Need help with current market (voo,vti)

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nkotbbh
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Need help with current market (voo,vti)

Post by nkotbbh » Thu Oct 12, 2017 3:41 pm

Hi everybody I have a question regarding 2 etf's voo and vti. I had an edward jones account and transferred over to vanguard "thank god," and after reading a few books I want to invest in ETF's but those two etf's are currently really high and are about as high as they have been so I was thinking to currently invest in bonds and then buy voo and vti or do you recommend just buy them? Reason I ask if I should just buy them is because no matter which way you see it those 2 etf's are just going up in value if you look at the history. Also have a traditional ira which I will convert over to a roth.

livesoft
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Re: Need help with current market (voo,vti)

Post by livesoft » Thu Oct 12, 2017 4:15 pm

Wellcome to the bogleheads forum. Normally, people present a long-term plan before they get advice on buying any investments. So what's your long-term plan?

You may wish to see if this format helps with your presentation of your long-term plan:
viewtopic.php?f=1&t=6212

See also: https://www.bogleheads.org/wiki/Getting_started
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MotoTrojan
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Re: Need help with current market (voo,vti)

Post by MotoTrojan » Thu Oct 12, 2017 4:48 pm

Buy one or the other (recommend VTI, more tax-efficient and diverse). They are highly correlated and no need to duplicate, unless tax-loss harvesting.

Looking into adding a percentage of VXUS as well.

I'd invest now, but make sure you have the willingness to ride out a bad period (15+++ years holding period).

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David Jay
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Re: Need help with current market (voo,vti)

Post by David Jay » Thu Oct 12, 2017 8:01 pm

Markets are at-or-near all time highs about 60% of the time. So by definition it is completely normal for broad market funds to be "really high and about as high as they have ever been".
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

nkotbbh
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Re: Need help with current market (voo,vti)

Post by nkotbbh » Fri Oct 13, 2017 12:53 pm

livesoft wrote:
Thu Oct 12, 2017 4:15 pm
Wellcome to the bogleheads forum. Normally, people present a long-term plan before they get advice on buying any investments. So what's your long-term plan?

You may wish to see if this format helps with your presentation of your long-term plan:
viewtopic.php?f=1&t=6212

See also: https://www.bogleheads.org/wiki/Getting_started
Hey thanks for the reply, actual plan is retirement not so much day trading as that is something I would like to get in to later in the future but for now just retirement "IRA" so since the market is very optimistic stocks are at their all time high. So that is why I was thinking of buying bonds for now until the stocks get low again but then again no matter what the nasdaq, s&p, and djia will always be going up no matter what.

nkotbbh
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Re: Need help with current market (voo,vti)

Post by nkotbbh » Fri Oct 13, 2017 12:56 pm

David Jay wrote:
Thu Oct 12, 2017 8:01 pm
Markets are at-or-near all time highs about 60% of the time. So by definition it is completely normal for broad market funds to be "really high and about as high as they have ever been".
True, I just dont want to risk buying high and then later it dips real low in price, so I was thinking bonds and then stocks? I have read a few books and I believe in the buy low sale high but I want to buy and hold until retirement but still buy low.

Jack FFR1846
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Re: Need help with current market (voo,vti)

Post by Jack FFR1846 » Fri Oct 13, 2017 1:03 pm

Markets hit new highs on average every 18 days. So if you think VTI and such are going to not go up, you'd want to invest sometime in the next couple weeks, otherwise, you'll simply be at yet another market high on average and you will never invest.

Let me show that I put my money where my mouth is. Money that I transferred to TDAmeritrade just settled today. I bought VTI with all of that money.
Bogle: Smart Beta is stupid

alex_686
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Re: Need help with current market (voo,vti)

Post by alex_686 » Fri Oct 13, 2017 1:07 pm

nkotbbh wrote:
Fri Oct 13, 2017 12:56 pm
True, I just dont want to risk buying high and then later it dips real low in price, so I was thinking bonds and then stocks? I have read a few books and I believe in the buy low sale high but I want to buy and hold until retirement but still buy low.
I feel we need to make this recurring question a sticky post at the top.

I am not sure what metric you are using but I will assume the P/E ratio. P/E ratio is a relative measure - what what are you comparing it against? Adjust for real interest rates and expected inflation is high, but not a all time time. Another way to look at this is that stocks are high but so are bonds. How does moving from one overpriced asset class to a different overpriced asset class help? High P/E ratios do not have historical predictive power when it comes to calling market highs or low. To build on this, what metric give you a good sense when the market is high or low? Market timing also has a horrible history.

I understand the emotional turmoil you are going through. I think the market is undergoing a secular change and that makes me uneasy. If you need to move towards bonds for emotional reasons do so.

nkotbbh
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Re: Need help with current market (voo,vti)

Post by nkotbbh » Fri Oct 13, 2017 1:31 pm

Jack FFR1846 wrote:
Fri Oct 13, 2017 1:03 pm
Markets hit new highs on average every 18 days. So if you think VTI and such are going to not go up, you'd want to invest sometime in the next couple weeks, otherwise, you'll simply be at yet another market high on average and you will never invest.

Let me show that I put my money where my mouth is. Money that I transferred to TDAmeritrade just settled today. I bought VTI with all of that money.
Hey rookie here so do not exactly understand what you are saying, but not saying it is not going up just saying it is at all time high "52 week high" and just afraid it might go down but like I said the market is always going high so if I am to invest in stocks lets say 6 months from now "voo,vti" they might be even higher. Also what do you mean just "settled"?

nkotbbh
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Re: Need help with current market (voo,vti)

Post by nkotbbh » Fri Oct 13, 2017 1:35 pm

alex_686 wrote:
Fri Oct 13, 2017 1:07 pm
nkotbbh wrote:
Fri Oct 13, 2017 12:56 pm
True, I just dont want to risk buying high and then later it dips real low in price, so I was thinking bonds and then stocks? I have read a few books and I believe in the buy low sale high but I want to buy and hold until retirement but still buy low.
I feel we need to make this recurring question a sticky post at the top.

I am not sure what metric you are using but I will assume the P/E ratio. P/E ratio is a relative measure - what what are you comparing it against? Adjust for real interest rates and expected inflation is high, but not a all time time. Another way to look at this is that stocks are high but so are bonds. How does moving from one overpriced asset class to a different overpriced asset class help? High P/E ratios do not have historical predictive power when it comes to calling market highs or low. To build on this, what metric give you a good sense when the market is high or low? Market timing also has a horrible history.

I understand the emotional turmoil you are going through. I think the market is undergoing a secular change and that makes me uneasy. If you need to move towards bonds for emotional reasons do so.
Not using any type of metric just saying market is very optimistic and afraid of investing in both voo and vti only to later depreciate in value "rookie here" so just wondering if I should just buy both? I do have a vanguard account and have a few other ETF's I want to buy.

rkhusky
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Re: Need help with current market (voo,vti)

Post by rkhusky » Fri Oct 13, 2017 1:38 pm

Bond yield are also still at historic lows and when yield increases, bond prices drop. However, people have been saying that for 10 years and those that put everything in cash have missed out. Try putting 50% in stocks and 50% in bonds and then move bonds to stocks over the next year or so.

nkotbbh
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Re: Need help with current market (voo,vti)

Post by nkotbbh » Fri Oct 13, 2017 1:43 pm

rkhusky wrote:
Fri Oct 13, 2017 1:38 pm
Bond yield are also still at historic lows and when yield increases, bond prices drop. However, people have been saying that for 10 years and those that put everything in cash have missed out. Try putting 50% in stocks and 50% in bonds and then move bonds to stocks over the next year or so.
Yes I read when stocks go high bonds go low with a good paying yield and when market goes low the bond price goes up but low paying yield, just afraid of buying and then losing money.

alex_686
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Re: Need help with current market (voo,vti)

Post by alex_686 » Fri Oct 13, 2017 1:46 pm

nkotbbh wrote:
Fri Oct 13, 2017 1:35 pm
Not using any type of metric just saying market is very optimistic and afraid of investing in both voo and vti only to later depreciate in value "rookie here" so just wondering if I should just buy both? I do have a vanguard account and have a few other ETF's I want to buy.
There is not much difference between the 2, both are dominated by US large cap stocks. They use different index providers. VTI holds some medium and small cap, but the overlap between the 2 is high - IIRC it is in the 80 to 85% range. Thus if VOO is overvalued than VTI is also going to be overvalued.

