I am 33, new to investing, and have read a couple books (Bogle, William Bernstein "All About Asset Allocation") and decided on Vanguard ETFs (mainly due to greater diversification options compared with the mutual funds).
I have an initial $50k to invest (and i'll keep an additional reserve of $20k cash) and am on a fairly high income so hoping to save $1000/week and invest about $25k half-yearly for further reinvestment and rebalancing. My overall goal is to invest my way to financial freedom within about 10 years.
I am leaning away from VTS and VEU, mainly because of no DRP, and from what I have read there are some forms involved and overall a bit of a hassal (and i don't fully understand why the currency is in USD). I was thinking along the following lines:
VAF (20%) - Decided on 20% bonds / 80% stocks
VAP (10%) - REIT for diversification and low correlation
VAS (20%) - Diversify in large Aussie shares (makes up 20% of my 30% allocation to Aussie shares)
VSO (10%) - Diversify into small cap Aussie shares
VGS (30%) - Get that international allocation (~20% US stocks and 10% non-US/Europe, unhedged)
VGE (10%) - Emerging markets (further global diversification)
Does anyone have any comments on this? Specifically i have a few issues to sort:
- Is 40% to international a good allocation? I realise Aussie market is only 3%, but i also realise the tax benefits of franked dividends for aussie investors
- Is the 10% allocation to small caps a good way to diversify here? Hopefully the correlation to Aussie large caps gives an additional diversification benefit and presuming there is no overlap in securities
- Is 10% to REIT a good allocation? I do not plan on owning my own home nor investment property, i will probably just rent my whole life
- 10% to emerging markets?
If anyone has any advice for me to consider i'd love to hear it before i take the plunge!