Lazy Portfolio for 401k

• Hold the Institutional Index and Extended Market funds in an 80 / 20 ratio, to track the entire US stock market (section “Age-based Bond / Stock Ratio”)
• Hold the Developed Market and Emerging Market funds in a 75 / 25 ratio, to track the entire ex-US stock market
• Hold your US stocks and ex-US stocks in a 60 / 40 ratio

• Pick a stock / bond ratio per your need, capacity, and tolerance for risk:

  • If you’re just starting out, use 90 / 10 as your baseline.
  • If you’re nearing retirement, use 60 / 40 as your baseline
  • Otherwise, use a ratio in between, such as 80 / 20 or 70 / 30
• A real estate investment trust (REIT) behaves like a third asset class, so consider using it as a portfolio diversifier. Use 5% of your portfolio as your baseline REIT allocation (take it from your stock allocation).

If retirement is 25 or more years away, your income already rides on one employer’s stock, and you can hold a 100% equity portfolio through a halving without selling, the simplest structure is the right one: a global fund such as VT, or VTI with an ex-US fund, plus VNQ if you want the REIT sleeve. It works because it minimizes decisions, not because it maximizes return. If that drawdown is more than you will tolerate, a 70/30 split is the resilient alternative. Rebalance every one to two years and revisit the plan at marriage, children, and a change of employer, not at market moves.

For more information on stock/bond asset allocation, see the Bogleheads article on Asset Allocation.