As for being a rookie, professionals are struggling with this issue. I would suggest finding some type of metric to hang your hat on. How does one measure how optimistic the market is? Most mistakes stem from emotional or cognitive issues - going on one's gut instinct instead of a systematic approach.

Rob Bertram
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Re: Need help with current market (voo,vti)

Post by Rob Bertram » Fri Oct 13, 2017 1:51 pm

nkotbbh wrote:
Fri Oct 13, 2017 1:31 pm
Jack FFR1846 wrote:
Fri Oct 13, 2017 1:03 pm
Markets hit new highs on average every 18 days. So if you think VTI and such are going to not go up, you'd want to invest sometime in the next couple weeks, otherwise, you'll simply be at yet another market high on average and you will never invest.

Let me show that I put my money where my mouth is. Money that I transferred to TDAmeritrade just settled today. I bought VTI with all of that money.
Hey rookie here so do not exactly understand what you are saying, but not saying it is not going up just saying it is at all time high "52 week high" and just afraid it might go down but like I said the market is always going high so if I am to invest in stocks lets say 6 months from now "voo,vti" they might be even higher. Also what do you mean just "settled"?
The best time to invest was 30 years ago. The second best time to invest is today. There is always some element of risk with investing, so pick an asset allocation that lets you sleep at night, and stick with it. From one day to the next, your portfolio value might go down. It will also go up. Get used to tuning out the noise.

As others have said, VOO and VTI consist of the same core stocks. Go with VTI as it is more diversified.

Settled = transfer complete, money available to use. There is sometimes a few days lag between initiating a transfer and the money being available to use.

nkotbbh
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Re: Need help with current market (voo,vti)

Post by nkotbbh » Fri Oct 13, 2017 1:57 pm

alex_686 wrote:
Fri Oct 13, 2017 1:46 pm
nkotbbh wrote:
Fri Oct 13, 2017 1:35 pm
Not using any type of metric just saying market is very optimistic and afraid of investing in both voo and vti only to later depreciate in value "rookie here" so just wondering if I should just buy both? I do have a vanguard account and have a few other ETF's I want to buy.
There is not much difference between the 2, both are dominated by US large cap stocks. They use different index providers. VTI holds some medium and small cap, but the overlap between the 2 is high - IIRC it is in the 80 to 85% range. Thus if VOO is overvalued than VTI is also going to be overvalued.

As for being a rookie, professionals are struggling with this issue. I would suggest finding some type of metric to hang your hat on. How does one measure how optimistic the market is? Most mistakes stem from emotional or cognitive issues - going on one's gut instinct instead of a systematic approach.
well true nobody can measure if the market is optimistic, but just saying 52 week's high and our president has said it himself the market is optimistic so seem's like a bull market, just uncertain as what to do. What would you do any advice as where or what to invest in would be highly appreciated.
Here are some of the ETF's and Bonds I am thinking of investing in.

ETF's
vti
voo
vb
vwo
vnq
voov
voog
vxus
vym
vug
vea

BONDS's
bnd
blv
biv
vcit
vclt
vcsh
vgsh

nkotbbh
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Joined: Thu Oct 12, 2017 3:34 pm

Re: Need help with current market (voo,vti)

Post by nkotbbh » Fri Oct 13, 2017 1:59 pm

Rob Bertram wrote:
Fri Oct 13, 2017 1:51 pm
nkotbbh wrote:
Fri Oct 13, 2017 1:31 pm
Jack FFR1846 wrote:
Fri Oct 13, 2017 1:03 pm
Markets hit new highs on average every 18 days. So if you think VTI and such are going to not go up, you'd want to invest sometime in the next couple weeks, otherwise, you'll simply be at yet another market high on average and you will never invest.

Let me show that I put my money where my mouth is. Money that I transferred to TDAmeritrade just settled today. I bought VTI with all of that money.
Hey rookie here so do not exactly understand what you are saying, but not saying it is not going up just saying it is at all time high "52 week high" and just afraid it might go down but like I said the market is always going high so if I am to invest in stocks lets say 6 months from now "voo,vti" they might be even higher. Also what do you mean just "settled"?
The best time to invest was 30 years ago. The second best time to invest is today. There is always some element of risk with investing, so pick an asset allocation that lets you sleep at night, and stick with it. From one day to the next, your portfolio value might go down. It will also go up. Get used to tuning out the noise.

As others have said, VOO and VTI consist of the same core stocks. Go with VTI as it is more diversified.

Settled = transfer complete, money available to use. There is sometimes a few days lag between initiating a transfer and the money being available to use.
Ok but yes I agree market will fluctuate but what do you think about going this route?

ETF's
vti
voo
vb
vwo
vnq
voov
voog
vxus
vym
vug
vea

BONDS's
bnd
blv
biv
vcit
vclt
vcsh
vgsh

livesoft
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Re: Need help with current market (voo,vti)

Post by livesoft » Fri Oct 13, 2017 2:19 pm

nkotbbh wrote:
Fri Oct 13, 2017 1:59 pm
Ok but yes I agree market will fluctuate but what do you think about going this route?
I'd say narrow it down to just 3 ETFs:
VTI
VXUS
BND

to start with. You can use just those up to about $100 million if you want. Or after 2 or 3 years of just those, you may wish to consider some others.
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Tyler Aspect
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Re: Need help with current market (voo,vti)

Post by Tyler Aspect » Fri Oct 13, 2017 2:26 pm

The most important preparation step in investing is to thinking about how you will determine your asset allocation in terms of the percentages of stocks versus bonds. When we are young we can hold more stocks for a higher return. As we grow old then we should hold more bonds to have more stability.

I have presented below a typical asset allocation glide path chart, offering a range of possible allocations between aggressive, normal, and conservative.

Image
  • 100% stock / 0% bond, average annual return 2007 to 2016: 8.65%, 2008 return: -36.6%
  • 80% stock / 20% bond, average annual return 2007 to 2016: 7.93%, 2008 return: -25.2%
  • 70% stock / 30% bond, average annual return 2007 to 2016: 7.56%, 2008 return: -19.6%
  • 60% stock / 40% bond, average annual return 2007 to 2016: 7.02%, 2008 return: -13.9%
  • 50% stock / 50% bond, average annual return 2007 to 2016: 6.84%, 2008 return: -8.3%
  • 40% stock / 60% bond, average annual return 2007 to 2016: 6.48%, 2008 return: -2.6%
Source: http://pages.stern.nyu.edu/~adamodar/Ne ... retSP.html

Other instances of recession could be more severe or milder compared to year 2008. It should be noted that year 2009 was a down year as well.

Owning some international stock is an additional form of diversification. Jack Bogle recommended a US stock to international stock ratio of 4 to 1. More recent Vanguard published studies recommended more international exposure. A US stock to international stock ratio of 3 to 1 may be a good compromise.

Some sample Vanguard funds' allocations:
  • Vanguard Total Stock Market: 100% stock
  • Vanguard LifeStrategy Growth: 80% stock / 20% bond
  • Vanguard Balanced Index: 60% stock / 40% bond
  • Vanguard LifeStrategy Conservative Growth: 40% stock / 60% bond
  • Vanguard Total Bond Market Index: 100% bond
Past result does not predict future performance. Mentioned investments may lose money. Contents are presented "AS IS" and any implied suitability for a particular purpose are disclaimed.

