Do you use international funds for Asset allocation

[FirstTimer90]

I have done some reading about a correct but simple way to allocate assets: invest in the US Stock Market Index Fund, International Index Fund and US Bond Index

my first question would be, is this correct? and my second question would be about where and how to best invest in the international funds, can anyone offer suggestions or a direction to point me please?

[disneysteve]

Yes it is correct (if correct is the proper word here). There are many proponents of the 3-fund portfolio.

Where to do it? I think any of the big 3 - Vanguard, Fidelity, T. Rowe Price. I'm with Vanguard myself.

Then you just need to determine your allocation. That depends on your age and other factors but something like 70% US, 20% International, and 10% Bond would be a common starting point if you are young.

[KTP]

The very simple way is to use Vanguard ETFs which you can buy and sell just like a stock.

VXUS is a good one with low expenses, covers stocks outside of the USA

VWO is one for emerging (submerging last year) markets.

There are also funds like VT for total world market but they are going to be heavy in US stocks.

[FirstTimer90]

Yes it is correct (if correct is the proper word here). There are many proponents of the 3-fund portfolio.

Where to do it? I think any of the big 3 - Vanguard, Fidelity, T. Rowe Price. I'm with Vanguard myself.

Then you just need to determine your allocation. That depends on your age and other factors but something like 70% US, 20% International, and 10% Bond would be a common starting point if you are young.

Thank you.
Within vanguard are you only comfortable with the total international index fund? Or are there other international index funds that you like or capture your attention?

[disneysteve]

Thank you.
Within vanguard are you only comfortable with the total international index fund? Or are there other international index funds that you like or capture your attention?

It depends on how involved you want to get. If you want a simple 3-fund portfolio, it would be Total US Stock Index, Total US Bond Index, Total International Stock Index.

I just recently added a small stake in Vanguard's emerging market ETF (VWO) but then you're expanding beyond the 3-fund model.

[feh]

OP - read this page: http://www.bogleheads.org/wiki/Three-fund_portfolio

[jpham540]

It will depend on your age and risk tolerance. I have vanguard total stock market index, vanguard total international stock index, and vanguard total bond market index. I am 27 year old and my asset allocation is 82% stock (25% is in international), 16% bond, and 2 % cash. So it will vary, you need to figure what asset allocation you’re comfortable with and the younger you’re, you should lean more into equity.

[cardtrick]

There is no right answer.

I'm currently about 25% emerging markets and the rest in short duration bonds. I'm averaging into 100% emerging markets (DFEMX). Every month or so, I plan on moving a bit of money. The options in my 401K are very limited.

[FirstTimer90]

It depends on how involved you want to get. If you want a simple 3-fund portfolio, it would be Total US Stock Index, Total US Bond Index, Total International Stock Index.

I just recently added a small stake in Vanguard's emerging market ETF (VWO) but then you're expanding beyond the 3-fund model.

I don't need it simple. Actually I would like it a bit more complex provided I have good information (from someone like you) and that I take the time to research things to educate myself before I invest.

Would you make the case to move a little more or less in the Emerging Markets if the investor will be in index funds for 30+ years?

[feh]

I don't need it simple. Actually I would like it a bit more complex provided I have good information (from someone like you) and that I take the time to research things to educate myself before I invest.

Would you make the case to move a little more or less in the Emerging Markets if the investor will be in index funds for 30+ years?

I suggest you start with the 3 fund portfolio. The very first decision you'll need to make is what percentage you want in equities. This is a function of your risk tolerance and time horizon.

Then, you can fiddle around the margins. Some people tilt to emerging markets. Some people tilt to small-value (like me). Some people tilt toward real estate.

I suggest you start here: http://www.bogleheads.org/wiki/Bogle...g_start-up_kit

[Petunia 100]

A broadly diversified fund such as Vanguard's Total International Stock Market holds both developed and emerging markets. It isn't necessary to buy a dedicated emerging markets fund to gain that exposure. If you wish to overweight them, that is another matter.