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Long time follower, posting for 1st time. During the last few years, I tried my hand at diversifying the portfolio and now have unwieldy portfolio. One of the goals for 2023 is to simplify and eventually towards an 80/20 VTI-BND portfolio. However I do not want to do all of them overnight in one go and structurally move them in a meaningful way. Which of these would you recommend targeting to sell for 2023. Symbol - Description - Quantity BND - Vanguard Total Bond Market ETF - 104.237 BNDX - Vanguard Total International Bond ETF - 68.084 IVOO - Vanguard S&P Mid-Cap 400 ETF - 205.282 MGK - Vanguard Mega Cap Growth ETF - 495.023 VBK - Vanguard Small-Cap Growth ETF - 72.661 VEA - Vanguard FTSE Developed Markets ETF - 209.047 VIOO - Vangua...

investor9999 wrote: ↑Fri Mar 24, 2023 5:14 pm
@mkc - this is for a Roth IRA, not a taxable account - I should have said that.

Yeah, I'd just get FSKAX - Fidelity Total Market index to keep it simple.

You can see from this comparison they are virtually identical and have returns so identical it looks like there is only one stock on the graph.

https://www.portfoliovisualizer.com/fun ... bols=VTSAX

exodusNH wrote: ↑Fri Mar 24, 2023 11:55 am

the_wiki wrote: ↑Fri Mar 24, 2023 11:47 am Paying a double first payment seems like an odd strategy because it implies you could have just made a larger down payment.

This is sometimes a requirement to get on the biweekly payment schedule.

Correct me if I am wrong, but I thought the first "double" payment is generally just a regular monthly full payment as scheduled. It's only double relative to the 1/2 payments you will be making biweekly going forward.

Paying a double first payment seems like an odd strategy because it implies you could have just made a larger down payment.

Paying half your payment every two weeks is a trick to get get an extra payment made over each year. You could also just pay 1/12 extra each month and end up at the same total payment.

With current rates, paying off your mortgage early is likely to be higher after-tax returns than investing, so any tricks that get you there are probably not bad advice.

Hello. I work for a big corp and have a traditional 401k through Fidelity but the funds I was invested in was changed on 8/8/22. Old investment: Fidelity® 500 Index Fund Ticker: FXAIX Gross Expense Ratio: 0.0150% (85% allocation). Old investment: Vanguard Small-Cap Index Fund Institutional Plus Shares Ticker: VSCPX Gross Expense Ratio: 0.03% (15% allocation). New investment: Spartan® 500 Index Pool Class F Ticker: N/A Gross Expense Information: 0.0075% (85% allocation). New investment: Small Cap Index Fund Ticker: N/A Gross Expense Information: 0.028% (15% allocation). It picked the closest fund to put in from old to new and does have a lower ER. Should I stick to these funds and allocation? I chose the old 2 funds and allocations based on...

I had to do this recently with a 4-5 day window out of the market, and I just did 25% per week for 4 weeks to hedge my bets. I think I ended up about .5% ahead. But if I would have picked the wrong window in that month with 100% out I would have lost close to $10k.

This question I suppose concerns a corollary of dollar cost averaging. I've seen the posts that lump sum investing seems to perform better than dollar cost averaging. But how about when it comes time to make withdrawals during retirement? Is it better to take a lump sum once per year or take withdrawals on a monthly or even bi-weekly basis? The reason why lump sum is statistically superior to DCA is normally attributed to "time in the market". That means that waiting a long as possible to withdrawal should also be superior to large withdrawals at the start of the year. In other words, DCA out is superior to lump sum out! "time in the market" is a positive factor when talking about long term investing, but it is generall...

Fund a mortgage for someone?

Multi-Year Guaranteed Annuities are still paying about 5.5% for 5-10 year terms. They are guaranteed income through insurance companies. Might be something to consider.

cat5 wrote: ↑Thu Mar 23, 2023 10:00 am Did I make a mistake by having VTSAX AND VTI in the same taxable account?

VTSAX = approximately 60% of portfolio
VTI = " 20%

I do not contribute to VTI anymore, but make regular contributions to VTSAX.

Thanks you,
cat5

They are literally two forms of the exact same fund, so really you just have 80% of your portfolio in VTSAX. Think of them as one asset with different tax lots.

Nothing particularly wrong with that, just make sure you actually wanted 80% in total stock market fund in this account

Interesting, thanks for the reply.

I still maintain S&P was created as a total market fund and continues to be one today. You don't always have to hold all possible stocks in a particular universe to get the returns of that specific factor.

I may have been mistaken on how they arrived at 500 stocks, but I don't think it invalidates my claim.

