Livesoft,
I meant relative tax inefficiency because small cap value is less tax efficient than the total stock market due to higher turnover. Do you think that the difference in tax cost between the two is negligible?
I currently have all vanguard funds and not ETF's because I make monthly contributions and wanted to avoid the brokerage fee. I see that the small cap value fund has an ER of 0.37% while the ETF is only 0.23%... I'll have to see if the lower ER makes up for the brokerage fee. I also don't have a brokerage account and don't know if I want to set one up just to hold the small cap value fund...
Search found 20 matches
- Sun Aug 14, 2011 12:08 pm
- Forum: Personal Investments
- Topic: Is Small Cap Value in Taxable worth it?
- Replies: 11
- Views: 3329
- Sun Aug 14, 2011 11:38 am
- Forum: Personal Investments
- Topic: Is Small Cap Value in Taxable worth it?
- Replies: 11
- Views: 3329
Is Small Cap Value in Taxable worth it?
I currently own U.S. stocks in the market weighing but have been considering adding a small value tilt. I have no room in my ROTH IRA because it is taken up by REITS and TIPS. The only domestic equity options in my 401K are the S&P 500 Index and the extended market index, which is essentially equivalent to Vanguard's VEXMX.
What do Bogleheads think about owning Vanguard's small cap value fund (VISVX) in a taxable account? Do you think the small/value premium overcomes the tax inefficiency of the fund? If not, should I consider over-weighing the extended market in my 401K to get some "small" tilt benefit?
What do Bogleheads think about owning Vanguard's small cap value fund (VISVX) in a taxable account? Do you think the small/value premium overcomes the tax inefficiency of the fund? If not, should I consider over-weighing the extended market in my 401K to get some "small" tilt benefit?
- Mon Jan 03, 2011 8:47 pm
- Forum: Investing - Theory, News & General
- Topic: How Many Funds
- Replies: 60
- Views: 11212
- Mon Jan 03, 2011 8:43 pm
- Forum: Personal Consumer Issues
- Topic: anyone know of a good iPhone budget app?
- Replies: 32
- Views: 4714
Another vote for Mint.com. I've been using it for a few years now and have been very pleased. It is very easy to use once you have all of your accounts set up and has pretty good budgeting and reporting capabilities. It's not nearly as good for tracking investments because all of my Vanguard index funds show up as 100% index funds in stock allocations. Gee thanks...
- Mon Jan 03, 2011 8:33 pm
- Forum: Personal Consumer Issues
- Topic: Met Life Annuity
- Replies: 11
- Views: 2941
There is no such thing as a free lunch, i.e. guaranteed returns without risk. I got my mother out of an indexed annuity variable annuity that was extremely difficult to understand. In the end, I determined that they were correct, my mother could not lose any money. However, she wasn't going to make any money either after the fees! I am now of the belief that one shouldn't mix insurance with investing. I'm not sure exactly what the "catch" is with your product but there has to be a downside that's more trouble than it's worth or salespeople wouldn't try to push them on everyone. It's amazing how many people fall prey to the simple words, "you can never lose your money". If you want to participate in the market's returns, ...
- Mon Jan 03, 2011 8:21 pm
- Forum: Investing - Theory, News & General
- Topic: REITs
- Replies: 53
- Views: 7743
I target having 10% of my equities in REIT's for the diversification benefit and, hopefully, higher returns in the long run. I'm under 10% now but am too nervous to rebalance given the recent run up. I normally don't try to time anything but I am going to stay at my current allocation for a while because I just don't see the urgency of going up to 10% right now...
- Sun Jan 02, 2011 10:50 am
- Forum: Investing - Theory, News & General
- Topic: What everyone knew would happen -- but didn't?
- Replies: 29
- Views: 3673
The more I learn about bonds, the more I am convinced that all I need to own are the Vanguard Total Bond Market Index Fund and the Vanguard TIPS fund. It is precisely when everyone "knows" something will happen that we need to remember to stay the course. If successfully timing the stock market over the long run is next to impossible, then timing the bond market is practically impossible. I don't believe that we are in a bond bubble in the way that we've hit stock bubbles in the past. Bond returns have been reasonable over the past few years and, sure, we may see modest NAV losses when interest rates rise but these will be overshadowed by increasing yields as the low-interest rate bonds expire and are replaced with higher yielding...
