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All-Index Portfolio
By Jonathan D. Pond, January & February 2007
Think diversification
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Creating an index fund portfolio with as few as four fund categories will carry you relatively smoothly through the periodic—and unpredictable—ups and downs of the market. Diversifying your investments in this way increases the likelihood that some of your money will always be thriving, and too much won’t be diving.
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Index Fund Category | Percentage |
| Large-Cap Stock | 25 |
| Small-Cap Stock | 20 |
| International Stock | 15 |
| Total Bond Market | 40 |
Index Fund Sources
More than 600 index funds are available to U.S. investors, and scores of companies now offer them. Vanguard, Fidelity, and Charles Schwab do the biggest business in index funds. The latest convenience for investors: lifestyle funds, which give you a diversified portfolio with one purchase. Most of Vanguard’s and Schwab’s lifestyle funds are composed of index funds. AARP Financial, a separate entity from AARP that licenses its name, offers three lifestyle funds—conservative (more bond funds, fewer stock funds), moderate, and aggressive—that consist of nothing but index funds. For more information contact:
Vanguard 877-662-7447; www.vanguard.com
Fidelity 800-544-6666; www.fidelity.com
Charles Schwab 866-232-9890; www.schwab.com
AARP Financial 800-958-6457; www.aarpfinancial.com
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