Help in understanding my performance.

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persona4826
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Joined: Sun Dec 18, 2016 11:53 pm

Help in understanding my performance.

Post by persona4826 » Fri Oct 20, 2017 8:16 am

Hello all,

With the help of several individuals in this forum, I started investing this year. I had available to me the TSP (I'm a federal employee), a Roth IRA and my HSA.

With their guidance, I set up my TSP with 86% C, 7% S, and 7% G. My Roth is 100% VSS, and my HSA is 100% VBR.

Overall portfolio:
61.33% VIIIX
18.78% VSS
10.23% VBR
05.00% VIEIX
04.67% VMMX

My X-Ray:
18 19 21
09 10 08
07 05 03

I've reviewed my performance with Personal Capital, and it seems that my year-to-date gains are 11.87% TSP, 15.48% VSS, and 4.27% VBR. Personal Capital also says that I am under-invested in International stocks.

A friend of mine thinks I am doing myself a disservice by not using a consultant (she uses Edward Jones and another); though I am trying to educate myself, and like the idea of index funds (and like the commission-free ETFs offered by TDAmeritrade; and yes, am aware of the upcoming changes).

Am I doing well so far, or do I need a shake-up? If more information or details are required, let me know and I will provide.

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ruralavalon
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Location: Illinois

Re: Help in understanding my performance.

Post by ruralavalon » Fri Oct 20, 2017 8:46 am

persona4826 wrote:
Fri Oct 20, 2017 8:16 am
Hello all,

With the help of several individuals in this forum, I started investing this year. I had available to me the TSP (I'm a federal employee), a Roth IRA and my HSA.

With their guidance, I set up my TSP with 86% C, 7% S, and 7% G. My Roth is 100% VSS, and my HSA is 100% VBR.

Overall portfolio:
61.33% VIIIX, Vanguard Institutional Index Fund
18.78% VSS, Vanguard FTSE All-World ex-U.S. Small Cap ETF
10.23% VBR, Vanguard Small-cap Value ETF
05.00% VIEIX, Vanguard Extended Market Fund Institutional
04.67% VMMX, Is this VMMXX, Vanguard Prime Money Market Fund?

My X-Ray:
18 19 21
09 10 08
07 05 03

I've reviewed my performance with Personal Capital, and it seems that my year-to-date gains are 11.87% TSP, 15.48% VSS, and 4.27% VBR. Personal Capital also says that I am under-invested in International stocks.

A friend of mine thinks I am doing myself a disservice by not using a consultant (she uses Edward Jones and another); though I am trying to educate myself, and like the idea of index funds (and like the commission-free ETFs offered by TDAmeritrade; and yes, am aware of the upcoming changes).

Am I doing well so far, or do I need a shake-up? If more information or details are required, let me know and I will provide.
It's better if you don't make responding members have to look up the funds or ETFs represented by all those ticker symbols. Most of us don't have many tickers memorized other than for funds we use ourselves. Also it's easy to mistype a ticker symbol, and leave it uncertain what you are referring to.

Sorry for the lecture.

What is the x-Ray for the domestic stocks, and what is the separate x-Ray for the International stocks? The x-Ray for all combined means little in my opinion.

I don't see any international large-cap, only international small-cap. Skipping international large cap is a serious omission in my opinion. It looks like you have international stocks at about 20% of stocks, which in my opinion is within the range of what is reasonable.

I do think that most people can learn to manage their own investments. I suggest that t you read one or two books on general investing, please see the wiki article "books: recommendations and reviews".

Also ask questions here, and peruse the wiki for subjects that concern you. See the "getting started" link below.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

dbr
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Re: Help in understanding my performance.

Post by dbr » Fri Oct 20, 2017 8:52 am

persona4826 wrote:
Fri Oct 20, 2017 8:16 am


A friend of mine thinks I am doing myself a disservice by not using a consultant (she uses Edward Jones and another); though I am trying to educate myself, and like the idea of index funds (and like the commission-free ETFs offered by TDAmeritrade; and yes, am aware of the upcoming changes).
That's funny. An EJ or other consultant is for the most part a salesman steadily extracting money from her assets through management fees and costs on the investments they recommend. That is one of the sure fire ways to reduce what investing success you would otherwise have had.

