Advice investing in index funds

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jb1
Posts: 179
Joined: Sun Nov 27, 2016 8:33 am
Location: NC

Advice investing in index funds

Post by jb1 » Thu Mar 23, 2017 10:40 am

Hello all.

I have budgeted $700 to invest with.

Already put $200/month in Roth IRA.

With the $700 it is advised to keep putting it in vtsmx?

In terms of risk, I would say I have trouble knowing how to properly rebalance my portfolio. I'm 26, my Ira is set to aggressive.

Would it be recommended to put $100 in total bond per month? And the rest in VTSMX

Are those really the only recommended things to invest in overall? As well as int. stock market.

edit: Forgot to add, I currently have 5.5k in VTSMX, and 10k in XSLV and 5k in SPLV. Sorry originally wrote it on a mobile device
Last edited by jb1 on Thu Mar 23, 2017 12:08 pm, edited 3 times in total.

WallStreetPhysician
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Re: Advice investing in index funds

Post by WallStreetPhysician » Thu Mar 23, 2017 11:16 am

jb1 wrote:Hello all.

I have budgeted $700 to invest with.

Already put $200 in Roth IRA.

With the $700 it is advised to keep putting it in vtsmx?

In terms of risk, I would say I have trouble knowing how to properly rebalance my portfolio. I'm 26, my Ira is set to aggressive.

Would it be recommended to put $100 in total bond per month? And the rest in VTSMX

Are those really the only recommended things to ovest kn overall? As well as int. stock market.
Congratulations on getting started with investing. With the relatively small absolute dollar amounts you're dealing with. I would focus on just stocks and bonds (VTI and BND are the ETFs). You can add international stock market later.

-WSP

Edit: As noted below, VTSMX has a $3,000 minimum. I would invest in ETFs, preferably the ETFs that are commission-free with your selected brokerage firm. For vanguard that is VTI for stocks, and BND for bonds.
Last edited by WallStreetPhysician on Thu Mar 23, 2017 3:55 pm, edited 1 time in total.

GLState
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Re: Advice investing in index funds

Post by GLState » Thu Mar 23, 2017 11:19 am

VTSMX has a $3000 minimum investment requirement. One of Vanguard's Target Date funds, which have a minimum investment of $1000, would be a good choice for a first investment. Or, instead of VTSMX, you could purchase the equivalent ETF, VTI, but would have to pay a commission of $5-$10, depending on your brokerage.
Last edited by GLState on Thu Mar 23, 2017 11:24 am, edited 1 time in total.

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BL
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Re: Advice investing in index funds

Post by BL » Thu Mar 23, 2017 11:24 am

Do you have access to a 401k? Use tax-advantaged accounts before taxable for retirement investing.
Do you have an HSA available?
In terms of risk, I would say I have trouble knowing how to properly rebalance my portfolio. I'm 26, my Ira is set to aggressive.
Be sure you are using low-ER index funds, ideally below 0.2%. Somehow I get the notion above that this is managed, which means you may not be getting the most from your money. Brokerages like Vanguard, Fidelity, Schwab, etc., all have low-ER index funds. Low-ER target funds or other balanced funds would balance everything for you in that account.

Artisan
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Joined: Sat Oct 01, 2016 8:30 am

Re: Advice investing in index funds

Post by Artisan » Thu Mar 23, 2017 11:32 am

Welcome to the Boglehead forum and investing.

To give you advice we need a little more information.

How much do you plan to invest overall? Is this a one time investment or do you plan to contribute regularly? How much do you plan to invest over time say every month or year?

Do you have access through work to any 401k or 403b? Does your employer contribute or match any portion? Any contributions to an IRA?

I'd also suggest reading a book entitled the Bogleheads Guide to Investing. Do help you determine what percentage to contribute to stocks vs bonds I'd suggest reading a book or two on asset allocation. One I like is Rick Ferri's "All About Asset Allocation".

jayhawkerbeef
Posts: 246
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Re: Advice investing in index funds

Post by jayhawkerbeef » Thu Mar 23, 2017 11:54 am

No clue how much that is in relation to you net worth or other retirement account your have, but highly recommend a target date retirement fund based on your risk tolerance or age when you plan to retire.

One fund, broadly diversified, low expense, simple.

jb1
Posts: 179
Joined: Sun Nov 27, 2016 8:33 am
Location: NC

Re: Advice investing in index funds

Post by jb1 » Thu Mar 23, 2017 12:06 pm

Artisan wrote:Welcome to the Boglehead forum and investing.

To give you advice we need a little more information.

How much do you plan to invest overall? Is this a one time investment or do you plan to contribute regularly? How much do you plan to invest over time say every month or year?

Do you have access through work to any 401k or 403b? Does your employer contribute or match any portion? Any contributions to an IRA?