Rob Bertram
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Re: Need help with current market (voo,vti)

Post by Rob Bertram » Fri Oct 13, 2017 2:29 pm

Yes, there are so many different letters to choose!

The only three that you should care about are: VTI (Vanguard total stock), VXUS (Vanguard ex-US total stock), and BND (Vanguard total bond). Spend some time reading the 3-fund portfolio wiki article. https://www.bogleheads.org/wiki/Three-fund_portfolio

Once you can articulate an asset allocation that lets you sleep at night, come back and post your thoughts and asset allocation.

Extra homework: Explain why total-market capitalization-weighted funds have the highest risk-adjusted returns in their asset class.

pkcrafter
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Re: Need help with current market (voo,vti)

Post by pkcrafter » Fri Oct 13, 2017 2:34 pm

nkotbbh, why would you want to buy VTI and VOO? They are almost the same, so choose just one--VTI.

As for what to do, if you had an allocation in stocks at EJ, then your move is a sideways move and you should continue with the same asset allocation (AA) you had before the transfer. If you are not comfortable with that AA, change the AA now, but then do not move it again until life events change--like nearing retirement. Messing with AA and trying to play timing will generate lower long term returns for sure.

Don't try to find the perfect place because there isn't one. Investing is like being on a seesaw. When we make decisions to improve returns (up) on one thing, something else we had set to our satisfaction will go down. You have to find the Goldilocks position -- where you can have a good ride, but not fall off.

Paul
Last edited by pkcrafter on Fri Oct 13, 2017 11:13 pm, edited 1 time in total.
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

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David Jay
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Re: Need help with current market (voo,vti)

Post by David Jay » Fri Oct 13, 2017 2:37 pm

nkotbbh wrote:
Fri Oct 13, 2017 12:56 pm
David Jay wrote:
Thu Oct 12, 2017 8:01 pm
Markets are at-or-near all time highs about 60% of the time. So by definition it is completely normal for broad market funds to be "really high and about as high as they have ever been".
True, I just dont want to risk buying high and then later it dips real low in price, so I was thinking bonds and then stocks? I have read a few books and I believe in the buy low sale high but I want to buy and hold until retirement but still buy low.
Based on your statement above, you are not yet at the point in your investing knowledge to buy any stocks. I can promise you that your stock holdings WILL go down at some point if you hold them for 15 years or more.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

nkotbbh
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Re: Need help with current market (voo,vti)

Post by nkotbbh » Fri Oct 13, 2017 2:55 pm

David Jay wrote:
Fri Oct 13, 2017 2:37 pm
nkotbbh wrote:
Fri Oct 13, 2017 12:56 pm
David Jay wrote:
Thu Oct 12, 2017 8:01 pm
Markets are at-or-near all time highs about 60% of the time. So by definition it is completely normal for broad market funds to be "really high and about as high as they have ever been".
True, I just dont want to risk buying high and then later it dips real low in price, so I was thinking bonds and then stocks? I have read a few books and I believe in the buy low sale high but I want to buy and hold until retirement but still buy low.
Based on your statement above, you are not yet at the point in your investing knowledge to buy any stocks. I can promise you that your stock holdings WILL go down at some point if you hold them for 15 years or more.
True like I said I have read a few books and just want to make sure I am doing the right thing as far as etf's fluctuating there is nothing I/we can do about it that is just how the market is. Like any business, businesses are in the business to make money not lose so just trying to do the right thing.

nkotbbh
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Re: Need help with current market (voo,vti)

Post by nkotbbh » Fri Oct 13, 2017 2:57 pm

pkcrafter wrote:
Fri Oct 13, 2017 2:34 pm
nkotbbh, why would you want to buy VTI and VOO? They are almost the same, so choose just one--VTI.

As for what to do, if you had an allocation in stocks at EJ, then your move is a sideways move and you should continue with the same asset allocation (AA) you had before the transfer. If you are not comfortable with that AA, change the AA now, but then do not move it again until life events change--like nearing retirement. Messing with AA and trying to play timing will generate lower long term returns for sure.

Don't try to find the perfect place because there isn't one. Investing is like being on a seesaw. When we make decisions to improve returns (up) on one thing something else will had set to our satisfaction will go down. You have to find the Goldilocks position -- where you can have a good ride, but not fall off.

Paul
I actually transferred the Edward Jones account over to Vanguard and sold the stocks that Edward Jones was buying me every month "LCEAX" I was always in the negative with them losing money and not gaining, so like I said transferred over and sold them now just trying to see which etf's and bonds to buy.

nkotbbh
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Re: Need help with current market (voo,vti)

Post by nkotbbh » Fri Oct 13, 2017 3:01 pm

livesoft wrote:
Fri Oct 13, 2017 2:19 pm
nkotbbh wrote:
Fri Oct 13, 2017 1:59 pm
Ok but yes I agree market will fluctuate but what do you think about going this route?
I'd say narrow it down to just 3 ETFs:
VTI
VXUS
BND

to start with. You can use just those up to about $100 million if you want. Or after 2 or 3 years of just those, you may wish to consider some others.
100 million that sounds nice how can I do that. I wish I had that amount right now.

nkotbbh
Posts: 75
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Re: Need help with current market (voo,vti)

Post by nkotbbh » Fri Oct 13, 2017 4:18 pm

Rob Bertram wrote:
Fri Oct 13, 2017 2:29 pm
Yes, there are so many different letters to choose!

The only three that you should care about are: VTI (Vanguard total stock), VXUS (Vanguard ex-US total stock), and BND (Vanguard total bond). Spend some time reading the 3-fund portfolio wiki article. https://www.bogleheads.org/wiki/Three-fund_portfolio

Once you can articulate an asset allocation that lets you sleep at night, come back and post your thoughts and asset allocation.

Extra homework: Explain why total-market capitalization-weighted funds have the highest risk-adjusted returns in their asset class.
Extra homework: do not seem to find the answer all I understood that weighted funds are based on how high or low the stocks sale for? which I still do not understand and that the higher the price lower the return, and lower the price higher the return on the yield price.

livesoft
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Re: Need help with current market (voo,vti)

Post by livesoft » Fri Oct 13, 2017 4:28 pm

nkotbbh wrote:
Fri Oct 13, 2017 3:01 pm
100 million that sounds nice how can I do that. I wish I had that amount right now.
Easy: Start small and start now.
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nkotbbh
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Re: Need help with current market (voo,vti)

Post by nkotbbh » Fri Oct 13, 2017 4:53 pm

livesoft wrote:
Fri Oct 13, 2017 4:28 pm
nkotbbh wrote:
Fri Oct 13, 2017 3:01 pm
100 million that sounds nice how can I do that. I wish I had that amount right now.
Easy: Start small and start now.
If you could elaborate on top of that, it would be really greatly appreciated if anything PM me. For those who read this I currently have 3 thousand that I want to start investing in.

MotoTrojan
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Re: Need help with current market (voo,vti)

Post by MotoTrojan » Fri Oct 13, 2017 9:28 pm

nkotbbh wrote:
Fri Oct 13, 2017 4:53 pm
livesoft wrote:
Fri Oct 13, 2017 4:28 pm
nkotbbh wrote:
Fri Oct 13, 2017 3:01 pm
100 million that sounds nice how can I do that. I wish I had that amount right now.
Easy: Start small and start now.
If you could elaborate on top of that, it would be really greatly appreciated if anything PM me. For those who read this I currently have 3 thousand that I want to start investing in.
If you put $3000 in VTI, you should have $100M in ~312 years.