The advisor conundrum even when advice might be helpful to an investor is that investors cannot afford to pay what (with a few possible exceptions) advisors need to earn to stay in business. When I refer to a few possible exceptions that is not anyone I have ever met or could specifically recommend from my own knowledge.

persona4826
Posts: 48
Joined: Sun Dec 18, 2016 11:53 pm

Re: Help in understanding my performance.

Post by persona4826 » Fri Oct 20, 2017 12:33 pm

Sorry for the lecture.
No problem. I appreciate the tip. Also, yes, I was meaning the Vanguard Prime Money Market Fund. Tip validated!.
What is the x-Ray for the domestic stocks, and what is the separate x-Ray for the International stocks? The x-Ray for all combined means little in my opinion.
Domestic, I am using Vanguard Institutional Index Fund, Vanguard Extended Market Fund Institutional, and Vanguard Small-cap Value ETF:

22 24 24
07 07 05
05 04 02

International, which is Vanguard FTSE All-World ex-U.S. Small Cap ETF alone:

00 01 02
21 21 24
13 10 08
I don't see any international large-cap, only international small-cap. Skipping international large cap is a serious omission in my opinion. It looks like you have international stocks at about 20% of stocks, which in my opinion is within the range of what is reasonable.
I (and Personal Capital) agree. When I started investing, forum members opined that the TSP international option (MSCI EAFE index) was too "safe" and to go solely with VSS at the time. I really do want a stronger international presence, which I could capture with the large caps as you suggest, or by making the percentage bigger. Seeing as I have to sell off VSS and VBR if I want to stay commission-free, I have an opportunity to replace them with potentially-better options and to rebalance my investments as a whole.

The most-expedient thing to do would be to keep it all as-is but with replacements for VSS and VBR (which I am researching via viewtopic.php?f=10&t=229801. This, at least, wouldn't leave me in a worse spot once my Vanguard funds switch to commission.

The goal, though, is to gain international large caps. Can I do that within the 30% of my portfolio that TDAmeritrade has opened, or will I need to rebalance my TSP as well?

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ruralavalon
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Re: Help in understanding my performance.

Post by ruralavalon » Fri Oct 20, 2017 2:49 pm

I agree with dbr that hiring an Edward Jones advisor would be a very bad idea.
persona4826 wrote:
Fri Oct 20, 2017 12:33 pm
ruralavalon wrote:What is the x-Ray for the domestic stocks, and what is the separate x-Ray for the International stocks? The x-Ray for all combined means little in my opinion.
Domestic, I am using Vanguard Institutional Index Fund, Vanguard Extended Market Fund Institutional, and Vanguard Small-cap Value ETF:

22 24 24
07 07 05
05 04 02
Per your domestic stock fund choices you are apparently attempting a small-cap value tilt, but do not achieve it per the x-Ray.

If you want a domestic small-cap value tilt, then try x-raying something like a 2:1 or 3:1 ratio of Institutional Index Fund to Small Cap Value ETF, omitting the extended market ETF.

For a Rick Ferri article on this Google "Winning with small value stocks".

persona4826 wrote:International, which is Vanguard FTSE All-World ex-U.S. Small Cap ETF alone:

00 01 02
21 21 24
13 10 08
ruralavalon wrote:I don't see any international large-cap, only international small-cap. Skipping international large cap is a serious omission in my opinion. It looks like you have international stocks at about 20% of stocks, which in my opinion is within the range of what is reasonable.
I (and Personal Capital) agree. When I started investing, forum members opined that the TSP international option (MSCI EAFE index) was too "safe" and to go solely with VSS at the time.