Wealthfront offers $2 million FDIC ($4mil joint) for their cash/savings by spreading your money across 8 banks. They just bumped their rate up to 4.3%.

https://support.wealthfront.com/hc/en-u ... h-Accounts

nisiprius wrote: ↑Wed Mar 22, 2023 5:23 pm

the_wiki wrote: ↑Wed Mar 22, 2023 5:13 pm The S&P 500 is a "Total Stock Market" fund.

It was designed specifically to represent the returns of the entire U.S. stock market. They determined 500 was enough stocks to capture the entire markets returns. And looking at the historical returns of S&P500 vs newer indexes holding 2-10x as many stocks, they were not wrong.

They didn't "determine that 500 stocks was enough," it was just the most they could do with the computers they had in 1957.

Do you have a source for that claim? I cannot find any reference to that with web searches.

Sometimes people are scared for a reason. Just because others are fearful of a failing bank doesn't make it a good investment. You still have to do your homework, and Buffet has a team of Ivy League grads to do that for him.

Thinking about this a little more, I'm feeling like a pull makes more sense from a security perspective. Then everything is only linked to the main credit union and nothing else. And anyone that gets into the credit union has access to nothing else.

Obviously exceptions require exceptions, but as a rule that sounds to be a safer strategy than having CU able to clean out all the other accounts from one place.

The S&P 500 is a "Total Stock Market" fund.

It was designed specifically to represent the returns of the entire U.S. stock market. They determined 500 was enough stocks to capture the entire markets returns. And looking at the historical returns of S&P500 vs newer indexes holding 2-10x as many stocks, they were not wrong.

whodidntante wrote: ↑Wed Mar 22, 2023 12:51 am The mega caps tend to trip themselves over their extremely large feet. So I think just avoiding those would improve a portfolio. However, owning mid caps with a quality filter would do that just fine, since an S&P 500 fund minus clown shoe companies seems elusive. There seems to be a bit of a small cap boost as well, also with a quality filter. Extended market funds and the Russell 2000 seem to be an eternal dumpster fire.

Vanguard's Mid Cap (VO) is pretty close as it is a "large" mid-cap that holds about 270 of the S&P500 stocks.

retired@50 wrote: ↑Wed Mar 22, 2023 9:25 am

sheople2 wrote: ↑Wed Mar 22, 2023 9:08 am What is the name of the older Vanguard chart...

It's like a YTD history showing several decades via pie charts of stocks/bonds and their respective estimated YTD.
Vanguard on the phone couldn't help me without the name, which I would just then put into their search.

The site has totally changed, so the tools I was familiar with are not appearing - at least not without the right title.
Thank you.

Is this what you mean?

See link for historical performance averages of a variety of portfolio mixtures.
https://investor.vanguard.com/investor- ... allocation

Regards,

They need to update it with 2022 results. I think it might really change the results for the majority bond portfolios.

I might look at iShares Core Allocation ETF funds:

https://www.ishares.com/us/literature/p ... -brief.pdf

BogleFan510 wrote: ↑Tue Mar 21, 2023 11:11 am

bshnew wrote: ↑Tue Mar 21, 2023 10:47 am Would adding SCHB, Schwab's total US market ETF, unnecessarily complicate my portfolio?

Dont think so. It might change expected returns and volatility, as a bond fund. I also hold SCHB. It is a solid bond ETF, though perhaps vanguard bond fund is a slightly better long term performer, with some small tax advantages.

SCHB is a total market fund like VTI - all stock, no bonds.

bshnew wrote: ↑Tue Mar 21, 2023 10:47 am Would adding SCHB, Schwab's total US market ETF, unnecessarily complicate my portfolio?

SCHB is "total market", so in additional to holding all the large companies like SCHX it has about 15% in smaller and mid size companies. But that means about 85% of it is still identical to SCHX and SWPPX. So I wouldn't say it's really a productive addition. The returns end up being very similar to SCHX.

If you want to get closer to a total market, you'd probably be better off just adding a small cap fund rather than adding SCHB. For small cap from schwab you could do SWSSX for a mutual fund or SCHA for an ETF. Building that up to about an 85/15 ratio with your SWPPX and SCHX would be about the same as converting everything to SCHB.

My apologies for not including the full fund names. Here they are: SCHX = Schwab US Large-Cap ETF, expense ratio 0.03% SWPPX - Schwab S&P 500 index fund, expense ratio 0.02% Brooke Both are Large cap US stock funds holding mainly the same exact stocks and can be considered identical with regards to expected returns. The fees are close enough to not matter. So the only deciding factor is mutual fund vs ETF Dollar cost averaging is easier with mutual funds because you invest with dollars not shares. So you can invest exactly the amount you want and not some multiple of share price. That would make the mutual fund more convenient. Taxes are a little friendlier with ETF because they usually have less dividends and capital gains. So you may...

