Rolling Over to an IRA Again

So I just got around to doing my 401k rollover from my last job.  I’d already set up an IRA from a previous rollover, but I wasn’t sure if I could roll into that same IRA, but I called up Vanguard and found out that it was no problem.  Now, how to allocate?

My IRA with Vanguard only had about $25k in it, and I had everything in one fund–the Extended Market Index Fund.  I’m a big fan of index funds for a couple of reasons.  One, they usually have low turnover because they are basically run by computer programs.  That means low capital gains for taxable accounts, and low fees because they are run by a computer program, not a fund manager.  Computers work cheap!

Index funds also track the market in general, and that’s the measure of most funds–do they beat the market?  Rather than take the chance, I’ll just take the market.  The biggest reason I like index funds is that I’m just lazy.  I feel much more comfortable not having to worry about how conditions are changing.  Just give me the market at large and I’ll take it!

Anyway, I did want to diversify a little when I rolled the new money (~$50k) into this IRA.  I decided to break up the money into three different funds–$20k in international index, $20k in a mid cap index fund, and the remainder in old reliable, Vanguard’s Index 500 Fund.

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