I agree that the I Fund is not the best, but I don't think it's "too safe". I think it's but not the best because it invests only in stocks of larger companies only in developed markets, excluding Canada. It is not fully diversified. The most serious omission in my opinion is the omission of Emerging Markets, not the omission of small-cap stocks. Small caps represent only about 4% of a total international fund, an almost trivial amount.

I think it's a good idea to use both the I Fund in the TSP and Schwab Emerging Markets Equity ETF (SCHE) ER 0.13% in the other account.

persona4826 wrote:I really do want a stronger international presence, which I could capture with the large caps as you suggest, or by making the percentage bigger. Seeing as I have to sell off VSS and VBR if I want to stay commission-free, I have an opportunity to replace them with potentially-better options and to rebalance my investments as a whole.

The most-expedient thing to do would be to keep it all as-is but with replacements for VSS and VBR (which I am researching via viewtopic.php?f=10&t=229801. This, at least, wouldn't leave me in a worse spot once my Vanguard funds switch to commission.

The goal, though, is to gain international large caps. Can I do that within the 30% of my portfolio that TDAmeritrade has opened, or will I need to rebalance my TSP as well?
Think about adding some I Fund in the TSP, and adding some SCHE at TDAmeritrade.

I have no idea what percentage of the total portfolio is in each of your 7 accounts (TSP, HSA, 2 solo 401ks, 2 Roth IRAs, taxable), the annual contributions you intend to each account, and what investments are in each of the accounts, so I am unable to make a more specific suggestion.

Since TDAmeritrade is strictly limiting its commission free ETF line up, I think it's likely better to consider moving accounts to Vanguard for direct, no hassle, free access to their funds and ETFs.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

persona4826
Posts: 48
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Re: Help in understanding my performance.

Post by persona4826 » Fri Oct 20, 2017 4:28 pm

Since TDAmeritrade is strictly limiting its commission free ETF line up, I think it's likely better to consider moving accounts to Vanguard for direct, no hassle, free access to their funds and ETFs.
I am considering that, but my HSA is brokered with TDA. I don't believe I can move the HSA, but I should be able to move my Roth IRA. I like the idea of keeping things simple, and would prefer to keep my Roth and HSA together; but I just might have to move my Roth over to Vanguard in order to keep my international exposure. I am considering opening a Plan 529, which I could also use through Vanguard to add more options.
I have no idea what percentage of the total portfolio is in each of your 7 accounts (TSP, HSA, 2 solo 401ks, 2 Roth IRAs, taxable), the annual contributions you intend to each account, and what investments are in each of the accounts, so I am unable to make a more specific suggestion.
Right now, all I have for investing are my TSP, Roth IRA, and HSA (which are all non-taxable, I believe). I am maxing out all three accounts, and saving the rest in a high-yield account. I have enough saved to max out a Plan 529 this year, but I might move in December which makes me hesitate. I don't know what other vehicles I can utilize to get more invested.

This chart is my total portfolio:

61.33% TSP C Fund
18.78% Vanguard FTSE All-World ex-U.S. Small Cap ETF
10.23% Vanguard Small-cap Value ETF
05.00% TSP S Fund
04.67% TSP G Fund

Are you also asking how much I have in each account?

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ruralavalon
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Re: Help in understanding my performance.

Post by ruralavalon » Fri Oct 20, 2017 6:33 pm

Please look at the post "asking portfolio questions" to see how the information is best best conveyed, covering all accounts. Please give the complete information, in that format.

You say that "[r]ight now, all [you] have for investing are [your] TSP, Roth IRA and HSA". What are you doing with the 2 solo 401ks and taxable account?

It usually best to treat all accounts together as a single unified portfolio, rather than separately. That level of detailed information is necessary necessary if anyone is to suggest ideas for what funds or ETFs are best placed in particular accounts, to achieve your desired asset allocation.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

persona4826
Posts: 48
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Re: Help in understanding my performance.

Post by persona4826 » Fri Oct 20, 2017 9:03 pm

What are you doing with the 2 solo 401ks and taxable account?
Pardon? I just have my TSP (in three funds), the Roth, and my HSA. I have two 401ks and a taxable account in addition to those? :shock:

I must have completely deluded myself.... :confused

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ruralavalon
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Location: Illinois

Re: Help in understanding my performance.

