Re: Balanced portfolio with index funds

Thanks for the response.  Where can I get more information on asset 
allocation models?  Is it possible to build a balanced retirement
plan using only index funds?

A question about rebalancing:  Let's say I decide to rebalance
every 5 years.  Does that mean I only change where new contributions 
go, or does it also require that I sell some of the old funds and
try to maintain the new mix for the entire portfolio.

Anoop

"BMS" <[EMAIL PROTECTED]> wrote in message news:<[EMAIL PROTECTED]>...
> There is the rule of 100. Take 100 subtract your age, the difference is the
> percentage that should be in equities and the rest in fixed income.
> 
> However what you are proposing is not close to a balanced retirement plan.
> Having all your retirement in 2 types of funds, a large cap index and a bond
> fund. Go look at some asset allocation models and compare them to your risk
> tolerance profile. Up to 95% of your return can be linked to proper asset
> allocation.
> 
> "Anoop Ghanwani" <[EMAIL PROTECTED]> wrote in message
> news:[EMAIL PROTECTED]
> > Are there rules of thumb for building a balanced retirement
> > portfolio with index funds such as the S&P 500 and the total
> > bond market index fund?  For example, would it make sense
> > to allocate funds as follows:
> >
> > Age     S&P 500   Total Bond Market
> > <30     100%      0%
> > 30-40   80%       20%
> > 40-50   60%       40%
> > 50-60   40%       60%
> >
> > Is this too simplistic a plan?  I'm basically looking
> > for a long-term investment strategy that is known to work
> > reasonably well in all market conditions so that one
> > doesn't have to keep watching what the fund manager is
> > up to.
> >
> > Anoop