@ptilda wrote:Everything I read says it's important to diversify, but then warns (often) about over-diversification.
I'm pretty new at this game. I'd appreciate hearing the experience and options of others... as well as reasons, for investing in various ways.
Thanks!
easiest way imo is doing an 3 fund portfolio or target retirement fund. For my Roth Ira i am using an target retirement fund that consists of total us stock, total international stock, total us bond , and total international bond. All you really have to worry about is to pick your asset allocation, and away you go.
For my taxable account i use an basic 3 fund portfolio that consists of Total Us stock, Total international stock , and Muni bonds. I rebalance once an year to keep my asset allocation in check.
I know its not for everybody but its easy for me to keep track of and i don't really have to do anything .
@wa3more wrote:Mongstra,
good advice. Low maintenance and over the long term 10 + years, you will outperform 90% of the actively managed funds
Right now, I would probably be lighter on bonds and heavier internationally. International is a bargain compared to US and if rates go up, bonds will under perform. Like you said rebalance annual.
But people like to take what should be a simple process and create all these elaborate investing schemes.
i
@wa3more wrote:Mongstra,
good advice. Low maintenance and over the long term 10 + years, you will outperform 90% of the actively managed funds
Right now, I would probably be lighter on bonds and heavier internationally. International is a bargain compared to US and if rates go up, bonds will under perform. Like you said rebalance annual.
But people like to take what should be a simple process and create all these elaborate investing schemes.
i am at like 5% in muni, 35% in International and 60% in domestic . An little bit on the risky side, but i am really far behind what i should be with retiremement portfolio. As far as roth goes i think i am going for 2060 TR fund thats 63 domestic 27% international , 8% us bond 2% international bonds.
For me its an lot easier , put money in and forget about it
I do like the fact that I can leave all the "hard" work to Fidelity. I have mine a bit unbalanced as well, partially because of the fantastic SPO at my job and the fact that I'm just starting out and don't have a lot of ability yet to move things around:
65% - domestic
10% - short-term
10% - foreign
5% - silver
10% - bonds
(roughly)
Hoping I'm doing it right! 
@ptilda wrote:I do like the fact that I can leave all the "hard" work to Fidelity. I have mine a bit unbalanced as well, partially because of the fantastic SPO at my job and the fact that I'm just starting out and don't have a lot of ability yet to move things around:
65% - domestic10% - short-term
10% - foreign
5% - silver
10% - bonds
(roughly)
Hoping I'm doing it right!
The one thing i would look at is the expense ratios that is the most important thing imo. I know fidelity has some TR funds that aren't bad but have high expense ratios. They do have an really good 4 in 1 mutual fund that 80-20 i think stock-bond, also has low expense ratio at about .20% give or take.
@wa3more wrote:Warren Buffett is a big fan of concentrated portfolios, owning the best 5 or 10 stocks, the ones that you know the most about. He says you can't take a whole bunch of girls to a dance and expect to get to know any one of them very well. Also, diversification is insurance against ignorance.
Rothchild used to say.. put all your eggs in one basket and watch that basket closely.
The main point is to know what what own or understand what you are investing in. That's why for 9 out of 10 people, index funds are the way to go. But people watch Cramer of listen some guy on CNBC and think they can pick their own stocks and beat the market. Then they lose their shirt.
This is my reasoning on why i prefer index funds. If an large majority of fund managers can't beat index funds, what chances do i have picking individual stocks.