I'd also suggest reading a book entitled the Bogleheads Guide to Investing. Do help you determine what percentage to contribute to stocks vs bonds I'd suggest reading a book or two on asset allocation. One I like is Rick Ferri's "All About Asset Allocation".
I don't have a 401k, unfortunately only make 20k a year. I max out my Roth IRA every year and have 14k in it. Id like to invest a total of 12k a year total.

Artisan
Posts: 324
Joined: Sat Oct 01, 2016 8:30 am

Re: Advice investing in index funds

Post by Artisan » Thu Mar 23, 2017 2:25 pm

jb1 wrote:
Artisan wrote:Welcome to the Boglehead forum and investing.

To give you advice we need a little more information.

How much do you plan to invest overall? Is this a one time investment or do you plan to contribute regularly? How much do you plan to invest over time say every month or year?

Do you have access through work to any 401k or 403b? Does your employer contribute or match any portion? Any contributions to an IRA?

I'd also suggest reading a book entitled the Bogleheads Guide to Investing. Do help you determine what percentage to contribute to stocks vs bonds I'd suggest reading a book or two on asset allocation. One I like is Rick Ferri's "All About Asset Allocation".
I don't have a 401k, unfortunately only make 20k a year. I max out my Roth IRA every year and have 14k in it. Id like to invest a total of 12k a year total.

The biggest single thing you can do is try to increase your earnings.

Based on your savings rate of 12k and your salary of 20K I am assuming your living expenses are minimal, maybe living at home.

You might want to consider an emergency fund.

One of your funds has a high expense ratio. I would consider getting rid of that one.

Decide on an asset allocation. Put the stock portion in VTSAX and the fixed income portion in VBMFX.

jb1
Posts: 179
Joined: Sun Nov 27, 2016 8:33 am
Location: NC

Re: Advice investing in index funds

Post by jb1 » Thu Mar 23, 2017 8:19 pm

Artisan wrote:
jb1 wrote:
Artisan wrote:Welcome to the Boglehead forum and investing.

To give you advice we need a little more information.

How much do you plan to invest overall? Is this a one time investment or do you plan to contribute regularly? How much do you plan to invest over time say every month or year?

Do you have access through work to any 401k or 403b? Does your employer contribute or match any portion? Any contributions to an IRA?

I'd also suggest reading a book entitled the Bogleheads Guide to Investing. Do help you determine what percentage to contribute to stocks vs bonds I'd suggest reading a book or two on asset allocation. One I like is Rick Ferri's "All About Asset Allocation".
I don't have a 401k, unfortunately only make 20k a year. I max out my Roth IRA every year and have 14k in it. Id like to invest a total of 12k a year total.

The biggest single thing you can do is try to increase your earnings.

Based on your savings rate of 12k and your salary of 20K I am assuming your living expenses are minimal, maybe living at home.

You might want to consider an emergency fund.

One of your funds has a high expense ratio. I would consider getting rid of that one.

Decide on an asset allocation. Put the stock portion in VTSAX and the fixed income portion in VBMFX.

Xslv and splv both have .25 expense ratio. What would you recommend relaxing them with?

Artisan
Posts: 324
Joined: Sat Oct 01, 2016 8:30 am

Re: Advice investing in index funds

Post by Artisan » Fri Mar 24, 2017 2:49 pm

jb1 wrote:
Artisan wrote:
jb1 wrote:
Artisan wrote:Welcome to the Boglehead forum and investing.

To give you advice we need a little more information.

How much do you plan to invest overall? Is this a one time investment or do you plan to contribute regularly? How much do you plan to invest over time say every month or year?

Do you have access through work to any 401k or 403b? Does your employer contribute or match any portion? Any contributions to an IRA?

I'd also suggest reading a book entitled the Bogleheads Guide to Investing. Do help you determine what percentage to contribute to stocks vs bonds I'd suggest reading a book or two on asset allocation. One I like is Rick Ferri's "All About Asset Allocation".
I don't have a 401k, unfortunately only make 20k a year. I max out my Roth IRA every year and have 14k in it. Id like to invest a total of 12k a year total.

The biggest single thing you can do is try to increase your earnings.

Based on your savings rate of 12k and your salary of 20K I am assuming your living expenses are minimal, maybe living at home.

You might want to consider an emergency fund.

One of your funds has a high expense ratio. I would consider getting rid of that one.

Decide on an asset allocation. Put the stock portion in VTSAX and the fixed income portion in VBMFX.

Xslv and splv both have .25 expense ratio. What would you recommend relaxing them with?
I must have typed the wrong symbol. One of them showed an ER of over.8 when I last looked. .25ER is not horrible. If you are happy with those investments you could leave them.

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