Seeking some set-up guidance

[scubablue]

Greetings all- first posting although I have following the boards for some time and have read Craig's awesome book (some parts several times).  I am a long time investor primarily in Vanguard index funds with a smattering of TRowe Price and PRPFX.  Quite happy with all results overall.  Am anxious to implement a HB PP to complement and perhaps eventually replace my other holdings.  A couple of questions I've researched thru this forum and the book but am still not sure of the best path.  First is the cash holding- I do have a TD account and used to buy TBills regularly until the abysmal rates led me to CDs.  For those laddering treasuries, what lengths are you using?  Obviously to keep them under a year one would go 3,6, 12 months and perhaps 1,2 years.  It seems that this would be difficult to draw funds from as needed (I am about to retire) as opposed to using SHY or VGSH (no fees with Vanguard). Second dilemma involves stocks- I currently have holdings in VTSAX which I would keep separate for now.  Investing in VTI seems a bit redundant and although I also hold VTIAX, I am considering using VT to introduce a new investment into my PP.  Anyone have experience using VT vs. VTI with good results?  Last question is regarding bonds-It seems TLT is the standard but reading the prospectus for VGLT shows 99% in LT treasuries and again no transaction fees.  Any input is greatly appreciated!! Thx!

[rhymenocerous]

1. I'm still accumulating so I'm not laddering Treasuries for cash because I'm forced to hold them in my 401k.  Nevertheless, for someone about to retire, I think you could take a layered approach.  Keep an online savings/checking account you can sweep money to to use for expenses.  You could then have a "deeper" cash portion that you don't need to touch right away filled with CDs, I-Bonds, and T-Bills.  The length of the ladder depends on how much interest rate risk you want to take.  You could go out 1 year, 3 years, or even 5 years I think.

2. Adding VTI when you already have VTSAX is redundant; they are the same thing.  Also, don't use VT.  It is less diversified than holding both VTSAX and VTIAX.  VTSAX has 3,278 stocks and VTIAX has 6,214 stocks.  VT on the other hand only holds 3,913 stocks (I know it's definitely missing intl smallcap, which VTIAX holds).  Also keep in mind that when you invest in international funds, you are taking on currency risk.

3. VGLT is not as pure as TLT.  It holds goverment and agency bonds, meaning mortgages and some other types of bonds.  I would just buy the treasuries directly from Vanguard for no fee.  It's very easy, you'll know exactly what you have, and there's no manager risk, repurchase agreements, or expense ratios.