Is my retirement portfolio diverse enough?

In My Humble Opinion
1

I understand diversification mostly. You don’t want all your eggs in one basket. That way if a segment of the market fails, your whole retirement isn’t shot.

I have 35 years until retirement. My main goal is becoming debt free, so that’s where most of my money goes. Still, I invest enough in my 401k to get my employers 100% match. And I am putting 50 a month into a Roth Ira (just to get in the habit of investing and learn about it).

My 401k is a low expense SP500 index fund. My Roth is basically the same style but different name fund.

Does the fact that these are index funds provide enough diversification? At this point we are only talking less than 10k. Should I diversify more when it is larger or is this OK for long term?

2

Congratulations on getting started early - it will pay off big time if you continue.

One index fund is a great start, but it is not diversified. It is not complicated to set up a diversified portfolios, in fact I would avoid complicated with an approach like this.

3

Reported for forum change.

4

Since the OP is looking for advice, let’s move this to IMHO.

Colibri
General Questions Moderator

5

In the long term you’ll probably want to add some bonds, then maybe some real estate, and (maybe) international stock as well.

But you’re just fine for where you are in life. Low expense S&P500 fund is a great place to be.

6

Willcross, I’m a Registered Rep but can’t give advice on an open forum. Send me a PM and I’ll do what I can to take a look.

7

The Bogleheads forum has some pretty solid investment advice for typical investors saving for retirement. Probably the easiest strategy is the three fund portfolio. Basically, just choose a mix of low-cost index funds that give you domestic stock, international stock and domestic bond exposure, e.g. Vanguard Total Stock Market Index (VTSMX), Vanguard Total International Stock Index (VGTSX), and Vanguard Total Bond Market Index (VMBFX). Then set up automatic contributions and regular rebalancing and forget about it.

8

+1 (to the Three Fund Portfolio and low cost index funds)

I wish I had not spent so much on fees and advisors. I also recommend this Frontline episode on retirement investing.

9

I agree.
If you like fiddling about with things, you can then add more funds to, say, weight toward smaller-cap stocks, add an REIT fund, foreign market diversification (e.g. emerging markets), etc. Fun times.

But three funds is a good place to start.

Also re: debt reduction, that’s a very good thing. However, if the interest rate is really, really low, it can be better to invest it (e.g. to get your employer match, as you are doing.)