conversation: User (dimideme): "Hello, I'm 30 years old, living in New Jersey with a good, steady job and no kids.  I've been investing steadily in my company's 401k, and since I read A Random Walk Down Wall Street last year, I've started a personal investment account with Fidelity in order to start investing in index funds.  I have a separate savings account with sufficient funds for a house down payment and for emergencies, so I don't foresee any reason to touch these funds for the near future.  I'm following a 75/25 split between equities and bonds - here's a breakdown for my Fidelity account:\n\n45% Spartan Total Market (US) Index Fund\n\n10% Spartan International Index Fund\n\n5% Spartan Emerging Market Index Fund\n\n15% Fidelity Real Estate Index Fund\n\n10% Spartan US Bond Index Fund\n\n15% Fidelity New Jersey Municipal Income Fund\n\nMy 401k asset allocation is the same (different funds, but they track they same indices), except the 25% allocated to bonds are entirely in a US bond index fund.\n\nI'm fairly confident in this allocation based on what I've read, but I'm interested in any new ideas or suggestions, especially when it comes to bond funds, which I have to admit I don't understand as well as I do stock funds.  For example, Fidelity also offers targeted Short/Intermediate/Long term treasury bond index funds, and an Inflation-Protected Bond Index fund, but I'm not sure how beneficial it might be for me to tilt my bonds share toward any of these funds.  Any thoughts?  And is it overly risky to have such a high proportion of my bond money in New Jersey, or is it a good, safe way to reduce tax costs? \n\nAnd finally, I'm interested in an idea I've read about a bit on these boards - allocating a very small portion to gold or some other commodity as a portfolio stabilizer.  Think it might be a good idea in my case?\n\nAny ideas or suggestions?  Thanks very much."
  Self: "1. Why no IRAs?\n2. I would try to get bonds out of your taxable account and into the 401k as much as possible. You'll pay less in taxes and that helps over the long run. http://www.bogleheads.org/wiki/Principles_of_Tax-Efficient_Fund_Placement\n3. Common recommendations for TIPS usually run in the range of 25-50% of your bond allocation. Many people have none. It doesn't make a huge difference really. TIPS protect against *unexpected* inflation, but at a small cost -- if inflation simply goes as expected (as it does much of the time), they'll return a bit less than nominal bonds. So it's sort of an inflation hedge."
  User (dimideme): "No IRAs because I have been ignorant about them until now  :)  But that will soon be rectified, thanks for the tip!\n\nGreat suggestions regarding tax-efficiency and TIPS allocation.  Unfortunately my 401k only allows contributions/rebalancing in increments of 5%, so my plan is to have bonds as 10% and TIPS as 5% of my overall portfolio, giving me a 33/67 split, which seems to fit well with accepted wisdom."
  