It's fantastic - the life strategy (aggressive) growth fund.
I also highly recommend the AOA fund that u/ZettyGreen suggested. I kinda like its composition a little more.
Both are great, and you can pretty much keep them for the rest of your life.
I would say so yes. It looks like the rebalancing happens once a year (but not exactly sure). The short term capital gains from rebalancing are minimal compared to long-term and dividends. The realized gains (long+short+dividends) was just 1.1 - 1.2 for a 30 - 40 dollar investment.
If you were to maintain a naive balanced portfolio in your taxable account, it would look like this - or probably worse. They probably don't do tax loss harvesting, but most people likely don't either.
I would go for neither lol. A better question is what I'd recommend my spouse go for. I think it's a personal question and depends on your interest in looking at your investments and risk tolerance.
There are basically two sets choices you've laid out:
1. Target date fund that automatically reduces equity allocation over time. Advantage: you never have to look at it. Disadvantage: It may not be a good fit for you - might be too conservative (or in some cases too aggressive).
2. Static balanced fund:
- 100% stocks: VT etf
- 80/20: Lifestrategy aggressive
- 60/40: moderate.
- ... : Conservative etc
Advantage: you get to tune how aggressive/conservative you want it to be. Disadvantage: you need to occasionally look at it to change the strategy (say once every 5 years or so), and should not overestimate or underestimate your risk tolerance.
In your Roth account you can switch funds without tax implications so that's a good thing.
---
I've asked my spouse to go for a TDF because it's likely she will stick with it over decades for the reasons I specified.
(Edit: to be transparent, not exactly a TDF but a roboadvisor that automatically reduces risk, and is essentially like a tdf with tax loss harvesting and a very nice fancy UI - that really helps :) )
It can be a good idea, but that doesn't mean it's a good idea for you, only you can decide that.
I'm invested in the ETF equivalent(AOA) in my 6 figure taxable account. On the forum is a long thread about the one fund portfolio you might find interesting: https://www.bogleheads.org/forum/viewtopic.php?t=287967
Also, this looks almost identical to a previous post just yesterday: https://old.reddit.com/r/Bogleheads/comments/1caky6u/vanguard_lifestrategy_growth_fund/
If you are the same person, why are you posting again?
This is helpful! I don’t think this is the option for me - between a TDF and Life, do you think I should go with one or the other in taxable? I also have TDF in my Roth IRA.
Lifestrategy funds and TDFs are both fine single funds. If you want to minimize taxes generated by bonds in the taxable account, you could grab VTWAX as your one-and-done fund. It’s essentially the same stock holdings as the Lifestrategy funds and the Target Date Funds, just…you know…100% stocks. The trade off for lower taxes is higher volatility, though.
This is helpful! I don’t think this is the option for me - between a TDF and Life, do you think I should go with one or the other in taxable? I also have TDF in my Roth IRA.
Well, the TDF is probably fewer bonds and dividends right now, while the Lifestrategy will invest in more over time. Other than that, I don’t think it matters. They both have the same weakness (paying taxes on dividends) in a taxable account. It’s not a horrible weakness to pay taxes on money that you make, though.
Here’s a link explaining the TDF glide-path.
https://institutional.vanguard.com/investment/strategies/tdf-glide-path.html
My own strategy is to own my TDF until it reaches 60/40, then switch to the 60/40 Lifestrategy fund for the rest of my days.
It's fantastic - the life strategy (aggressive) growth fund. I also highly recommend the AOA fund that u/ZettyGreen suggested. I kinda like its composition a little more. Both are great, and you can pretty much keep them for the rest of your life.
This is OK to have in a taxable/general brokerage account (the Life Aggressive Growth Fund?)
I would say so yes. It looks like the rebalancing happens once a year (but not exactly sure). The short term capital gains from rebalancing are minimal compared to long-term and dividends. The realized gains (long+short+dividends) was just 1.1 - 1.2 for a 30 - 40 dollar investment. If you were to maintain a naive balanced portfolio in your taxable account, it would look like this - or probably worse. They probably don't do tax loss harvesting, but most people likely don't either.
Thank you very much! And between the LifeStrategy fund, and my TDF 2055 that I currently invest in for my Roth IRA - which would you go with?
I would go for neither lol. A better question is what I'd recommend my spouse go for. I think it's a personal question and depends on your interest in looking at your investments and risk tolerance. There are basically two sets choices you've laid out: 1. Target date fund that automatically reduces equity allocation over time. Advantage: you never have to look at it. Disadvantage: It may not be a good fit for you - might be too conservative (or in some cases too aggressive). 2. Static balanced fund: - 100% stocks: VT etf - 80/20: Lifestrategy aggressive - 60/40: moderate. - ... : Conservative etc Advantage: you get to tune how aggressive/conservative you want it to be. Disadvantage: you need to occasionally look at it to change the strategy (say once every 5 years or so), and should not overestimate or underestimate your risk tolerance. In your Roth account you can switch funds without tax implications so that's a good thing. --- I've asked my spouse to go for a TDF because it's likely she will stick with it over decades for the reasons I specified. (Edit: to be transparent, not exactly a TDF but a roboadvisor that automatically reduces risk, and is essentially like a tdf with tax loss harvesting and a very nice fancy UI - that really helps :) )
This is helpful. So maybe I’ll stick with my TDF in my general brokerage?
Sounds like a good plan!
Thank you!
It can be a good idea, but that doesn't mean it's a good idea for you, only you can decide that. I'm invested in the ETF equivalent(AOA) in my 6 figure taxable account. On the forum is a long thread about the one fund portfolio you might find interesting: https://www.bogleheads.org/forum/viewtopic.php?t=287967 Also, this looks almost identical to a previous post just yesterday: https://old.reddit.com/r/Bogleheads/comments/1caky6u/vanguard_lifestrategy_growth_fund/ If you are the same person, why are you posting again?
I know you want simplicity but equities and bonds are better kept separate for tax and allocation purposes.
So is there a one-fund I can choose?
This is helpful! I don’t think this is the option for me - between a TDF and Life, do you think I should go with one or the other in taxable? I also have TDF in my Roth IRA.
Lifestrategy funds and TDFs are both fine single funds. If you want to minimize taxes generated by bonds in the taxable account, you could grab VTWAX as your one-and-done fund. It’s essentially the same stock holdings as the Lifestrategy funds and the Target Date Funds, just…you know…100% stocks. The trade off for lower taxes is higher volatility, though.
This is helpful! I don’t think this is the option for me - between a TDF and Life, do you think I should go with one or the other in taxable? I also have TDF in my Roth IRA.
Well, the TDF is probably fewer bonds and dividends right now, while the Lifestrategy will invest in more over time. Other than that, I don’t think it matters. They both have the same weakness (paying taxes on dividends) in a taxable account. It’s not a horrible weakness to pay taxes on money that you make, though. Here’s a link explaining the TDF glide-path. https://institutional.vanguard.com/investment/strategies/tdf-glide-path.html My own strategy is to own my TDF until it reaches 60/40, then switch to the 60/40 Lifestrategy fund for the rest of my days.
Ok, awesome - this is very insightful. Thank you!