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Sandtrap
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Re: Need help with current market (voo,vti)

Post by Sandtrap » Fri Oct 13, 2017 9:36 pm

Some helpful links:
Bogle Philosophy
https://www.bogleheads.org/wiki/Boglehe ... philosophy
Here are links to the wiki's "Getting Started" and "Investing Startup Kit" pages:
https://www.bogleheads.org/wiki/Getting_started
https://www.bogleheads.org/wiki/Boglehe ... art-up_kit
Define General Investment Goals and Objectives
https://www.bogleheads.org/wiki/Invest ... _statement
Suggested Reading List
https://www.bogleheads.org/RecommendedReading.php
Post format such that others can see your question perhaps in greater context. :D
viewtopic.php?f=1&t=6212

nkotbbh
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Re: Need help with current market (voo,vti)

Post by nkotbbh » Fri Oct 13, 2017 9:45 pm

MotoTrojan wrote:
Fri Oct 13, 2017 9:28 pm
nkotbbh wrote:
Fri Oct 13, 2017 4:53 pm
livesoft wrote:
Fri Oct 13, 2017 4:28 pm
nkotbbh wrote:
Fri Oct 13, 2017 3:01 pm
100 million that sounds nice how can I do that. I wish I had that amount right now.
Easy: Start small and start now.
If you could elaborate on top of that, it would be really greatly appreciated if anything PM me. For those who read this I currently have 3 thousand that I want to start investing in.
If you put $3000 in VTI, you should have $100M in ~312 years.
sure that sounds good will keep in touch and ill let you 312+ years from now and see where I am by then.........

pkcrafter
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Re: Need help with current market (voo,vti)

Post by pkcrafter » Fri Oct 13, 2017 11:29 pm

nkotbbh:
I want to invest in ETF's but those two etf's are currently really high and are about as high as they have been so I was thinking to currently invest in bonds

I actually transferred the Edward Jones account over to Vanguard and sold the stocks that Edward Jones was buying me every month "LCEAX" I was always in the negative with them losing money and not gaining, so like I said transferred over and sold them now just trying to see which etf's and bonds to buy.
Yes, I understand you just transferred cash to Vanguard, but this is still a sideways move and you should resume the same asset allocation you had before the transfer. In other words, this is not new money for investing. If you are or were uncomfortable with you AA, then change it. After that, just continue to invest and keep the new AA through think and thin. What you don't want to do is jump in and out of the market.

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

nkotbbh
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Re: Need help with current market (voo,vti)

Post by nkotbbh » Fri Oct 13, 2017 11:40 pm

pkcrafter wrote:
Fri Oct 13, 2017 11:29 pm
nkotbbh:
I want to invest in ETF's but those two etf's are currently really high and are about as high as they have been so I was thinking to currently invest in bonds

I actually transferred the Edward Jones account over to Vanguard and sold the stocks that Edward Jones was buying me every month "LCEAX" I was always in the negative with them losing money and not gaining, so like I said transferred over and sold them now just trying to see which etf's and bonds to buy.
Yes, I understand you just transferred cash to Vanguard, but this is still a sideways move and you should resume the same asset allocation you had before the transfer. In other words, this is not new money for investing. If you are or were uncomfortable with you AA, then change it. After that, just continue to invest and keep the new AA through think and thin. What you don't want to do is jump in and out of the market.

Paul
Like I said I closed and cancelled the edward jones account and transferred everything over to vanguard then sold the stocks that edward jones was buying every month,and just have cash in the account, now im just debating on what to purchase.

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Re: Need help with current market (voo,vti)

Post by pkcrafter » Fri Oct 13, 2017 11:52 pm

nkotbbh wrote:
Fri Oct 13, 2017 11:40 pm
pkcrafter wrote:
Fri Oct 13, 2017 11:29 pm
nkotbbh:
I want to invest in ETF's but those two etf's are currently really high and are about as high as they have been so I was thinking to currently invest in bonds

I actually transferred the Edward Jones account over to Vanguard and sold the stocks that Edward Jones was buying me every month "LCEAX" I was always in the negative with them losing money and not gaining, so like I said transferred over and sold them now just trying to see which etf's and bonds to buy.
Yes, I understand you just transferred cash to Vanguard, but this is still a sideways move and you should resume the same asset allocation you had before the transfer. In other words, this is not new money for investing. If you are or were uncomfortable with you AA, then change it. After that, just continue to invest and keep the new AA through think and thin. What you don't want to do is jump in and out of the market.

Paul
Like I said I closed and cancelled the edward jones account and transferred everything over to vanguard then sold the stocks that edward jones was buying every month,and just have cash in the account, now im just debating on what to purchase.
Ok, I'm glad you are going to do that, but what threw me off was this:
I want to invest in ETF's but those two etf's are currently really high and are about as high as they have been so I was thinking to currently invest in bonds
I guess you are not considering that any longer.

Are you considering something like the 3-fund portfolio?

viewtopic.php?f=10&t=88005

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

nkotbbh
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Re: Need help with current market (voo,vti)

Post by nkotbbh » Sat Oct 14, 2017 12:06 am

pkcrafter wrote:
Fri Oct 13, 2017 11:52 pm
nkotbbh wrote:
Fri Oct 13, 2017 11:40 pm
pkcrafter wrote:
Fri Oct 13, 2017 11:29 pm
nkotbbh:
I want to invest in ETF's but those two etf's are currently really high and are about as high as they have been so I was thinking to currently invest in bonds

I actually transferred the Edward Jones account over to Vanguard and sold the stocks that Edward Jones was buying me every month "LCEAX" I was always in the negative with them losing money and not gaining, so like I said transferred over and sold them now just trying to see which etf's and bonds to buy.
Yes, I understand you just transferred cash to Vanguard, but this is still a sideways move and you should resume the same asset allocation you had before the transfer. In other words, this is not new money for investing. If you are or were uncomfortable with you AA, then change it. After that, just continue to invest and keep the new AA through think and thin. What you don't want to do is jump in and out of the market.

Paul
Like I said I closed and cancelled the edward jones account and transferred everything over to vanguard then sold the stocks that edward jones was buying every month,and just have cash in the account, now im just debating on what to purchase.
Ok, I'm glad you are going to do that, but what threw me off was this:
I want to invest in ETF's but those two etf's are currently really high and are about as high as they have been so I was thinking to currently invest in bonds
I guess you are not considering that any longer.

Are you considering something like the 3-fund portfolio?

viewtopic.php?f=10&t=88005

Paul
Hey paul, I see you live in California cool me too, but yeah actually the 3 fund portfolio sounds good. As far as Voo and VTI go they seem to be at an all time high and am afraid they might lose value one day, so what I was thinking was to currently buy bonds and when stocks tend to go low sell the bonds and use the money to buy stocks "VOO,VTI" when those are low. But then again if you look at the history look and see the percentage that the 3 main markets have grown the nasdaq, djia, and s&p 500. Reits also seem like a good investment .

Longtermgrowth
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Re: Need help with current market (voo,vti)

Post by Longtermgrowth » Sat Oct 14, 2017 5:05 am

Since VOO (Vanguard S&P 500 Index) and VTI (Vanguard Total Stock Index) are 80+% identical, with VTI including small cap stocks, for maximum diversification I would look at VTI + VXUS (Vanguard Total International Stock Index).

If you're looking at holding these funds for decades, the saying time in the market, not timing, really does ring true. Just hold them through any downturns and ideally add more money when they decline. If you decide you want an 80/20 stock/bond allocation for the next decade, before increasing bond percentage, simply sell some bonds to buy stocks when they're cheap to maintain your desired asset allocation. VTI and VXUS have REITs at their market cap weighting within them already.