Post by ruralavalon » Sat Oct 21, 2017 7:54 am

persona4826 wrote:
Fri Oct 20, 2017 9:03 pm
ruralavalon wrote:What are you doing with the 2 solo 401ks and taxable account?
Pardon? I just have my TSP (in three funds), the Roth, and my HSA. I have two 401ks and a taxable account in addition to those? :shock:

I must have completely deluded myself.... :confused
persona4826 wrote:The most-expedient thing to do would be to keep it all as-is but with replacements for VSS and VBR (which I am researching via viewtopic.php?f=10&t=229801. This, at least, wouldn't leave me in a worse spot once my Vanguard funds switch to commission.
This is where I got confused, via the link you gave and not noticing that it was not a link to a post of yours. My apologies.
ruralavalon wrote:
Fri Oct 20, 2017 6:33 pm
Please look at the post "asking portfolio questions" to see how the information is best best conveyed, covering all accounts. Please give the complete information, in that format.
Please go ahead and give the information requested in the "asking portfolio questions" post using that format, and covering your TSP, Roth IRA and HSA accounts.

Are you trying for a small-cap value tilt in your domestic stocks?
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

persona4826
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Re: Help in understanding my performance.

Post by persona4826 » Sat Oct 21, 2017 11:31 am

I am answering to the best of my ability.

Emergency funds: I have 6+ months of expenses available.
Debt: $0
Tax Filing Status: single
Tax Rate: 25% Federal, 06% State
State of Residence: MO (small chance of moving to MD in December or 2018; lesser chance of IL/IN mid-2018)
Age: 33 (34 in November)
Desired Asset allocation: 95% stocks / 05% bonds
Desired International allocation: 20% of stocks (not sure how much I should go for, so this is my current amount)

I am unsure how to break-down each asset class.

My portfolio (TSP, Roth, IRA outlined below) is currently in the mid five-figures (low six-figures if I add my savings accounts).

I do not know the split of my assets and contributions between taxable and tax-advantaged accounts.

Current retirement assets

Taxable
40% cash

TSP
35% C Fund (mimicked as VIIIX, 0.02%)
06% S Fund (mimicked as VIEIX, 0.07%)
04% G Fund (mimicked as VMMXX, 0.15%)

Roth IRA at TDAmeritrade --> may move it all to Vanguard
10% VSS (0.13%)

HSA at TDAmeritrade (has to stay with TDA)
05% VBR (0.07%) --> may sell/convert/trade (what's the difference?) all of VBR for SCHE (0.13%) to stay commission-free

Annual Contributions

This year, I am maxing out all funds.

$18,000 TSP
$5,500 Roth IRA
$3,400 HSA
$12,000 taxable (this is an estimate of what will I put into my savings account after contributing to the above)

Available funds

I am not sure what this is. I assume the options that TDAmeritrade and Vanguard provide?

Questions:

1. How do I add more and or stronger international elements?

2. How can I add real estate?

3. Should I add a Plan 529? What other options do I have?

4. I might have too much in my savings account (lying dormant); but if I do move to one of the states mentioned above, I reckon my monthly expenses could double (or more) and I would have to buy a car. The chance of moving is there, but I have no clue as to if or when. Should I, regardless, put some of these savings into play?
Are you trying for a small-cap value tilt in your domestic stocks?
I am not sure what I am doing in that regard.

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ruralavalon
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Re: Help in understanding my performance.

Post by ruralavalon » Sat Oct 21, 2017 1:18 pm

It's good to see that you are debt free, that you are making the maximum contributions to a tax-advantaged accounts, and using are index funds with very low expense ratios. You are off to a great start.

