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I have determined the following ratio for the Equity portion of my investments:

30%: Intl Equity
40%: US large cap
30%: US small and mid cap

Now, I have some funds invested in a S&P 500 Index fund with Schwab. However, now the total picture is such that I need to put more funds in the "US small and mid cap" bucket. But, there's no index fund at Schwab which has a good ROI. Is a further diversification advisable?

Chris W. Rea
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user65003
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2 Answers2

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Yes, you could potentially benefit from more diversification.

Specifically, consider adding fixed income investments and some cash—even if you are young, and even if you have appetite for risk and like equities above all else. I wrote an answer about this for this other question: Should I exclude bonds from our retirement investment portfolio if our time horizon is still long enough?

Chris W. Rea
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With all the information you provided: yes. You should diversify more.

Serious answer: How much you want to diversify depends on the level of risk you want to take and the amount of money you want to invest. Do you have $1 ? Put it all into a single stock. $100 ? maybe 2. $1B ? Maybe diversify a little more and definitely throw some bonds in there.
Don't need the money anytime soon ? No need to diversify more. If the US tanks so hard that the 70% you have in US stocks actually go down significantly, chances are that the international markets will as well. Added bonus: in that case even bonds might not help you.

xyious
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