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Re: Need help with current market (voo,vti)

Post by rkhusky » Sat Oct 14, 2017 1:46 pm

nkotbbh wrote:
Fri Oct 13, 2017 1:43 pm
rkhusky wrote:
Fri Oct 13, 2017 1:38 pm
Bond yield are also still at historic lows and when yield increases, bond prices drop. However, people have been saying that for 10 years and those that put everything in cash have missed out. Try putting 50% in stocks and 50% in bonds and then move bonds to stocks over the next year or so.
Yes I read when stocks go high bonds go low with a good paying yield and when market goes low the bond price goes up but low paying yield, just afraid of buying and then losing money.
You need to accept losing money if you invest in stocks or bonds. Otherwise you should invest in CD's.

nkotbbh
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Re: Need help with current market (voo,vti)

Post by nkotbbh » Sat Oct 14, 2017 2:31 pm

Longtermgrowth wrote:
Sat Oct 14, 2017 5:05 am
Since VOO (Vanguard S&P 500 Index) and VTI (Vanguard Total Stock Index) are 80+% identical, with VTI including small cap stocks, for maximum diversification I would look at VTI + VXUS (Vanguard Total International Stock Index).

If you're looking at holding these funds for decades, the saying time in the market, not timing, really does ring true. Just hold them through any downturns and ideally add more money when they decline. If you decide you want an 80/20 stock/bond allocation for the next decade, before increasing bond percentage, simply sell some bonds to buy stocks when they're cheap to maintain your desired asset allocation. VTI and VXUS have REITs at their market cap weighting within them already.
Actually I was thinking of doing exactly what you said but the simple 3 stock portfolio with the 2 etf's you mentioned plus "BND" and yes as John Bogle said buy and hold as this will be for retirement, so with that being said my vanguard account for retirement for the long run and at the same time I want to get in to day trading a completely different topic and have money for now. So money for the long run and money for the short run.

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Re: Need help with current market (voo,vti)

Post by nkotbbh » Sat Oct 14, 2017 2:35 pm

rkhusky wrote:
Sat Oct 14, 2017 1:46 pm
nkotbbh wrote:
Fri Oct 13, 2017 1:43 pm
rkhusky wrote:
Fri Oct 13, 2017 1:38 pm
Bond yield are also still at historic lows and when yield increases, bond prices drop. However, people have been saying that for 10 years and those that put everything in cash have missed out. Try putting 50% in stocks and 50% in bonds and then move bonds to stocks over the next year or so.
Yes I read when stocks go high bonds go low with a good paying yield and when market goes low the bond price goes up but low paying yield, just afraid of buying and then losing money.
You need to accept losing money if you invest in stocks or bonds. Otherwise you should invest in CD's.
CD's are not really worth it to me personally, you would really at least need 10,000 minimum to invest in to at least get a decent return, not to mention the waiting period until you can pull it out I would rather do a money market. But am definitely looking in to owning stocks like SOON for the long run and short run. Just trying to do my due diligence to avoid losing money.

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Re: Need help with current market (voo,vti)

Post by triceratop » Sat Oct 14, 2017 2:59 pm

nkotbbh wrote:
Sat Oct 14, 2017 2:35 pm
rkhusky wrote:
Sat Oct 14, 2017 1:46 pm
nkotbbh wrote:
Fri Oct 13, 2017 1:43 pm
rkhusky wrote:
Fri Oct 13, 2017 1:38 pm
Bond yield are also still at historic lows and when yield increases, bond prices drop. However, people have been saying that for 10 years and those that put everything in cash have missed out. Try putting 50% in stocks and 50% in bonds and then move bonds to stocks over the next year or so.
Yes I read when stocks go high bonds go low with a good paying yield and when market goes low the bond price goes up but low paying yield, just afraid of buying and then losing money.
You need to accept losing money if you invest in stocks or bonds. Otherwise you should invest in CD's.
CD's are not really worth it to me personally, you would really at least need 10,000 minimum to invest in to at least get a decent return, not to mention the waiting period until you can pull it out I would rather do a money market. But am definitely looking in to owning stocks like SOON for the long run and short run. Just trying to do my due diligence to avoid losing money.
Due diligence will not prevent you from losing money. It may prevent you from selling at the wrong tim, after you have lost money.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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Re: Need help with current market (voo,vti)

Post by arcticpineapplecorp. » Sat Oct 14, 2017 3:20 pm

nkotbbh wrote:
Sat Oct 14, 2017 2:35 pm
rkhusky wrote:
Sat Oct 14, 2017 1:46 pm
nkotbbh wrote:
Fri Oct 13, 2017 1:43 pm
rkhusky wrote:
Fri Oct 13, 2017 1:38 pm
Bond yield are also still at historic lows and when yield increases, bond prices drop. However, people have been saying that for 10 years and those that put everything in cash have missed out. Try putting 50% in stocks and 50% in bonds and then move bonds to stocks over the next year or so.
Yes I read when stocks go high bonds go low with a good paying yield and when market goes low the bond price goes up but low paying yield, just afraid of buying and then losing money.
You need to accept losing money if you invest in stocks or bonds. Otherwise you should invest in CD's.
CD's are not really worth it to me personally, you would really at least need 10,000 minimum to invest in to at least get a decent return, not to mention the waiting period until you can pull it out I would rather do a money market. But am definitely looking in to owning stocks like SOON for the long run and short run. Just trying to do my due diligence to avoid losing money.
What does "owning stocks like SOON for the long run and short run" mean? Are you holding stocks for the short run or the long run? That's like the advertising phrase "Spend more, Save more!" You can't do both, unless you're planning on holding some stocks "for the short run" and other stocks "for the long run". Can you elaborate more on what you mean by this curious phrase.

Also, if you are "afraid of losing money" I would caution you to read again the very good advice you have been given. Both stocks and bonds can/do and likely will go down, not up, from time to time. It's called fluctuation. It's what markets do. If you can't stand to see the value of your investments fall from time to time, then you have no business investing. Otherwise, you're entering investing with unrealistic expectations. You're in effect saying, "I'm going to invest...but only in things that go up!" Well, if it was that easy, wouldn't everyone do that?

Now as far as fluctuation is concerned, this means the "value" of what you own goes up or down. But it does not mean you've "lost" money. Some may argue this point and that's fine. Some may see it as merely semantics and that's fine too. But if you plan to buy and hold...if you plan to "stay the course"...if you plan on making money you've got to understand one fundamental thing:

You have no money in your IRA.

Read that again.

You have no money in your IRA. Why not? Because you took what money you had and used that to buy shares in whatever investments you then put in your IRA. There are only shares in your investment account, not money. Don't believe me. Go take a look at your statements. It doesn't say how much money you have, it says how many shares you own. You own shares, not money. You gave that money away when you bought those shares.

Now what? Well if shares are say $50 a piece and you invest $100, you buy 2 shares.

If the price per share drops from $50 to $25...how many shares do you now have?

2 shares (trick question? not really). See, you don't lose what you DO have (shares) when the market goes down. The value of those shares decline but they can also recover. Value changes. The main thing is to understand that you haven't lost anything just because the value of your account dropped. But you will lose money if you sell your shares at the new lower value.

If you sell your shares when they fall to $25 you'll only get back $50 even though you bought those 2 shares for $100 originally. Don't sell when the value of the shares falls. You'll only be creating the very losses you fear. That's called a self-fulfilling prophecy. People do it all the time. Then they curse wall street, banks, corporations and even the government. Funny, they never curse themselves, though they were the ones who sold the stocks at lower prices than originally paid.

Understand that you don't lose money when the market falls.
Understand that you don't make money when the market rises.
Understand that you only lose money when you sell after the market falls (lower than your purchase price)
Understand that you only make money when you sell after the market rises (higher than your purchase price)

The value of your account isn't telling you what you HAVE. It's telling you what you WOULD HAVE if you sell what you have (shares) at their current price. Understand these differences and you'll be a better investor. Best of luck.
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

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whodidntante
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Re: Need help with current market (voo,vti)

Post by whodidntante » Sat Oct 14, 2017 4:09 pm

nkotbbh wrote:
Fri Oct 13, 2017 2:57 pm
pkcrafter wrote:
Fri Oct 13, 2017 2:34 pm
nkotbbh, why would you want to buy VTI and VOO? They are almost the same, so choose just one--VTI.