Happy birthday next month :) .

persona4826 wrote:
Sat Oct 21, 2017 11:31 am
Age: 33 (34 in November)
Desired Asset allocation: 95% stocks / 05% bonds
Desired International allocation: 20% of stocks (not sure how much I should go for, so this is my current amount)
. . . . .
2. How can I add real estate?
I suggest around 20% bonds at age 33-34. That is expected to significantly decrease portfolio volatility (risk) with only a relatively smaller impact on portfolio performance. Please see the wiki article "Asset allocation", and the wiki article Boglehead's Investment Philosophy part 3 "Never bear too much or too little risk".

In my opinion 20% of stocks in international stocks is within the range of what is reasonable.

In my opinion around 10% of domestic stocks in a real estate fund is reasonable.

This could work out to about 20% bonds, 15% international stocks, 05% REIT Index fund, and 60% other domestic stocks. Asset allocation is a very personal decision, which you must make based on your own ability, willingness and need to take risk.


persona4826 wrote: Emergency funds: I have 6+ months of expenses available.
. . . . .
My portfolio (TSP, Roth, IRA outlined below) is currently in the mid five-figures (low six-figures if I add my savings accounts).
I would normally assume that the savings accounts referred to are cash available for long-term/retirement investing, as distinct from your emergency fund. Is that assumption correct? Or is that your emergency fund? Or some of both?

Please let me know.

Whether that 40% is available for long-term/retirement investing will make a very big difference in what the best investments will be in the TSP, Roth IRA and HSA.

In a taxable account for long-term investing the most tax-efficient funds are international stock index funds and domestic stock index funds. Please see the wiki article "tax-efficient fund placement". So if some or all of that cash the cash is to be used for long-term/retirement investing then you would use less C Fund and perhaps no I Fund in the TSP.
Last edited by ruralavalon on Sat Oct 21, 2017 1:33 pm, edited 1 time in total.
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persona4826
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Re: Help in understanding my performance.

Post by persona4826 » Sat Oct 21, 2017 1:27 pm

I would normally assume that the savings accounts referred to are cash available for long-term/retirement investing, as distinct from your emergency fund. Is that assumption correct? Or is that your emergency fund? Or some of both?
Yes, I excluded the emergency funds from the savings account value. Yet, if I move within the next, say, six months, I assume this would be reason enough to not use the full amount.

Also, I am willing to take on more risk: more towards 5% in bonds than 20%.

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ruralavalon
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Re: Help in understanding my performance.

Post by ruralavalon » Sat Oct 21, 2017 4:29 pm

Accounts.
I understand the desire to keep all accounts at a single location like TDAmeritrade, for convenience.

Your taxable account will have a large impact going forward, and TDAmeritrade is drastically limiting commission free access to ETFs you wish to use. Therefore I think it's best to open your taxable account at Vanguard and rollover your Roth IRA at TDAmeritrade to a Roth IRA at Vanguard.

This gives you simple, no hassle, commission free access to all Vanguard ETFs and mutual funds in those accounts.


Fund selection and placement.
In selecting funds strive for a good combination of broad diversification (to decrease your risk) and low expense ratios (to increase your net return). To easily achieve that I suggest the simple three-fund type portfolio. Please see the wiki article "three-fund portfolio", and the forum discussion "the three-fund portfolio".

Domestic stocks. I prefer a total stock market index fund for domestic stocks, if that is available. In a work-based account which does offer that option, a S&P 500 index fund (like the C Fund in your TSP) is good enough for domestic stocks. An S&P 500 index fund covers 81% of the domestic stock market, and in the 25 years since the creation of the first total stock market index fund the two types of fund have had almost identical performance.

If you prefer to add to that you can use a 4:1 ratio of C Fund to S Fund to mimic the content of a total stock market index fund. Please see the wiki article "approximating total stock market".

International stocks. The I Fund (a MSCI EAFE index fund) offered in your TSP is not fully diversified, it covers only stocks of larger companies only in developed markets, excluding Canada. Vanguard Total International Index Fund covers stocks of both larger and smaller companies, in both emerging and developed markets, including Canada. Therefore I prefer using the Vanguard fund over the I Fund whenever possible. If you use the Vanguard international fund in a taxable account you are entitled to use the Foreign Tax Credit, which you can't do if in a tax-advantaged account.

