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I am planning on adding an international fund in about 4-5 months. Right now, I have about $4,000 in vanguard's S&P 500 index fund. For the next 4 months or so I plan on contributing an additional $2000 or so and then selling $3000 of the S&P 500 index in order to fund opening an international fund. Now, would this create any sort of high fees/expenses that would make this move a bad decision? Also, the international fund I am looking into is vanguard total international stock index. Do you guys think this is the best vanguard international fund for me given what I have allready said previously. If I did this, the allocation of us/international would be about 1/1. Do you think there is a better vanguard international fund for me? Maybe just the emerging markets fund? What do you guys think?
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Assuming this is in a retirement account, it shouldn't create any major problems to sell the S&P 500 fund. I think they limit you from rebuying any more shares of the S&P 500 for 3 months after the sale to prevent frequent trading.
Have you looked at VHGEX? It is actively managed but the expense ratio is only .64%. It is about 40% in North America, with 30% Europe, 15% Pacific, and 11% Emerging Markets. That, combined with the $3000 in the S&P 500 would give you a more balanced asset allocation, still about 75% US stocks, and allow you a bit of emerging markets. Then as you add more $ to the account you can be a bit more specific about your fund choices.
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