As for what to do, if you had an allocation in stocks at EJ, then your move is a sideways move and you should continue with the same asset allocation (AA) you had before the transfer. If you are not comfortable with that AA, change the AA now, but then do not move it again until life events change--like nearing retirement. Messing with AA and trying to play timing will generate lower long term returns for sure.

Don't try to find the perfect place because there isn't one. Investing is like being on a seesaw. When we make decisions to improve returns (up) on one thing something else will had set to our satisfaction will go down. You have to find the Goldilocks position -- where you can have a good ride, but not fall off.

Paul
I actually transferred the Edward Jones account over to Vanguard and sold the stocks that Edward Jones was buying me every month "LCEAX" I was always in the negative with them losing money and not gaining, so like I said transferred over and sold them now just trying to see which etf's and bonds to buy.
LCEAX has a front end sales charge so you probably lost 5.5% of your investment the day you bought it. Also, that funds tilts heavily to large value stocks which have lagged large blend in recent years. It's no surprise that you are unhappy with the returns. There weren't any.

100% VTI would be a reasonable option. IUSV is a good large cap value fund if you want to maintain your tilt but use a low cost fund. There is nothing wrong with a large value tilt, in fact it may be a "good time" to adopt one due to recent underperformance of large value.

nkotbbh
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Re: Need help with current market (voo,vti)

Post by nkotbbh » Sat Oct 14, 2017 6:02 pm

triceratop wrote:
Sat Oct 14, 2017 2:59 pm
nkotbbh wrote:
Sat Oct 14, 2017 2:35 pm
rkhusky wrote:
Sat Oct 14, 2017 1:46 pm
nkotbbh wrote:
Fri Oct 13, 2017 1:43 pm
rkhusky wrote:
Fri Oct 13, 2017 1:38 pm
Bond yield are also still at historic lows and when yield increases, bond prices drop. However, people have been saying that for 10 years and those that put everything in cash have missed out. Try putting 50% in stocks and 50% in bonds and then move bonds to stocks over the next year or so.
Yes I read when stocks go high bonds go low with a good paying yield and when market goes low the bond price goes up but low paying yield, just afraid of buying and then losing money.
You need to accept losing money if you invest in stocks or bonds. Otherwise you should invest in CD's.
CD's are not really worth it to me personally, you would really at least need 10,000 minimum to invest in to at least get a decent return, not to mention the waiting period until you can pull it out I would rather do a money market. But am definitely looking in to owning stocks like SOON for the long run and short run. Just trying to do my due diligence to avoid losing money.
Due diligence will not prevent you from losing money. It may prevent you from selling at the wrong tim, after you have lost money.
Just trying to prevent rookie mistakes, and trying to do the right thing I know about fluctuation and there is nothing anybody can do about that. But yeah its about buying at the right time and selling at the right time.

nkotbbh
Posts: 75
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Re: Need help with current market (voo,vti)

Post by nkotbbh » Sat Oct 14, 2017 6:13 pm

arcticpineapplecorp. wrote:
Sat Oct 14, 2017 3:20 pm
nkotbbh wrote:
Sat Oct 14, 2017 2:35 pm
rkhusky wrote:
Sat Oct 14, 2017 1:46 pm
nkotbbh wrote:
Fri Oct 13, 2017 1:43 pm
rkhusky wrote:
Fri Oct 13, 2017 1:38 pm
Bond yield are also still at historic lows and when yield increases, bond prices drop. However, people have been saying that for 10 years and those that put everything in cash have missed out. Try putting 50% in stocks and 50% in bonds and then move bonds to stocks over the next year or so.
Yes I read when stocks go high bonds go low with a good paying yield and when market goes low the bond price goes up but low paying yield, just afraid of buying and then losing money.
You need to accept losing money if you invest in stocks or bonds. Otherwise you should invest in CD's.
CD's are not really worth it to me personally, you would really at least need 10,000 minimum to invest in to at least get a decent return, not to mention the waiting period until you can pull it out I would rather do a money market. But am definitely looking in to owning stocks like SOON for the long run and short run. Just trying to do my due diligence to avoid losing money.
What does "owning stocks like SOON for the long run and short run" mean? Are you holding stocks for the short run or the long run? That's like the advertising phrase "Spend more, Save more!" You can't do both, unless you're planning on holding some stocks "for the short run" and other stocks "for the long run". Can you elaborate more on what you mean by this curious phrase.

Also, if you are "afraid of losing money" I would caution you to read again the very good advice you have been given. Both stocks and bonds can/do and likely will go down, not up, from time to time. It's called fluctuation. It's what markets do. If you can't stand to see the value of your investments fall from time to time, then you have no business investing. Otherwise, you're entering investing with unrealistic expectations. You're in effect saying, "I'm going to invest...but only in things that go up!" Well, if it was that easy, wouldn't everyone do that?

Now as far as fluctuation is concerned, this means the "value" of what you own goes up or down. But it does not mean you've "lost" money. Some may argue this point and that's fine. Some may see it as merely semantics and that's fine too. But if you plan to buy and hold...if you plan to "stay the course"...if you plan on making money you've got to understand one fundamental thing:

You have no money in your IRA.

Read that again.

You have no money in your IRA. Why not? Because you took what money you had and used that to buy shares in whatever investments you then put in your IRA. There are only shares in your investment account, not money. Don't believe me. Go take a look at your statements. It doesn't say how much money you have, it says how many shares you own. You own shares, not money. You gave that money away when you bought those shares.

Now what? Well if shares are say $50 a piece and you invest $100, you buy 2 shares.

If the price per share drops from $50 to $25...how many shares do you now have?

2 shares (trick question? not really). See, you don't lose what you DO have (shares) when the market goes down. The value of those shares decline but they can also recover. Value changes. The main thing is to understand that you haven't lost anything just because the value of your account dropped. But you will lose money if you sell your shares at the new lower value.

If you sell your shares when they fall to $25 you'll only get back $50 even though you bought those 2 shares for $100 originally. Don't sell when the value of the shares falls. You'll only be creating the very losses you fear. That's called a self-fulfilling prophecy. People do it all the time. Then they curse wall street, banks, corporations and even the government. Funny, they never curse themselves, though they were the ones who sold the stocks at lower prices than originally paid.

Understand that you don't lose money when the market falls.
Understand that you don't make money when the market rises.
Understand that you only lose money when you sell after the market falls (lower than your purchase price)
Understand that you only make money when you sell after the market rises (higher than your purchase price)

The value of your account isn't telling you what you HAVE. It's telling you what you WOULD HAVE if you sell what you have (shares) at their current price. Understand these differences and you'll be a better investor. Best of luck.
Totally agree with what you have to say, as I am only trying to avoid doing the wrong thing and just trying to do what 2 of the books say one by john bogle and other by whom I do not recall lets just say warren buffett is where he is because of that one book in particular. But yes I understand its not how much money you have its the value of the funds that you have and there is also dividends that pay out every quarter so that is some gained value and also gained value if the fund goes up. And yes fluctuation is an everyday thing and is nothing we can do about it or how the market perform's.

What I mean by long run: Long run is strictly for retirement so buy and hold through vanguard etf's, bonds, and reit's, maybe a money market?.
The short run: means money for now/fast money which would be like day trading, using a trading platforms like ameritrade, etrade, nadex etc.....

nkotbbh
Posts: 75
Joined: Thu Oct 12, 2017 3:34 pm

Re: Need help with current market (voo,vti)

Post by nkotbbh » Sat Oct 14, 2017 6:15 pm

whodidntante wrote:
Sat Oct 14, 2017 4:09 pm
nkotbbh wrote:
Fri Oct 13, 2017 2:57 pm
pkcrafter wrote:
Fri Oct 13, 2017 2:34 pm
nkotbbh, why would you want to buy VTI and VOO? They are almost the same, so choose just one--VTI.