Bonds. In general a bond fund should be held in a tax-advantaged account, preferably a tax-deferred account like your TSP. Please see the wiki article "tax-efficient fund placement". The F Fund tracks the Bloomberg Barclays U.S. Aggregate Bond Index, the broadest domestic bond index available, and is the near equivalent of Vanguard Total Bond Market Index Fund. In the example portfolio I suggest either the G Fund, the F Fund, or a combination.

In general in the taxable account it's better to use total stock market index funds, for lower taxes. Please see the wiki article "tax-efficient fund placement".

It's sometimes helpful for easy portfolio management and rebalancing to have all three basic fund types (bonds, international stocks, and domestic stocks) inside one large a account. That could be your TSP. That opens the possibility of wanting to add the I Fund in the TSP sometime in the future.


Example portfolio.
Here is an example portfolio which you could consider. This is a three-fund type portfolio, with the addition of a real estate investment. The asset allocation is 20% bonds, 15% international stocks, 05% REIT Index ETF, and 60% other domestic stocks. Current portfolio = "low six-figures". New annual contributions = $38.9k.

The idea is to switch both existing balances and new contributions to the funds or ETFs stated. The percentages are percentages of the total portfolio, not percentages of any particular account. Sometimes I state 00% to indicate a fund you might want to add in the future. All percentages are rounded off so may not add up exactly.

I suggest using Vanguard mutual funds because I think they are more convenient to use than ETFs, when used in a Vanguard account. If you prefer ETFs, each Vanguard mutual fund I mention has a Vanguard ETF equivalent.
Total Stock = VTI
Total International = VXUS

Taxable account @ Vanguard (40% of total; adds $12k/yr = 31% of new annual contributions)
25%, Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) ER 0.04%
15%, Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) 0.11%

TSP (46% of total; adds $18k/yr = 46% of new annual contributions).
26%, C Fund (a S&P 500 index fund) ER 0.038%
00%, I Fund (a MSCI EAFE index fund) ER 0.038%
20%, G Fund, or F Fund, or a combination ER 0.038%

Roth IRA @ Vanguard, ex-TDAmeritrade (10% of total;adds $5.5k/yr = 14% of new annual contributions).
10%, Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) ER 0.04%

HSA at TDAmeritrade, has to stay with TDAmeritrade (05% of total; adds $3.4k/yr = 09% of new annual contributions).
05%, Schwab U.S. REIT ETF (SCHH) ER 0.07%


Rebalancing.
Because the funds will grow at different and unpredictable rates, every year or two you will probably need to rebalance in order to get back to your desired asset allocation.

You can easily adjust the stock/bond mix simply by exchanging between funds inside your TSP.

You adjust the domestic/international stock mix by how you direct your new contributions into the taxable account, or if necessary by adding some I Fund in your TSP. Avoid rebalancing by exchanging between funds in your taxable account, because that will create unnecessary income tax liability.

persona4826 wrote:Questions:

1. How do I add more and or stronger international elements?
I suggest using Vanguard Total International Index Fund in your taxable account. That fund is very diversified, much more than the I Fund, and using it in the taxable account lets you take the Foreign Tax Credit.

2. How can I add real estate?
I suggest a Schwab ETF in the HSA, which you have to keep at TDAmeritrade.

3. Should I add a Plan 529? What other options do I have?
Since you are single with no children, I suggest not using a 529. I don't see any additional tax-advantaged accounts you could use.

4. I might have too much in my savings account (lying dormant); but if I do move to one of the states mentioned above, I reckon my monthly expenses could double (or more) and I would have to buy a car. The chance of moving is there, but I have no clue as to if or when. Should I, regardless, put some of these savings into play?
Yes, invest what you don't need for your six months emergency fund.
My thought is that uncertain expenses at an indefinite time ("no clue as to if or when") don't need to be invested separately, instead invest "as if" for the long-term.

