I’m opening a Roth IRA for 2020 today with Vanguard and was wondering about different asset allocation strategies. This last week I’ve been reading a number of basic guides, Bogleheads, Bernstein’s “If You Can”, etc, and many of them suggest something close to a simple 33/33/33 split with Total US, Total International, and Total US Bond index fund investments.
I also looked through Vanguard’s Targeted Date funds and spreadsheeted the change in allocation from the 2055 (my planned retirement date) to 2025 fund. These funds start with a higher risk allocation consisting of only ~10% bond funds, and obviously decrease in risk over the years.
So, my question: should I go with a simple split which I’ll retain for the duration of the Roth IRA and rebalance annually to maintain the same allocation? Or, should I use the allocation strategy of a Target Date fund where I’ll change my allocation based on nearness to my retirement (and thereby avoid the higher expense ratio of the actual Target Date funds)?
Hopefully that is a sensible question. I’m new to trying to figure out the world of finance. Thank you in advance!