Re: Balanced portfolio with index funds

> 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.
 
Big fund companies have self-adjusting funds for this which you
buy based calibrated to a year of retirement.  See Vanguard or
http://personalmko.fidelity.com/products/funds/content/freedomfunds.shtml

Some years ago many of these seemed to lag markets (adjusted for
bonds) quite a bit, I think for the above reasons of being too
generic and not diversifying stocks and tuning bond durations to
current conditions. But maybe more sophisticated now - check them.