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URL:  http://boards.fool.com/here-is-a-link-to-a-paper-that-talks-about-26046855.aspx

Subject:  Re: Asset allocations Date:  10/30/2007  1:11 PM
Author:  JLC Number:  59918 of 75890

Here is a link to a paper that talks about diversification by asset class. I have been implementing some of its ideas for about one year. Plus, it keeps things simple.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=962461

Now to your specific questions:

#1--Yes. The S&P 500 is a good baseline to start and maintain.

#2--Yes. You should have exposure to international stocks. While the world's economy is becoming more intertwined, there can still be differences in return from U.S. and International. Be forewarned, even though you are risk tolerant, you don't know how truly risk tolerant you are until you experience a big downturn. I prefer ETFs for things, so EFA for International and EEM for Emerging Markets.

#3--Given your time horizon, no time like the present. FWIW, I started investing in EEM about 2 years ago, and things were at a high then. Well, we're higher now. So if I had waited for a big correction, I would have missed out on another 30-50% gain.

#4--I like to keep things consolidated. Some places start giving you benefits and discounts when your total holdings start crossing certain minimums. Vanguard has been around for a long time, so its not like it will go bankrupt anytime soon and all your funds are tied up.

As far as your semi-liquid account for large purchases. Do you have an emergency fund, i.e., an account with 3-6 months worth of living expenses set aside in a money market account? Plus, I would not have anything invested in equities if I'm think I'm going to need it within the next 3-5 years.

JLC
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