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My IRA has five funds in it, and they all seem to be moving about the same. My fear is my funds are overlapping and I may be better off moving everything to a S&P Index fund and a bond fund.

Here are the funds I have now:

USAAX - Growth Fund - 11%
USISX - Income Stock Fund - 7%
USSPX - S&P Index Fund - 34%
USSCX - Technology Fund - 33%
USAWX - World Growth Fund - 15%

Thanks for help
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No. of Recommendations: 1
USAAX - Growth Fund - 11%
USISX - Income Stock Fund - 7%
USSPX - S&P Index Fund - 34%
USSCX - Technology Fund - 33%
USAWX - World Growth Fund - 15%


You've basically created your own index fund, which is your portfolio. Folks who have 4 or 5 or more mutual funds usually have a net return equal to an index fund, only they pay more in taxes and fees. I have 6 mutual funds. I should have one or two, but what the heck, even folks who know better don't always know better.
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No. of Recommendations: 1
My IRA has five funds in it, and they all seem to be moving about the same. My fear is my funds are overlapping and I may be better off moving everything to a S&P Index fund and a bond fund.

Here are the funds I have now:

USAAX - Growth Fund - 11%
USISX - Income Stock Fund - 7%
USSPX - S&P Index Fund - 34%
USSCX - Technology Fund - 33%
USAWX - World Growth Fund - 15%

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After a cursory look at your portfolio, I tend to agree with your observations.

Not having any additional information about your age and investment objective/s, I would probably trade/exchange the funds you now have within your IRA for a Balanced Fund (USBSX) and an International Fund (USIFX). This would give you exposure to both Domestic and International equities as well as Domestic Bonds. It would also decrease your expenses which add up considerably over time. Rebalancing and overall management of your portfolio would also be much simplier.

I noticed that USAA does not have a "Target Retirement" or "Life-Cycle" line-up of funds as Vanguard and several other fund families do. This would be another possible approach for you - if they did. Making investing simplier while lowering costs usually makes for a more effective and therefore a more rewarding portfolio.

Just a few observations of my own.

regards,
Bill
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Bill - thanks for the observations. I was thinking along those lines as well. I've heard of these new funds and will research them. They sound like a great idea (in theory).

To note - I am in my mid 30's; I'd be considered aggressive investor.

Cheers
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Pile I'll try to take a look and perhaps email you the overlap if any you have.
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Why would a person with several funds pay more in expenses and taxes than a person with just one or two funds? Assuming that each investor has the same amount of $$ invested and is careful about fund expenses and fees, it seems both investors would have similar costs.
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Why would a person with several funds pay more in expenses and taxes than a person with just one or two funds? <?i>

You're correct. The number of funds isn't theissue, but the original message to which I was replying involved a question about index funds versus actively managed funds. As long as you pay close attention to tax efficiency and fees, you can have as many funds as you want from an expense/tax standpoint. One exception is Vanguard. If you put a lot of your eggs in one basket so as to qualify for Admiral funds, you get lower fees, which can make a difference.
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Try entering the group as a portfolio into http://www.riskgrades.com/
It will calculate the risk of each fund, and of the portfolio, complete with a calc of the diversification benefit.

You can run what-ifs on the portfolio to test the effectiveness of fund changes to the total diversification benefit.

The site is free.
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