There is really no good cash sweep option at Etrade so it's going to be manual movement. They only pay 0.15% on uninvested cash.

Money market funds can earn a bit more but they trade like Mutual funds and it will take overnight to get back to cash out and available for trading. So if you were leaving it waiting for a market drop or something to re-enter, you could miss your desired window waiting until next day.

Here's a few of the better ones I found with a quick screen:

VMRXX 4.55%
FUGXX 4.51%
GABXX 4.6%

If you want it available for instant access you can open a Savings account at Etrade and that transfers instantly to/from investing accounts and earns 3.5%.

I am tempted to try this at Wealthfront, but the biggest thing holding me back is: A) I have a lump sum to invest and probably won't be contributing a lot to taxable in the future. Will there be anything to TLH after a few years? I guess there are always a few companies with losses if you own the whole index, and dividend reinvestments will create small lots. So maybe there will be some. But it feels like the greatest benefit is going to be to people regularly contributing. B) I feel like I would be stuck forever because who wants to ACATS back a few hundred individual holdings and then manage them? And they would all be low basis because of all the TLH so you'd have a tax hit to unload any of them. C) Taxes. Some are saying you just have t...

Honestly worrying about YTD returns in mid March is very short sighted. I have never seen this type of variance in the Mid-Cap fund from the other broader market indexes. You have just not been paying attention. Look at some historical returns, it a rare year where Large/Mid/Small returns the same. And if you were expecting the same returns as VTI, just buy VTI! https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=1&timePeriod=4&startYear=1972&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absolute...

anil686 wrote: ↑Thu Mar 16, 2023 9:54 pm
This x 1000 IMO…. It was the same (separate from Direct Indexing) with Wealthfront and others before with the continuous TLH portfolios. Those were a mess after a year….

I'd have a hard time calling any of them "a mess" when you just get the ETF portfolios. They are still a good portfolio of low cost index funds. Worst case you get like a 10 fund portfolio with most of the funds from Vanguard or iShares. I'm surprised you mentioned Wealthfront as their default portfolio is just VTI, VWO, VEA, BND and VIG.

I think the biggest reason that some advisors/brokers are pushing direct indexing is because you are effectively trapped once you get a few years into it with some solid gains. You'll have a few hundred individual holdings. Sure you can ACATS out at any time, but trying to unwind all those positions without blowing up your taxes and maintaining your asset allocation is going to be a bigger challenge than most would be willing to take on.

Typical Bond funds have a maturity date that is always in the future. Individual bonds have a specific maturity date. If you need money in exactly 2 years, you would want something with a specific maturity date. Say you find a Bond fund with an average maturity date of 2 years, like iShares SHY. In 23 months from now, the average maturity date will still be 2 years away so the risk stays the same. And in the wrong market, that can make a huge difference. SHY dropped from 86 to 80 in a matter of 2 months last fall. If someone invested in 2021, they probably won't be getting all their money back by that 2 year mark. Individual bonds get less risky as they go on and you know exactly what you are getting back at the end. So if you have a specif...

This is the main reason I would almost always prefer brokered CDs.

My paycheck goes into my credit union and then I want a portion of it to go to various other investment and savings accounts. Are there any pros/cons to initiating those transfers from the credit union side vs the online savings or broker accounts? As in pushing the money from my checking vs having it pulled?

Interested to hear any thoughts on the subject, thanks.

There’s no way I’d buy an 11 year CD that is callable in 1 year. If interest rates go up, I’m stuck with the CD until 2033. If interest rates go down, the CD will be called and I’ll need to reinvest in 1 year at a lower rate. Not an attractive situation. Sorry -- I'm not following how you would be "stuck" with the CD. Can you explain? Isn't the whole point of brokered CDs that you can sell them if you need to (albeit sometimes at a loss)? If rates rise, the CD you hold at lower interest rates will decrease in value to the point where it reaches equilibrium with new CDs at a higher rate. So if you sell your 5% CD at a loss and buy a new CD for 6%, you still only make 5% on original investment factoring in that loss. And probably h...

9 days for federal and 12 days for state.

Both 2030 target date funds. Vanguard has .08% expense ratio, Fidelity one has a 0.66%. 10 year return difference between the two is less than .1%. I'd pick the one with lower fees, so Vanguard by a mile.

