40% in S Fund and 40% C Fund

1

Want an aggressive portfolio of 95/5 to become 65/35 20 years from now with a good mix of large cap, small cap, and international. Don’t like the lifecycle mix

When I look up the Total Stock Market Index, it is 87.5-90.0% SPY and about 10-12.5% VXF so I have 3-4x that concentration over the last 11 years with the TSP

I noticed over the last 15 years, the C fund has outperformed the S fund. I’ve invested 5% and they matched 5% and am currently investing 11.75% and they’re matching 5% so 16.75% or $1,050/month is being invested

At 40, I currently have $96,250 with 40% C, 40% S, and 20% I - no G or F funds. The L funds suggest 50% in the C, 15% in the S, and 35% in the I

Due to my dilemma, a coworker thought it might make sense to have half in my strategy and half in a lifecycle strategy so I don’t regret either decision

2

That would be equivalent to 45% in C, 27.5% in S, and 27.5% in I. I’m not sure why you’d regret your decision with 40/40/20 or 50/15/35, but not with 45/27.5/27.5.

If you don’t think the L funds are aggressive enough for you, you can always pick a later date than your projected retirement would suggest.

3

Thanks. I do like the 45/27.5/27.5 along with a 38/38/19 with 5% in the G&F funds

I am at my highest international holdings at 20%

Yes I’d like to be in 65-70% stocks in 2047 but also have a nice 1-2 year emergency fund

4
  1. 16.75% savings rate-the most important factor that determines retirement income is an individual’s savings rate. Congratulations on your impressive savings rate.
  2. 95% equity in your 40’s- make sure you are comfortable with possible significant future declines in your equity. The S&P 500 declined close to 50% during a 6 month period in 2008.
  3. 20% in international-for reference Vanguard recommends at least 20% in international.
  4. Learning more about investing to help your current and future decisions is time well spent. An excellent concise book is “If You Can” by William Bernstein.
5

Which I have never understood. It just seems like the patented CFP cya answer.

“Well I had them diversified”

Anyone care to explain? When domestic markets sneeze it seems like internationals get a cold.

6

Your statement is correct to a degree. And you are in good company; Jack Bogle famously did not advocate adding international equity. However, while the correlation between U.S. and international equity performance has recently increased, the correlation is not 100%. Adding international funds thus tends to decrease the volatility of a portfolio. The folks who set up the target date funds at Fidelity, Schwab and Vanguard include international funds. Vanguard has a paper that goes over the details of the benefit of including international equity in a portfoli that is titled “Global equity investing: The benefits of diversification and sizing your allocation”