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You're ready to invest for retirement, but can’t seem to figure out the right investments to use. You want to ensure that your portfolio is adequately diversified so you have a higher chance of success, yet there seems to be too many moving parts and too many options to figure out just what is the right investment choice for you. 

Using a basic asset allocation plan and some broad-market index funds can help you assemble a diversified portfolio without the stress of deciding from thousands of investments. Even better is that you can find these index funds as mutual funds or exchange-traded funds (ETFs) so you can invest with your preferred investment instrument.

The Charles Schwab Corp. is one company that offers both the mutual funds and ETFs, allowing you to invest with just three to five funds at one company. You can achieve diversification while keeping everything in one place. (For related reading, see: Finding the Right Mutual Fund: Top Tips.)

The funds below will help you properly allocate your money for retirement using just a few of Charles Schwab’s best investments.

US. Stocks

The Charles Schwab Total Stock Market Index (SWTSX) mutual fund buys almost the entire U.S. stock market. It has more than 2,400 stock holdings. This allows you to invest in large, medium and small capitalization stocks with just one investment instead of three or more mutual funds — for a low expense ratio of 0.09%

There is also an ETF version of this fund called the Charles Schwab US Broad Market (SCHB). This one is cheap, with fees of just 0.04%. 

International Stocks

The Schwab International Index (SWISX) covers a large cap stocks in developed markets. The mutual fund has an expense ratio of 0.19%. The ETF version of this is the Schwab International Equity (SCHF) and has an expense ratio of only 0.08%.

If you want emerging markets, you will have to add the Schwab Fundamental Emerging Markets Large Company (SFENX). This is a fundamental index but still comes with a low fee of only 0.49%. It does also include some development markets, so it is not a pure emerging markets play.

The ETF version of an emerging markets index is the Schwab Emerging Markets ETF (SCHE). This one has more emerging market exposure than the mutual fund version, and with a cost of only 0.14%, it may be a better option for adding a bit of emerging markets exposure. (For relared reading, see: Benchmark Your Returns With Indexes.)


The Charles Schwab Total Bond Market Index Fund (SWLBX) will give you exposure to almost every area of the U.S. bond market including government bonds and corporate bonds of maturities varying from short term to long term. The expense ratio is only 0.29%.

The EFT version of this fund is the Schwab US Aggregate Bond EFT (SCHZ); it has an expense ratio of 0.05%.

Specialty Funds

Finally, Charles Schwab does offer many other specialty investments that you can add to your portfolio to fit your needs and investing beliefs. Examples include the Schwab Small Cap Index (SWSSX) for those wanting more exposure to small companies, Fundamental Global Real Estate (SFREX) for customers looking for more real estate plays and the Schwab US Tips ETF (SCHP) for added exposure to inflation-adjusted bonds.

The Bottom Line

Most top fund companies, Schwab included, will have a roster of funds that will provide suitable options for all investors. By using low cost index funds that cover all your asset allocation needs and working with one provider, you're making saving for retirement somewhat easier. (For related reading, see: Are Your ETFs Too Risky? Learn How to Evaluate Them.)

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