- Sun Jan 02, 2011 10:14 am
- Forum: Personal Investments
- Topic: picking stocks for fun fund?
- Replies: 9
- Views: 1285
I don't have play money. A "play" dollar and a "real" dollar are worth exactly the same. For me personally, trading stocks in of itself is not fun. Sure, trading stocks and making some money would be fun! Trading stocks and losing money would certainly not be fun. Over the long run I'm sure that I would lose "play" money (read: real money) trading stocks. Hence, no fun for me! I'm not saying this is the case for everybody but just wanted to share my personal rationale.
- Fri Oct 29, 2010 7:50 pm
- Forum: Personal Investments
- Topic: Did I elect to use average basis or not?
- Replies: 34
- Views: 3754
I believe if you sold all of the shares in the same year then specific identification and average cost basis would yield exactly the same results. Therefore, I don't think that reporting the sale of all shares of a fund necessarily means that you used one method or another. I'll let others post but I'd say that you're okay to use specific identification in the future....
- Mon Oct 25, 2010 9:07 pm
- Forum: Investing - Theory, News & General
- Topic: VFWIX to VGTSX, locking in capital gains
- Replies: 5
- Views: 1403
- Mon Oct 25, 2010 9:05 pm
- Forum: Personal Investments
- Topic: Where To Invest Cash
- Replies: 7
- Views: 2849
If you want this money truly invested in "cash" (meaning risk-free) then bond funds would be inappropriate. Bond funds of any duration can result in loss of principal. How about 5 year CD's at Ally that currently yield 2.5%? I have found that longterm CD's are a much better deal in today's environment than high yield online savings accounts. You don't have to keep them for 5 years - the cancellation penalty is only 60 days worth of interest. Make sure to stay under $250,000 to keep all your cash FDIC insured. Long-term CD's are the highest risk-free rate that you can get in today's environment. Chasing higher returns will involve assuming higher risk so make sure that you are okay with that before investing in bonds or other inves...
- Mon Oct 25, 2010 8:42 pm
- Forum: Personal Consumer Issues
- Topic: Razor Update
- Replies: 62
- Views: 12066
Drying Gillette Fusion razors with a paper towel has worked incredibly well for me. I used to go through a razor after about 4 uses. (I have very thick facial hair and it used to cut my skin badly). I've started drying the razor with a paper towel after every use and have been able to make them last about three weeks or 20 uses. Easy to do and highly recommended. I could probably make it last longer but eventually the lubrication strip wears away completely.
- Sun Oct 24, 2010 12:09 pm
- Forum: Personal Investments
- Topic: Bond funds: Is now a bad time to buy?
- Replies: 3
- Views: 1343
- Sun Oct 24, 2010 12:03 pm
- Forum: Personal Finance (Not Investing)
- Topic: VCDAX vs CD
- Replies: 7
- Views: 1198
Re: VCDAX vs CD
There is no such thing as "outside of the risk". Investing IS all about risk. If we did not care about risk we would all be holding 100% ultra-aggressive stocks. Comparing CD's to a volatile sector fund does not make sense at all.HandlebarMustache wrote:Good afternoon to all. Would there be a drawback to using a fund such as VCDAX or VGPMX as opposed to purchasing a 10 year CD? The return is better, the early withdrawal penalty is similar and outside of the risk it would seem to be a better strategy.
Cordially, lou
- Sun Oct 24, 2010 11:59 am
- Forum: Investing - Theory, News & General
- Topic: Proportions of VFINX and VEXMX to equal VTSMX?
- Replies: 15
- Views: 4885
I think it makes sense to sell the S&P 500 and buy the VG total stock market index because this accomplishes your goal of simplifying your portfolio and adds additional capital losses. You say that you already have capital losses but they never expire so you'll be able to use them eventually.