As for what to do, if you had an allocation in stocks at EJ, then your move is a sideways move and you should continue with the same asset allocation (AA) you had before the transfer. If you are not comfortable with that AA, change the AA now, but then do not move it again until life events change--like nearing retirement. Messing with AA and trying to play timing will generate lower long term returns for sure.

Don't try to find the perfect place because there isn't one. Investing is like being on a seesaw. When we make decisions to improve returns (up) on one thing something else will had set to our satisfaction will go down. You have to find the Goldilocks position -- where you can have a good ride, but not fall off.

Paul
I actually transferred the Edward Jones account over to Vanguard and sold the stocks that Edward Jones was buying me every month "LCEAX" I was always in the negative with them losing money and not gaining, so like I said transferred over and sold them now just trying to see which etf's and bonds to buy.
LCEAX has a front end sales charge so you probably lost 5.5% of your investment the day you bought it. Also, that funds tilts heavily to large value stocks which have lagged large blend in recent years. It's no surprise that you are unhappy with the returns. There weren't any.

100% VTI would be a reasonable option. IUSV is a good large cap value fund if you want to maintain your tilt but use a low cost fund. There is nothing wrong with a large value tilt, in fact it may be a "good time" to adopt one due to recent underperformance of large value.
True I heard a lot of bad things about EJ that is why I transferred over to vanguard, regardless at the end of the day with fees and everything I was not getting anything.

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Contact:

Re: Need help with current market (voo,vti)

Post by pkcrafter » Sat Oct 14, 2017 7:03 pm

nkotbbh, do you have an investment plan and and an investment policy statement? If not, here's some information.

https://www.bogleheads.org/wiki/Boglehe ... art-up_kit

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

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arcticpineapplecorp.
Posts: 2355
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Re: Need help with current market (voo,vti)

Post by arcticpineapplecorp. » Sat Oct 14, 2017 7:21 pm

nkotbbh wrote:
Sat Oct 14, 2017 6:13 pm
Totally agree with what you have to say, as I am only trying to avoid doing the wrong thing and just trying to do what 2 of the books say one by john bogle and other by whom I do not recall lets just say warren buffett is where he is because of that one book in particular. But yes I understand its not how much money you have its the value of the funds that you have and there is also dividends that pay out every quarter so that is some gained value and also gained value if the fund goes up. And yes fluctuation is an everyday thing and is nothing we can do about it or how the market perform's.

What I mean by long run: Long run is strictly for retirement so buy and hold through vanguard etf's, bonds, and reit's, maybe a money market?.
The short run: means money for now/fast money which would be like day trading, using a trading platforms like ameritrade, etrade, nadex etc.....
If you're trying to "avoid doing the wrong thing" then I would stop day trading and trying to get "fast money". Money is made slowly, not quickly. Compounding interest is what creates wealth. Compounding interest takes time to materialize. The biggest benefits of compounding interest come much later, not now. See the image at the end of this post. It shows what would happen if you invest around $300 a month for 40 years and earn 8% per year compounding. See how it grows the most towards the end?

There's no way to know what the right or wrong thing is in advance. Remember Dr. Shiller thought stocks were overvalued in 1996, but were they? Maybe compared to the past, but not compared to the future. And is it the wrong thing if you buy today, the market tumbles tomorrow, but then it's higher 10-20 years from now?

Read this following chapter called "Misfortunes and Blessings" from the book by Derek Lin called "The Tao of Everyday life":
(https://books.google.com/books?id=id_Hb ... ng&f=false) or here: http://taoism.net/living/2004/200408.htm:
In the northern frontier of ancient China, there lived a man who was particularly skilled in raising horses. People knew of him and called him Sai Ong - literally "Old Frontiersman."

One day, for some unknown reason, his horse got loose and ran off into the Hu territory beyond the Great Wall. The Hu tribes were hostile toward the Chinese, so everyone assumed the horse was as good as lost.

Horses were very valuable to the people living at the frontier, so they regarded this loss as a great financial setback. They visited Sai Ong to express their sympathies, but Sai Ong's elderly father surprised them by remaining calm and unaffected. Much to their puzzlement, the old man asked: "Who says this cannot be some sort of blessing?"

Months later, the horse returned to the stable with a companion - a fine steed of the Hu breed. It was as if Sai Ong's wealth suddenly doubled. Everyone came by to marvel at the new horse and to congratulate him, but again his elderly father showed no great emotions. He said: "Who says this cannot be some sort of misfortune?"

Sai Ong's son enjoyed riding and took the new horse out for a ride. An accident occurred, causing him to fall badly and break a leg. Again sympathetic people came to console the family, and again they saw that the grandfather remained as calm as ever. Just like before, he told them: "Who says this cannot be some sort of blessing?"

One year later, the Hu people amassed and crossed the border into China. All the able-bodied young men were summoned into the army to take up arms in defense. Fierce battles ensued, resulting in heavy casualties. Among the inhabitants of the northern frontier, nine out of ten men died.

Sai Ong's son did not go into battle due to his broken leg. Because of this, he was spared that terrible fate, and his family survived the war intact.

Thus, blessings may turn out to be misfortunes, and misfortunes blessings. They change from one to the other endlessly; the workings of destiny has a truly fathomless depth. source: http://taoism.net/living/2004/200408.htm

I presume you've heard the fable of The Tortoise and The Hare? If so, then think about what you're doing trying to get fast money. Don't be a hare. Day trading does not work. If it did, everyone would be doing it. It was big in the 90s because the market kept going up 20-30% a year. People were making money falling over themselves, until the music stopped playing and day traders were left without a chair to sit on.

The economics of day trading say that you'll lose more than you will make because of the costs incurred and taxes which on short term gains are higher. Costs reduce your returns. You need to pay attention to the costs you pay for your investments. It's the bottom line that matters, that's growth MINUS expenses. It's good you realized that the high costs of EJ were reducing your returns. Don't make the same mistake by trading.

Image

source: https://www.kitces.com/blog/is-save-for ... nt-advice/
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

nkotbbh
Posts: 75
Joined: Thu Oct 12, 2017 3:34 pm

Re: Need help with current market (voo,vti)

Post by nkotbbh » Sat Oct 14, 2017 9:10 pm

pkcrafter wrote:
Sat Oct 14, 2017 7:03 pm
nkotbbh, do you have an investment plan and and an investment policy statement? If not, here's some information.

https://www.bogleheads.org/wiki/Boglehe ... art-up_kit

Paul
Hi Paul, retirement through my vanguard account as john bogle would say buy and hold, as far as investment plan I was thinking a simple 3 fund portfolio.

nkotbbh
Posts: 75
Joined: Thu Oct 12, 2017 3:34 pm

Re: Need help with current market (voo,vti)

Post by nkotbbh » Sat Oct 14, 2017 9:17 pm

arcticpineapplecorp. wrote:
Sat Oct 14, 2017 7:21 pm
nkotbbh wrote:
Sat Oct 14, 2017 6:13 pm
Totally agree with what you have to say, as I am only trying to avoid doing the wrong thing and just trying to do what 2 of the books say one by john bogle and other by whom I do not recall lets just say warren buffett is where he is because of that one book in particular. But yes I understand its not how much money you have its the value of the funds that you have and there is also dividends that pay out every quarter so that is some gained value and also gained value if the fund goes up. And yes fluctuation is an everyday thing and is nothing we can do about it or how the market perform's.

