Effort For the wealth acquisition stage an allocation of 100% stocks using VTSAX is the soul of simplicity. But using this framework of two stages and two funds, you have all the tools you need to find your own balance. But if the market moves against you, you’ll have to be willing to push your retirement date back a bit. Next, as a rule it is better to buy and sell in tax advantaged accounts to avoid creating taxable events. You can deduct it against any other gain you happen to have, including any capital gain distributions. I prefer toÂ avoid the possible short-term market distortions might cause. You might leave a high-paying job to work for less at something you love. If you need every penny of that just to make ends meet, your ability to handle risk drops. This rebalancing is simple and can be done online with Vanguard. At this point I recommend adding bonds to the portfolio. Complex and expensive investments are not only unnecessary, they under-perform. Factors to consider in assessing your risk tolerance.
VTSAXÂ (Vanguard Total Stock Market Index Fund) andÂ VBTLXÂ (Vanguard Total Bond Market Index Fund) The wealth acquisition stage is when you are working and have earned income to save and invest. I do suggest avoiding theÂ very end/beginning of the year. How those results actually unfold over the decades is likely to be equally close and the ultimate winner is basically unpredictable... It is a popular time for rebalancing and many are engaged in tax selling and new buying. As you get older you may not have all the same options readily available as in your youth. But if you are flexible as to your retirement date and more risk tolerant, you might stay fully in stocks right up until you make the change. Â While it is best to hold bonds in tax-advantaged accounts, it does complicate rebalancing. Does more frequent reallocation improve performance. Ideally you will do this in a tax-advantaged account like an IRA or 401k so you don’t have to pay tax on any capital gains. ... .