Just from a simplicity standpoint, it still makes sense to just hold the VTSMX. Another benefit of holding just VTSMX instead of VTSMX + S&P500 & Extended market is that having a larger VTSMX might qualify you for admiral shares. (VTSAX with a new minimum of $10k).
Just from a simplicity standpoint, it still makes sense to just hold the VTSMX. Another benefit of holding just VTSMX instead of VTSMX + S&P500 & Extended market is that having a larger VTSMX might qualify you for admiral shares. (VTSAX with a new minimum of $10k).
- Sun Oct 24, 2010 11:52 am
- Forum: Personal Investments
- Topic: New Member - Portfolio for Review
- Replies: 5
- Views: 1440
Thanks NatureExplorer! I am an extremely aggressive saver. I work very hard for my money and am not careless with it. I still struggle with the paying down debt vs. investing debate. I understand that investing in taxable accounts instead of paying down a mortgage or car loan is borrowing money to invest. However, at 3.39% APR car loan and after-tax 3.5% mortgage (based on 28% income tax bracket and itemized deductions - not exact but close enough) is it such a bad idea to invest in my taxable account instead? Bonds in today's environment will not have these kind of returns but I think it's reasonable to believe that we will come back to more historical returns within the next 5 years. My current Ally CD's are at 3% which is 2.16% after tax...
- Sun Oct 24, 2010 11:37 am
- Forum: Personal Investments
- Topic: Emergency Fund Question...
- Replies: 4
- Views: 1293
Completely agree with Laura. You do not want to take any risks with your emergency fund. Most people (including myself) would be thrilled to obtain that kind of return with their emergency fund! A commodities or any other stock fund is inappropriate because it is too volatile. Remember that the idea of an emergency fund is that it is there whenever you need it. The time when you need it may come in a deep recession when you lost your job and commodities are down 50%. The worst thing that can happen is losing your emergency fund at the time when you need it most. The only thing I would do is make sure that the emergency fund is of the appropriate size. Most people agree that 6 months of living expenses is sufficient so perhaps you can shift ...
- Sat Oct 23, 2010 12:01 pm
- Forum: Personal Investments
- Topic: New Member - Portfolio for Review
- Replies: 5
- Views: 1440
New Member - Portfolio for Review
I am a new boglehead and have learned a lot from reading the posts on this blog. As a young investor, I think that finding this blog is the best thing that could have happened to me. I am a 100% believer in the boglehead investing philosophy and am incredibly thankful that I learned these principles early in my investing career! This is my first real post so feel free to make suggestions. Emergency funds: 6+ months of expenses (~$20K) 25% in Ally interest checking at 0.5% 25% in Ally savings at 1.3% 50% in Ally 5 year CD's at 3% (60 days worth of interest early cancellation penalty) Debt: Car Loan = $22k at 3.39% Mortgage = $165k at 4.875% Tax Filing Status: Single Tax Rate: 28% Federal 6% State Age: 26 Desired Asset allocation: (80% stocks...
- Mon Jul 05, 2010 8:14 pm
- Forum: Personal Investments
- Topic: Opening Ally bank CD's - Best Strategy?
- Replies: 2
- Views: 1711
Opening Ally bank CD's - Best Strategy?
I recently opened an Ally checking and savings account with the intention of opening Ally CD's. I intend to invest in 5 year CD's that are currently yielding 2.95% but will likely close them early if I need the cash or if interest rates go up and Ally starts offering better 5 year CD rates. (I am aware of the 60 days worth of interest early cancellation policy). My question is this: I have about $10,000 that I want to invest in CD's that is part of my emergency fund. What are the pros/cons of opening several small CD's versus a few bigger ones? Ally has no fees on CD's and no minimums. It seems like about ten $1,000 CD's would give me the most flexibility if I needed to withdraw the funds in an emergency. Are there any downsides to this str...
- Mon Jul 05, 2010 2:06 pm
- Forum: US Chapters
- Topic: Anyone in the New Orleans area?
- Replies: 39
- Views: 16672