What I mean by long run: Long run is strictly for retirement so buy and hold through vanguard etf's, bonds, and reit's, maybe a money market?.
The short run: means money for now/fast money which would be like day trading, using a trading platforms like ameritrade, etrade, nadex etc.....
If you're trying to "avoid doing the wrong thing" then I would stop day trading and trying to get "fast money". Money is made slowly, not quickly. Compounding interest is what creates wealth. Compounding interest takes time to materialize. The biggest benefits of compounding interest come much later, not now. See the image at the end of this post. It shows what would happen if you invest around $300 a month for 40 years and earn 8% per year compounding. See how it grows the most towards the end?

There's no way to know what the right or wrong thing is in advance. Remember Dr. Shiller thought stocks were overvalued in 1996, but were they? Maybe compared to the past, but not compared to the future. And is it the wrong thing if you buy today, the market tumbles tomorrow, but then it's higher 10-20 years from now?

Read this following chapter called "Misfortunes and Blessings" from the book by Derek Lin called "The Tao of Everyday life":
(https://books.google.com/books?id=id_Hb ... ng&f=false) or here: http://taoism.net/living/2004/200408.htm:
In the northern frontier of ancient China, there lived a man who was particularly skilled in raising horses. People knew of him and called him Sai Ong - literally "Old Frontiersman."

One day, for some unknown reason, his horse got loose and ran off into the Hu territory beyond the Great Wall. The Hu tribes were hostile toward the Chinese, so everyone assumed the horse was as good as lost.

Horses were very valuable to the people living at the frontier, so they regarded this loss as a great financial setback. They visited Sai Ong to express their sympathies, but Sai Ong's elderly father surprised them by remaining calm and unaffected. Much to their puzzlement, the old man asked: "Who says this cannot be some sort of blessing?"

Months later, the horse returned to the stable with a companion - a fine steed of the Hu breed. It was as if Sai Ong's wealth suddenly doubled. Everyone came by to marvel at the new horse and to congratulate him, but again his elderly father showed no great emotions. He said: "Who says this cannot be some sort of misfortune?"

Sai Ong's son enjoyed riding and took the new horse out for a ride. An accident occurred, causing him to fall badly and break a leg. Again sympathetic people came to console the family, and again they saw that the grandfather remained as calm as ever. Just like before, he told them: "Who says this cannot be some sort of blessing?"

One year later, the Hu people amassed and crossed the border into China. All the able-bodied young men were summoned into the army to take up arms in defense. Fierce battles ensued, resulting in heavy casualties. Among the inhabitants of the northern frontier, nine out of ten men died.

Sai Ong's son did not go into battle due to his broken leg. Because of this, he was spared that terrible fate, and his family survived the war intact.

Thus, blessings may turn out to be misfortunes, and misfortunes blessings. They change from one to the other endlessly; the workings of destiny has a truly fathomless depth. source: http://taoism.net/living/2004/200408.htm

I presume you've heard the fable of The Tortoise and The Hare? If so, then think about what you're doing trying to get fast money. Don't be a hare. Day trading does not work. If it did, everyone would be doing it. It was big in the 90s because the market kept going up 20-30% a year. People were making money falling over themselves, until the music stopped playing and day traders were left without a chair to sit on.

The economics of day trading say that you'll lose more than you will make because of the costs incurred and taxes which on short term gains are higher. Costs reduce your returns. You need to pay attention to the costs you pay for your investments. It's the bottom line that matters, that's growth MINUS expenses. It's good you realized that the high costs of EJ were reducing your returns. Don't make the same mistake by trading.

Image

source: https://www.kitces.com/blog/is-save-for ... nt-advice/
Hi Artic, interesting story, I totally understand that what you are saying as told by both warren buffett and john bogle to buy and hold and indexing is a winners game, but unlike many ceo's, doctor's, attorney's who make a lot of money I am not one of those so I would like to make as much money as soon as possible but without having to wait years down the line, but truth be told its better to have something when it comes to retirement as opposed to not having nothing. And yes I have heard that when it comes to day trading after cost and taxes it is not worth it. So I think as a rookie as my name says nkothbh (new kid on the block bogle head) I am thinking a simple 3 fund portfolio and maybe more later?

carofe
Posts: 300
Joined: Thu Mar 20, 2014 7:21 pm

Re: Need help with current market (voo,vti)

Post by carofe » Sat Oct 14, 2017 9:24 pm

arcticpineapplecorp. wrote:
Sat Oct 14, 2017 3:20 pm
nkotbbh wrote:
Sat Oct 14, 2017 2:35 pm
rkhusky wrote:
Sat Oct 14, 2017 1:46 pm
nkotbbh wrote:
Fri Oct 13, 2017 1:43 pm
rkhusky wrote:
Fri Oct 13, 2017 1:38 pm
Bond yield are also still at historic lows and when yield increases, bond prices drop. However, people have been saying that for 10 years and those that put everything in cash have missed out. Try putting 50% in stocks and 50% in bonds and then move bonds to stocks over the next year or so.
Yes I read when stocks go high bonds go low with a good paying yield and when market goes low the bond price goes up but low paying yield, just afraid of buying and then losing money.
You need to accept losing money if you invest in stocks or bonds. Otherwise you should invest in CD's.
CD's are not really worth it to me personally, you would really at least need 10,000 minimum to invest in to at least get a decent return, not to mention the waiting period until you can pull it out I would rather do a money market. But am definitely looking in to owning stocks like SOON for the long run and short run. Just trying to do my due diligence to avoid losing money.
What does "owning stocks like SOON for the long run and short run" mean? Are you holding stocks for the short run or the long run? That's like the advertising phrase "Spend more, Save more!" You can't do both, unless you're planning on holding some stocks "for the short run" and other stocks "for the long run". Can you elaborate more on what you mean by this curious phrase.

Also, if you are "afraid of losing money" I would caution you to read again the very good advice you have been given. Both stocks and bonds can/do and likely will go down, not up, from time to time. It's called fluctuation. It's what markets do. If you can't stand to see the value of your investments fall from time to time, then you have no business investing. Otherwise, you're entering investing with unrealistic expectations. You're in effect saying, "I'm going to invest...but only in things that go up!" Well, if it was that easy, wouldn't everyone do that?

Now as far as fluctuation is concerned, this means the "value" of what you own goes up or down. But it does not mean you've "lost" money. Some may argue this point and that's fine. Some may see it as merely semantics and that's fine too. But if you plan to buy and hold...if you plan to "stay the course"...if you plan on making money you've got to understand one fundamental thing:

You have no money in your IRA.

Read that again.

You have no money in your IRA. Why not? Because you took what money you had and used that to buy shares in whatever investments you then put in your IRA. There are only shares in your investment account, not money. Don't believe me. Go take a look at your statements. It doesn't say how much money you have, it says how many shares you own. You own shares, not money. You gave that money away when you bought those shares.

Now what? Well if shares are say $50 a piece and you invest $100, you buy 2 shares.

If the price per share drops from $50 to $25...how many shares do you now have?

2 shares (trick question? not really). See, you don't lose what you DO have (shares) when the market goes down. The value of those shares decline but they can also recover. Value changes. The main thing is to understand that you haven't lost anything just because the value of your account dropped. But you will lose money if you sell your shares at the new lower value.

If you sell your shares when they fall to $25 you'll only get back $50 even though you bought those 2 shares for $100 originally. Don't sell when the value of the shares falls. You'll only be creating the very losses you fear. That's called a self-fulfilling prophecy. People do it all the time. Then they curse wall street, banks, corporations and even the government. Funny, they never curse themselves, though they were the ones who sold the stocks at lower prices than originally paid.

Understand that you don't lose money when the market falls.
Understand that you don't make money when the market rises.
Understand that you only lose money when you sell after the market falls (lower than your purchase price)
Understand that you only make money when you sell after the market rises (higher than your purchase price)

The value of your account isn't telling you what you HAVE. It's telling you what you WOULD HAVE if you sell what you have (shares) at their current price. Understand these differences and you'll be a better investor. Best of luck.
Excellent. I'm saving that.
US Total Stock Market + Intermediate Term Bond. That's it.

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