Originally Posted by Amnorix
Read Malkiel, but all else being equal, I might do something like a total market index, a REIT index, an international index, and a bond index. Say 10% on the REIT and 30% on the rest.
That gives you quite a bit of diversity. You'd be somewhat less in domestic stocks than I would like for a person just starting out, however, but that's better, I think, than just doing 100% in a total market index.
I would break up the US index funds into large cap/small cap (as mentioned in my other post). You can break the international equities into developed and emerging markets. REITs are good because they give you exposure to real estate. I would add in something in a commodities fund.
My investment portfolio looked something like this:
20% US Bond Index
10% Emerging Markets Bond Index
20% MSCI-EAFE stock index
10% Commodities Index
I avoided real estate as that was during the free-fall of 2009.