Planning to set up a portfolio

[belgo]

Thank you Dualstow.  I can see now that I actually need the higher volatility of the broader index compared to the lower volatility of dividend stocks to keep the overall volatility of the PP low.

[sophie]

Dividend stocks are in fact less volatile - just compare the S&P 500, which is dividend payer heavy, to small caps.

That said, I have started to buy individual stocks for the "deep" part of the stock portfolio (max of 1/3).  I haven't really thought about rebalancing, but my idea was that owning directly is a hedge against potential issues with index funds, such as front running.  I'm also concerned about having a lot of eggs in a very small number of baskets.

I was thinking to concentrate on dividend stocks for this collection, and compensate by putting an equal part of the stock allocation into a small cap index fund.  It's not exactly the path to simplicity though.