I previously posted about rolling over my assets from my 401(k) to an IRA due to a job termination. I have decided to do this with Vanguard, but am getting confused on the best allocation of funds. My initial thought would be to do:1/5 VFINX - S&P 500 Index1/5 VIMSX - MidCap Index1/5 NAESX - SmallCap Index1/5 VTSMX - Total Market Index1/5 VGTSX - International Index<p> Take a look at www.riskgrades.com website. You can enter the portfolio and calculate the overall risk assessment, which properly takes into account the benefits of diversification. Then you can run "what-if" alternatives to see how variation would alter the Risk Grade. <p> I suspect you have more overlap (and less diversivication benefit) than you might expect. Also, a big problem with index funds is that they are almost all "cap-weighted" which causes an apparently broad based index to perform a lot like the largest 15% of the stocks comprising the index.
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