If plans become more concrete then you can adjust by stopping the $12k/yr contributions to the taxable account, and if necessary withdrawing from the taxable account.

ruralavalon wrote:Are you trying for a small-cap value tilt in your domestic stocks?
I am not sure what I am doing in that regard.
So I left that out of the example portfolio. A small-cap value tilt is something you should do only if you are certain,after reading up on the idea, that a small-cap value tilt is what you want long-term.
I suggest that you read one or two books on general investing, please see the wiki article "books: recommendations and reviews".

If you have any questions just ask.

I hope that this helps.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

persona4826
Posts: 48
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Re: Help in understanding my performance.

Post by persona4826 » Sat Oct 21, 2017 5:47 pm

I will consider your advice, ruralavalon. Thank you.

One more (multi-part) question today, if I may.

So far, all I have done, in terms of action on my part, was buy shares of VSS and VBR. I auto-fund my TSP. I auto-fund the Roth and HSA too, but every two weeks or so, I would log in to TDA, buy as many shares as I could, and log out. I have DRIP on both of the latter funds, FYI.

When I move my Roth from TDA to Vanguard; what should I be aware of, and what should I notify each party about? Can my VSS shares be converted to VTI or VTSAX while transitioning to Vanguard, or do I do the buying/selling at TDA or Vanguard?

What exactly am I doing when I change my HSA from VBR to either the SCHE or SCHH funds? Selling, convert, trading? I last bought several shares on Oct. 16, and was told by a TDA rep that they will be free from charges if I wait to sell them starting Nov. 17. [Update: Just spoke with a TDA rep, and they will waive the short-term trading fee for me as I expressed my concerns over the changes to to ETFs. It looks I'll have to wait for a day when VBR is high, and sell off all of my shares then. I know the mantra, "buy low, sell high", but what are indicators of this?]
Last edited by persona4826 on Sat Oct 21, 2017 6:31 pm, edited 3 times in total.

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ruralavalon
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Re: Help in understanding my performance.

Post by ruralavalon » Sat Oct 21, 2017 6:21 pm

persona4826 wrote:
Sat Oct 21, 2017 5:47 pm
I will consider your advice, ruralavalon. Thank you.

One more (multi-part) question today, if I may.

So far, all I have done, in terms of action on my part, was buy shares of VSS and VBR. I "set-and-forget" my TSP, but I had my paycheck auto-fund the Roth and HSA. Every two weeks or so, I would log in to TDA, buy as many shares as I could, and log out. I had DRIP on both of the latter funds too.

When I move my Roth from TDA to Vanguard; what should I be aware of, and what should I notify each party about?
Set up automatic payroll deduction to your TSP.

Call Vanguard they will help you with the transfer of your Roth IRA. Ask for a rollover with a "trustee to trustee" transfer so the money goes directly and automatically from TDAmeritrade to Vanguard.

You can set up periodic contributions to your Roth IRA and your taxable account automatically from a checking or savings account. If using mutual funds rather than ETFs you can buy fractional shares, so don't have to log in and calculate exactly how many shares to buy. That's one of the ways in which mutual funds have more convenient trading mechanics than ETFs.


persona 4826 wrote:What exactly am I doing when I change my HSA from VBR to either the SCHE or SCHH funds? Selling, convert, trading?
I have never had an account at TDAmeritrade so I don't know what terminology they use.

At Vanguard using mutual funds it's called an "exchange" between funds.

In the case of ETFs I think they probably require a sale of one ETF and purchase of the other ETF.


persona 4826" wrote:I last bought several shares on Oct. 16, and was told by a TDA rep that they will be free from charges if I wait to sell them starting Nov. 17. Does that mean all of my shares, or is there a system in place that sells my oldest purchases (and thus, no short-term holding fee) first, and I can sell/convert/trade the majority prior to the 17th? I will be calling TDA in the meantime.
I have never had an account at TDAmeritrade, so I don't know the details of exactly how their system works. You will need to call them.

I see no great harm if you have to wait a month to make the change in the HSA.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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ruralavalon
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Re: Help in understanding my performance.

