<prompt> Human: All of my stock investments are currently held in Vanguards mid-cap index fund VIMAX, which is a third of my total investments the rest held in a Roth IRA and bond fund and equates to approximately 40k. I really like index funds and this one in particular but my question is if it would be wiser to spread load the 40k amongst different index funds and if so, what should I be considering?  <response>: Try to read up on the 3 fund portfolio. The idea isnt that index funds are good, the idea is that spreading your investments over a wide range of asset classes gives you diversity that helps smooth out the irregular bumps of the market. Your specialized mid-cap index fund is only invested in a narrow slice of mid-cap equities. No bonds fixed income. No international. No large or small equities. You may do well with it if this happens to be a year in which mid-caps outperform other asset classes, but that is not guaranteed. It is guaranteed that some years mid caps will do better than other assets and some years worse. So buy other funds too, to cover the asset classes you are missing. 