Investing

Books:

• A Random Walk Down Wall Street: The Best Investment Guide That Money Can Buy Thirteenth Edition by Burton G. Malkiel
• The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns by John C. Bogle
• The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life by JL Collins
• The Bogleheads’ Guide to Investing 2nd Edition by Mel Lindauer, Taylor Larimore, Michael LeBoeuf, John C. Bogle
• The Bogleheads’ Guide to the Three-Fund Portfolio: How a Simple Portfolio of Three Total Market Index Funds Outperforms Most Investors with Less Risk by Taylor Larimore, John C. Bogle
• The Bogleheads’ Guide to Retirement Planning by Taylor Larimore, Mel Lindauer, Richard A. Ferri, Laura F. Dogu, John C. Bogle

Websites and posts:

• Investopedia
• Bogleheads
• Three fund portfolio
• Optimized Portfolio
• Portfolio Asset Allocation by Age
• Lazy Portfolios
• The Best Total U.S. Stock Market Funds
• Morningstar State of Retirement Income
• Fidelity Planning and Guidance Center

Diversification

I need to avoid “tax efficient” funds, since what they are trying to avoid does not apply to me.

QQQI is not a good idea, not because it uses call options, and not because of tax repercussions which do not apply to me, and not because of its 0.86% fee, but because it is too concentrated and thus not “safe”.

I need examples of high-quality funds in each category…

My allocation (work in progress):

• 18 months of money in safe liquid instruments (money markets)
  • do I need to allocate a part of my bonds bucket to Certificates of Deposit or just increase the cash amount?
• Corporate Bonds 20%
  • some portion - high-yield (junk bonds)
  • Question: what portion should be junk bonds?
  • Question: how is this better than a bond index fund that combines treasury and investment grade corporate funds?
• Stocks 80%
  • 3/8 US grows stock fund
  • 4/8 income (dividend) stock fund
  • Question: why is this better than a whole-market US stock index fund?
  • 1/8 international growth stock fund

Malkiel asset classes:

• Cash
  • money-market fund or short-term bond fund (average maturity 1 to 1.5 years)
• Stocks
  • 1/2 US stocks with good representation of smaller growth companies
  • 1/2 international stocks, including emerging markets
• Bonds and bond substitutes:
  • no-load high-grade corporate bond fund
  • some Treasury inflation-protected securities (TIPS)
  • foreign bonds
  • dividend growth stocks
• Real Estate:
  • portfolio of REITs

Malkiel allocation:

age	cash	bonds	stocks	real
mid-twenties	5%	15%	70%	10%
late thirties to early forties	5%	20%	65%	10%
mid-fifties	5%	27.5%	55%	12.5%
late sixties and beyond	10%	55%	40%	15%

Funds

It seems that I can buy Vanguard ETFs at Fidelity with no additional fees, but for mutual funds there are fees?

Money Market

non tax-exempt Vanguard VMFXX 0.11% 44 days Fidelity SPAXX 0.15% 37 days TFDXX 0.17% (from Dima B.)

tax-exempt Vanguard VMSXX 0.15% 11 days Fidelity FTEXX 0.16% 35 days

US Stocks

Vanguard VTSAX 0.04% (CRSP) Vanguard ETF VTI 0.03% (CRSP) Fidelity FSKAX 0.015% FZROX - less coverage than FSKAX Fidelity FSTVX 0.04% (Dow Jones) - not good, price-weighted!

International Stocks

Vanguard VTIAX 0.11% (FTSE) Vanguard ETF VXUS/VEU 0.08% Fidelity FSPSX 0.04% (MSCI EAFE)

Corporate Bonds

Fidelity FCBFX 0.45%

Dividends

Vanguard VYM 0.06% Vanguard VDAIX 0.08% Vanguard VDIGX 0.26% Vanguard VEIRX 0.19%