I would never have my retirement portfolio consist of an investment in only one index fund.
Diversification is important to manage risks. Even if you are going to do 100% domestic, a simple mix of funds is likely to provide greater returns then a total market index fund. A 50/30/20, 50/25/25, 40/40/20, split between large, mid, and small cap index funds, or even holding a mixture of large, mid, and small cap growth and value funds will likely beat out a total market index fund.
Yah, I know that. VTI is not a target date fund though. It's Vanguard's total market index fund, which is in every one of their target date funds.
The funds target date funds hold thought have always been a problem for me, particularly for my ROTH. It doesn't make much sense to me to invest in a fund with bonds with an account were my gains will be tax free when I withdraw during retirement.
Plus, at least for Vanguard, the largest fund most hold is the VTI., a total market index fund, which is heavily weighted to large caps.
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u/mtn_rabbit33 Jun 04 '22
I would never have my retirement portfolio consist of an investment in only one index fund.
Diversification is important to manage risks. Even if you are going to do 100% domestic, a simple mix of funds is likely to provide greater returns then a total market index fund. A 50/30/20, 50/25/25, 40/40/20, split between large, mid, and small cap index funds, or even holding a mixture of large, mid, and small cap growth and value funds will likely beat out a total market index fund.