Vanguard Balanced Index Fund Adm or Vanguard STAR Fund

[kave]

Good Morning! Is anyone familiar with these two subject Vanguard Funds? LOML retired July 10th. We moved her 401-K into her Vanguard IRA. She leans more conservative in her investment thinking than I so we are looking at the two subject funds for the vast majority of her IRA. She has purchased some AT&T primarily because it was just a few dollars off the 52 week low and the +/- 7% dividend. To be perfectly clear, we are not looking to do anything with the bulk of her IRA till later in the year. We both feel there is some pain to come with the markets in the short term. We are simply trying to do our home work for when we dive in.

Also, we would appreciate any other recommendations within the Vanguard family.

Thanks in advance,
Kave

 

[Bullitt]

Both STAR and Balanced Fund are 60% stocks and 40% bonds and are fine one stop shops to investing. You could get away with using just one of them.

Balanced Fund has drastically outperformed STAR in the past 10 years and much of that is because STAR is a fund of funds. Balanced Fund is an index built on individual stocks.

I'd pick Balanced Fund because STAR is dependent on manager stock selection whereas Balanced will just try to mimic an indexed portfolio (60% Wilshire 5000 / 40% Lehman Bond (AGG)).

 

[NatInPW]

I've been watching a lot of the late Jack Bogle's interviews lately, and it seems he likes about a 60/40 stock/bond split generally, although he does admit to acting like a market timer when conditions dictate (although I've never heard him recommend leaving stocks completely).

I guess I'm not sure what he (and others) actually mean by "bonds" in this context. I suspect they do not mean investments like the F or G funds in the TSP.

Just curious, but when Bogle/others recommend a bond index fund in a stock/bond split scenario, are they generally thinking of AGG/Lehman type investments, or are they focused more on other govt/corporate bond funds?

 

[Bullitt]

G fund is very unique and not offered to the public via ETF or fund per say. G fund is different in that it is debt issued directly to TSP. Most bogleheads recommend a fund like BND which is majority treasuries and government backed mortgage (Fannie/Freddie), but seem to have praise for the G fund.

F is mostly government debt but also has mortgage and some corporate in there as well.

I have half my bonds allocated to F and the other half to G.