XX fund
  - saryant 14y ago
    I would if my 401k included one that wasn't terrible. I do use one of those funds for my Roth IRA though, I just wanted to limit my post to the principle, not the implementation.