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whisky_in_your_water t1_jacxb8f wrote

Reply to comment by surviveb in My Roth IRA is 100% invested into VTSAX. Is it an issue to keep investing in VTSAX each year? by dennisj9

But why buy three if one do trick?

You could buy:

  • ~85% VOO (large cap)
  • ~10% IVOO (mid cap)
  • ~5% VTWO (small cap)

And then you'd just get something very close to VTI/VTSAX performance, but a lot more complicated.

Alternatively, you could buy an international fund to further diversify, but then you could just switch to VT/VTWAX, assuming you're looking for a global market cap weighted strategy.

In other words: don't buy funds to have more funds. But the funds you need to match your strategy.

I try to buy as few funds as I can to get my desired asset allocation, currently, that's something like 7 because of fund options are various institutions (e.g. S&P 500 + small cap in 401k, FXROX and FZILX in my Fidelity HSA, both VTIAX and VFWAX in my taxable brokerage for TLH, and VTSAX in my IRA).

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surviveb t1_jacxv61 wrote

I definitely have a lot more to learn. I knew vtsax was diversified. Thanks for the input.

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whisky_in_your_water t1_jad0k2u wrote

Hope it helped!

The main takeaway is that more funds doesn't necessarily mean you're more diversified. I have VTIAX and VFWAX, but they're pretty much the same thing. Likewise with VOO and VTI.

The important thing is to decide what allocation you want, and then buy funds that provide that. Unfortunately, there are as many fund allocation strategies as funds, so it can be complicated.

Good luck! I'm happy to answer any questions.

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