Fidelity does have a low fee(.12%) target date 2030 fund (FXIFX) so if you need to stick with Fidelity, I would choose that one over the one you listed above.

They are just different investments for different risk profiles.

CDs are great if you need a guaranteed return and payback over a fixed period.

A broad market index fund has always had higher returns than CDs given enough time, but it can definitely drop considerably in the short to medium term.

So really it depends on how soon you expect to withdraw the money and how much you can afford to lose in the short term.

If I think I can:

A) actually save significant money or time
B) Do a reasonably good job
C) will not endanger myself or others
D) won't absolutely hate doing the work

Then I do it myself.

If not, then I usually put it off as long as possible and then pay someone.

What happens if you end up with a small partial wash sale from a dividend or an automated investment process? does it cancel the whole sale or just the few shares that got re-purchased?

strummer6969 wrote: ↑Wed Feb 15, 2023 5:38 pm I don't think buying high quality companies at a good price is too risky.

It seems like that should be obvious. But think back 20 or 30 years at the "high quality" companies. What would you have picked? How did they do compared to the broad index?

Paradise wrote: ↑Wed Feb 15, 2023 2:33 pm

At this point, we'd like to focus additional investment into money that we can earn/get now (not retirement stuff) to give us some more breathing room to not have to think about money as much.. passive income with low tax.

Bro....

You just admitted to having $100k free and clear after maxing out health and retirement accounts and covering all expenses. You have more breathing room than most people have salary.

[Unnecessary comment removed by moderator ClaycordJCA]. Capital gains is already low tax relative to the rest of your income. Your easy answer is to make an investment portfolio in taxable account and invest in standard tax efficient index funds like VTI and tax free CA friendly municipal bonds.

Both are S&P500 funds and track the exact same stocks and index. So no need to change strategy. Just use the Fidelity fund in place of the Vanguard one at the same exact allocation.

FromAto401k wrote: ↑Wed Feb 15, 2023 10:44 am Hi All,

Per my earlier post, I recently inherited several IRAs. Some of the investments are in funds/etfs with ERs of .36% and .25%. These are Avantis ETFs. Any reason to keep these?

What is generally the max ER you will consider for a fund/ETF?

Avantis are generally considered to be good funds, so it's not an automatic disqualification

However with it being an IRA, you can swap funds at will with no tax consquences. So if you are unfamiliar with the inherited funds or they don't meet your strategy, no reason to spend time thinking about it. Just sell and pick what you are comfortable with.

I don't have a good answer for your general question. But the practical answer to your question is that Schwab offers their own low cost Target Date funds, so that's what you can use. Just search for the Index version with your target date. For example, 2040 is SWYGX and only has a 0.08% mgmt fee: https://www.schwab.com/research/mutual- ... risk/swygx

First off, I think most of us are pretty vigilant about not running out of gas, and we would likely be doubly so for not running out of charge. But as life is full of variables, I'm sure it something that happens to a small percentage of EV drivers. But if it did happen to you, you'd need to get a tow to a charger. Or have a service bring some charge to you through either a purpose built mobile charging van, or a gas powered generator.

Dodge and Cox are pretty good funds. I wish the fees were lower, but they have covered their fees over the last 15 years that you've owned them. Here's an 80/20 3-fund portfolio comparing Vanguard and Dodge and Cox with after fee returns: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2007&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&...

I think you should make a plan and save as much as you need to meet that plan. Maxing out 401k is not a plan. Those limits are not recommendations, they are just there to keep the richest from avoiding too much tax. It’s not a target you need to hit.

My opinion is that making an extra .5% on your short term savings is not worth additional complexity and restrictions. It's not going to change your ability to meet your goals for this money. I'd stick with a HYSA or MMF.

The question you should be asking yourself, is if you really need leveraged bonds to meet your goals. And my guess, is the answer is no. So why complicate things?

Anyone have any leads on 2043?

You talk about having "no time for this", so maybe just do the rollover 1-4x per year instead of 2x per month? What is the advantage of doing it so often?

This is the second post in a week about people thinking they need/want a 7 seater car because they have 1 kid coming. I don't understand it. Anything with 4 doors can fit 2-3 kids in the back. Why spend $10-20k more and get worse mpg than you have to to get a huge vehicle for most of it to be empty?

MattB wrote: ↑Sun Feb 12, 2023 7:23 pm As relevant, we will be driving out of the San Francisco Bay area in mid-July, and we're looking to spend 3-4 weeks on the road.

The commute would be a non-starter. Will be looking to relax with DW, kiddo, and 3 month old.

3 month old baby and planning 3-4 weeks on the road?