- A Random Walk Down Wall Street By Malkiel
- The Four Pillars of Investing and The Intelligent Asset Allocator, both by Bernstein
- What Wall Street Doesn’t Want You to Know by Swedroe.
The table below shows the recommended breakdown and categories of mutual fund investments needed to make up the domestic portion of your equity portfolio. I have also, for your convenience, listed the corresponding Vanguard index mutual funds that can be bought for your portfolio if you choose.
To find the overall percentages of your portfolio that each fund should contribute, simply multiply your overal equity allocation % (70% in this example) by the % allocation of the equity portion of your portfolio. This multiplication can be done to all of the funds with the exception of the REIT portion, which needs to make up 10-15% of your overall portfolio, increasing as you age.
The table below shows the recommended components to make up the international portion of your equity portfolio, based on a 30% international / 70% domestic equity split. It should be noted that in several of the books I referenced above, they suggest purchasing Large cap value, small cap, and small cap value international funds as well.
However, since these funds are not readily accessible through Fidelity and Vanguard, I avoid them (they are only available through DFA Fund Advisors).
In place of these categories, I use a Total International Stock Fund offered with low management fees through Vanguard.
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