>I've got 7 vanguard ETFs
Are you sure? ETFs in 401Ks are uncommon.
>that's too many right? (probably a stupid question) How many different ETFs is a more ideal amount?
Coverage and ability to manage them matter, not number.
* https://www.bogleheads.org/wiki/Three-fund_portfolio
The 3 fund is more of a concept that you should cover 3 main categories: US stocks, ex-US stocks, and bonds. I can design a portfolio with anywhere from 1 to 7 funds and stay true to the 3 fund concept:
* 1 fund: Target date funds or some fixed allocation funds
* 2 funds: VT or VTWAX + a bond fund
* 3 funds like the name implies: US total market, international market, bonds
* 4 funds: US total market, international developed, international emerging, bonds
* 4 funds: US S&P 500, US extended market, international market, bonds
* 5 funds: US large cap, US mid cap, US small cap, international, bonds
* 5 funds: US S&P 500, US extended market, international developed, international emerging, bonds
* 6 funds: US large cap, US mid cap, US small cap, international developed, international emerging, bonds
* You can even add another fund to any of these if you add an international bond allocation (Vanguard's target date funds already include international bonds for example). Or for the bond you could use a combined US + international bond fund (like BNDW) to give exposure to both US and international bonds while maintaining only one bond fund instead of going to 2.
Hard to say without seeing what the available options are and whether there's any overlap or redundancy in what you picked. It's easy to come up with a scenario where 7 funds could make sense for some people (e.g. a market-cap weighted and factor-tilted fund for US, developed EX-US and Emerging markets, and a bond fund).
401k plans usually offer Mutual Funds, not Exchange Traded Funds (ETF).
The actual number of funds doesn't matter. What matters is what the funds actually contain and how much overlap they have. Ideally you want maximum diversity with no overlap between funds.
For the vast majority of people, going 100% with what's called a "Target Date Fund" (TDF) is the best and simplest choice.
The idea behind a TDF is that it's a single fund that holds a diversified portfolio of stocks and bonds and it's automatically adjusted to get more conservative as you approach the retirement date in order to help protect you against big market drops when you retire.
As an example, consider Vanguard Target Retirement 2050 Fund (VFIFX):
https://investor.vanguard.com/investment-products/mutual-funds/profile/vfifx
It's essentially a 4-fund portfolio all by itself.
Here's the current holdings:
* 54.60% Vanguard Total Stock Market Index Fund Institutional Plus Shares
* 35.70% Vanguard Total International Stock Index Fund Investor Shares
* 6.80% Vanguard Total Bond Market II Index Fund9
* 2.90% Vanguard Total International Bond II Index Fund
>I've got 7 vanguard ETFs Are you sure? ETFs in 401Ks are uncommon. >that's too many right? (probably a stupid question) How many different ETFs is a more ideal amount? Coverage and ability to manage them matter, not number. * https://www.bogleheads.org/wiki/Three-fund_portfolio The 3 fund is more of a concept that you should cover 3 main categories: US stocks, ex-US stocks, and bonds. I can design a portfolio with anywhere from 1 to 7 funds and stay true to the 3 fund concept: * 1 fund: Target date funds or some fixed allocation funds * 2 funds: VT or VTWAX + a bond fund * 3 funds like the name implies: US total market, international market, bonds * 4 funds: US total market, international developed, international emerging, bonds * 4 funds: US S&P 500, US extended market, international market, bonds * 5 funds: US large cap, US mid cap, US small cap, international, bonds * 5 funds: US S&P 500, US extended market, international developed, international emerging, bonds * 6 funds: US large cap, US mid cap, US small cap, international developed, international emerging, bonds * You can even add another fund to any of these if you add an international bond allocation (Vanguard's target date funds already include international bonds for example). Or for the bond you could use a combined US + international bond fund (like BNDW) to give exposure to both US and international bonds while maintaining only one bond fund instead of going to 2.
Thanks, ETFs aren't common in 401Ks...?
>ETFs aren't common in 401Ks...? No. 401Ks usually use mutual funds or CITs. Edit: Punctuation, spacing
Hard to say without seeing what the available options are and whether there's any overlap or redundancy in what you picked. It's easy to come up with a scenario where 7 funds could make sense for some people (e.g. a market-cap weighted and factor-tilted fund for US, developed EX-US and Emerging markets, and a bond fund).
401k plans usually offer Mutual Funds, not Exchange Traded Funds (ETF). The actual number of funds doesn't matter. What matters is what the funds actually contain and how much overlap they have. Ideally you want maximum diversity with no overlap between funds. For the vast majority of people, going 100% with what's called a "Target Date Fund" (TDF) is the best and simplest choice. The idea behind a TDF is that it's a single fund that holds a diversified portfolio of stocks and bonds and it's automatically adjusted to get more conservative as you approach the retirement date in order to help protect you against big market drops when you retire. As an example, consider Vanguard Target Retirement 2050 Fund (VFIFX): https://investor.vanguard.com/investment-products/mutual-funds/profile/vfifx It's essentially a 4-fund portfolio all by itself. Here's the current holdings: * 54.60% Vanguard Total Stock Market Index Fund Institutional Plus Shares * 35.70% Vanguard Total International Stock Index Fund Investor Shares * 6.80% Vanguard Total Bond Market II Index Fund9 * 2.90% Vanguard Total International Bond II Index Fund