On Jan 23, 10:26 pm, hh_onl...[at]mindspring.com wrote:
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I think it is reasonable to have up to 30% of your equity fund holdings
in international equity funds.

However these funds have done well, of late, because of the weakness of
the US dollar rather than because foreign stocks have necessarily done
better than American stocks (some have, some have not). I don't expect
that to revert, any time soon, but if Warren Buffet announces that he
is no longer bearish on the US dollar, I would pay attention (he has a
longstanding bet against the US dollar, holding 20% or so of his assets
outside the US for the first time in his 50 year investing career-- it
hasn't really paid off for him, but I trust his reading of the
fundamentals. You can see his opinions in the annual Berkshire
Hathaway report, which is worth reading for any investor, in any case).

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Adding to this, you could keep an eye oon the future, thinking of where
most assets will be when you retire or leave your current employer.

Choosing a company like Vanguard (or Fidelity, T Rowe Price or another
large mutual fund company) is a step in this direction. If you chose a
mutual fund from a smaller company (with fewer funds), there would be
more paperwork/ accounts at other fund companies when you rolled over
and needed a proper allocation.

I'd use the Roth or IRA accounts as the "core" holdings as much as
possible, with 401k accounts being complimentary as much as possible.
The Roth you will own for your "whole life" and the 401k may come or
go- and get rolled over a few times probably (as a previous poster
alluded to). Realizing that **most** of your curent assets are in the
401k, you (as well as myself and many others) may have more assets in
401k.

For this reason, you may duplicate holdings in the IRA, with the eye
that eventually the Roth holding will be a larger position than when
you first opened it.

I also agree you should determine your allocation- what % in each of
these

domestic large cap growth
domestic large cap value
domestic mid cap (optional)
domestic small cap growth
domestic small cap value
"total domestic equity allocation"
international large cap
international small cap
"total international equity allocation"
bond fund (optional)
bond fund (optional)
"total bond allocation"

hh_onl,

When asset allocating ignore the account "types" initially. As some
were hitting on earlier, it is important that you allocate across your
entire investment portfolio, and not sectionalize by each account type.


Select an asset allocation based on your risk tolerance. FOR EXAMPLE, a
simple allocation would be 70% US equities, 20% international, 10%
bonds/fixed.

Next allocate it across all of the accounts. This may mean that any
single account only satisfies one of your allocation sectors, but
OVERALL the accounts should portray 70/20/10. (The Roth may look heavy
in a particular sector, but when taken as a whole your portfolio should
balance).

If you decide to include your spouse's accounts then their risk
tolerance should also be factored. You are doing them an injustice
otherwise. If your spouse is onboard with your allocation, but still
feels uneasy, then it may help psychologically if the lower-risk
investments are in "their accounts"

I guess that's my overall question. With our 401K accounts and my
wife's S&P Index fund, am I not getting a good US market exposure? I
don't think there is much international coverage in either 401K
account.

Thanks,
HH


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hh_online[at]mindspring.com writes:

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I wasn't asking how much money you're putting in your 401K. I was
asking what your asset allocation in the 401K is. If you already have all
your 401K money in international funds, then it's silly to put your IRA
money in an international fund, too.

Most 401K plans offer a fairly limited selection of funds. If that's
where you already have the majority of your money invested, then you
should use your IRA to fill out any gaps in your existing portfolio or
shortcomings in the selection of funds you have available in the 401K
plan. Personally, I'm in the opposite position: having changed jobs
just a year ago, I have most of my retirement money in accounts other
than my current employer's 401K plan, so I've cherry-picked the one
best fund from the plan for my current contributions, and restructured
the asset allocation in my other accounts to compensate for it.

-Sandra the cynic

Andrew Koenig wrote:
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The US is around 45-50% of world stock market indices.

I was under the impression the OP already had a significant exposure to
US markets via his wife, so there is no point in doubling up?

Sandra,

RE: Our 401K - we're still contributing to get our employer's match and
then some.

I am a bit confussed by what you said in regards to asset allocation.
You said I need to manage the accounts as a single portfolio, but then
you say you would manage your spouse's seperately. I am not looking at
both accounts as a single portfolio. I was looking at my wife's
initial mutual fund in her account as a bit 'safer' and more stable
than the international fund that I was interested in buying for my
initial fund buy in my Roth. In short, my question do you guys
consider the international index funds a good investment in my Roth
accountas the sole fund for the next couple of years?

Thanks!
HH

Sandra Loosemore wrote:
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<hh_online[at]mindspring.com> wrote in message
news:1169510437.933822.251020[at]l53g2000cwa.googlegroups.com...

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Both of these funds omit USA. For completeness, I would think you might
also want to consider VHGEX.

Sandra Loosemore wrote:
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Cynic about having a separate allocation than the hypothetical spouse,
but right on target regarding the 401(k)/ Roth.
Given the larger portion of the money is in the 401(k), I'd first review
the investment options, and start the process there. Some funds may be
overpriced (I mean expenses/fees, not price per share) compared to
others. My own 401(k) has an S&P fund with a .05% annual charge, but has
managed funds that are very overpriced. So I use the 401(k) mostly for
that fund, and use the other accounts to diversify. This includes the
wife's accounts, so while each account looks loaded one way or the
other, all together they are where I want the total portfolio to be.

I'd ask the OP also, does the 401(k) have matching funds and are you
putting in enough to capture all the matching?

JOE

hh_online[at]mindspring.com writes:

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Yeah. What are you doing with your 401K savings? You need to manage
the asset allocation of your retirement savings as a single portfolio,
even if it's split between different accounts. Personally, if I were
married, I would still manage my retirement investments separately
from my spouse's, but other people might feel differently about that and
want to lump everything together for asset allocation purposes.

-Sandra the cynic

I started my wife's Roth account through Vanguard a few weeks ago by
choosing the Vanguard 500 Index Fund (VFINX) with an initial investment
of 4K. My plan is to continue adding to that fund on a monthly
schedule until it's between 10-15K (this should take a year or two) and
then add an International index fund.

I am about to set up my Roth account and follow the same formula, but I
was thinking of my initial fund to be a International fund such as
Vanguard Developed Markets Index Fund (VDMIX) or Vanguard Total
International Stock Index Fund (VGTSX) . My reasoning being that I am
more apt to be aggressive and take on a bit more risk than my wife and
from I understand international markets are on the upswing (China and
India). Once my fund reaches the 10-15K level, I plan on adding a
domestic US fund family.

a side note - We're in our early 30s with 401K savings totalling 70K+.
We save 15% for retirement plus 529 accounts for our children. We have
no major debt outside of our mortgage and an emergency fund of 10K.

Thoughts on my Roth outline?

Thanks in advance,
HH