What style funds should I invest a Roth IRA in?

Question

I already contribute to a 401k via the Government Thrift Savings Plan. I am invested in TSP funds that track S&P 500 (C), Wilshire 4500 (S), and MSCI EAFE (I).

I've got 30 years to go.
There is minimal overlap. FYI. The Wilshire 4500 tracks the same as Wilshire 5000 without the S&P 500.

Answer 1

It depends on your age and risk tolerance and also how much time you want to put into managing your account.

I will say that you have a LOT of overlap in the S&P and Wilshire funds, in fact, it's pretty much 100% so you are not anywhere near as diversified as you probably think. Pretty much every stock in the S&P is in the Wilshire so there is no need to hold both.

I would probably get rid of the S&P and, assuming you are young with a high risk tolerance, have at least 25% in international. If you split between the International and the Wilshire, you really only need the 2 funds (unless you also want a bond fund).

As far as the Roth goes for people who are just learning and/or don't want to spend a lot of time picking, I recommend the target retirement funds from Vanguard. They are no-load, low fee balanced funds that will keep you appropriately allocated for your age.

Answer 2

I believe most experts would say it depends on your age... the younger you are the more aggressive the fund should be. If you are under 35, I would say the S&P 500 would be for you.