Post by ruralavalon » Sat Oct 21, 2017 6:36 pm

persona4826 wrote:
Sat Oct 21, 2017 5:47 pm
When I move my Roth from TDA to Vanguard; what should I be aware of, and what should I notify each party about? Can my VSS shares be converted to VTI or VTSAX while transitioning to Vanguard, or do I do the buying/selling at TDA or Vanguard?
I think you wind up selling one ETF and buying the other ETF or mutual fund.

I think you do that at Vanguard commission free, and it's easier. At Vanguard it's commission free even if the switch is from an ETF to a mutual fund. I don't have any TDAmeritrade accounts. I don't know if you can still switch ETFs commission free at TDAmeritrade. I don't think that you can buy a Vanguard mutual fund commission free at TDAmeritrade.

persona 4826 wrote:What exactly am I doing when I change my HSA from VBR to either the SCHE or SCHH funds? Selling, convert, trading? I last bought several shares on Oct. 16, and was told by a TDA rep that they will be free from charges if I wait to sell them starting Nov. 17. [Update: Just spoke with a TDA rep, and they will waive the short-term trading fee for me as I expressed my concerns over the changes to to ETFs. It looks I'll have to wait for a day when VBR is high, and sell off all of my shares then. I know the mantra, "buy low, sell high", but what are indicators of this?]
That's good news about waiving the short-term trading fee.

I wouldn't bother trying to wait for a good day to sell or buy. There is no predicting that, when a good day finally comes there is no telling if the next day or next week or next month might be better. The HSA is only 05% of your total portfolio, so the overall impact relatively slight anyway.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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Re: Help in understanding my performance.

Post by persona4826 » Mon Oct 23, 2017 7:14 am

My mind was abuzz with several things over the weekend, and only this morning did I realize that I wasn't reading deep enough.

Both SCHE and SCHH will not be commission-free come the November switch.

If I want to stay commission-free, it appears my best alternatives for VBR (ER 0.07%) are either

SPSM (SPDR Portfolio Small Cap ETF) ER 0.05%
SLYV (SPDR S&P 600 Small Cap Value ETF) ER 0.15%

1) What criteria do I look at when comparing the two to best replace VBR? (Yes, this is pretty much keeping me on the path that I am currently on.)
2) Is there a real estate option in TDA's new ETF line-up that I can use instead of SCHH?
3) If I do go with SCHH, what do I "gain" now that I am paying commission? (I.e. How do I justify the cost?)

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ruralavalon
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Re: Help in understanding my performance.

Post by ruralavalon » Mon Oct 23, 2017 7:46 am

persona4826 wrote:
Mon Oct 23, 2017 7:14 am
My mind was abuzz with several things over the weekend, and only this morning did I realize that I wasn't reading deep enough.

Both SCHE and SCHH will not be commission-free come the November switch.

If I want to stay commission-free, it appears my best alternatives for VBR (ER 0.07%) are either

SPSM (SPDR Portfolio Small Cap ETF) ER 0.05%
SLYV (SPDR S&P 600 Small Cap Value ETF) ER 0.15%

1) What criteria do I look at when comparing the two to best replace VBR? (Yes, this is pretty much keeping me on the path that I am currently on.)
2) Is there a real estate option in TDA's new ETF line-up that I can use instead of SCHH?
3) If I do go with SCHH, what do I "gain" now that I am paying commission? (I.e. How do I justify the cost?)
That your time, there is no rush. Plan first, before starting to execute a plan.

Don't strive for the perfect plan, you will never find it. Settle for "good enough".

1) Focus on expense ratio. Don't use or even consider a small-cap value ETF, since you have said that you are not sure you want to try for a small-cap value tilt with that extra risk.

2) I don't know what real estate options are available in TDAmeritrade's new commission free ETF lineup.

3) I had just assumed that TDAmeritrade's new ETF lineup still had Schwab ETFs commission free.

If TDAmeritrade's new commission free ETF lineup has no real estate ETF, then the better solution might be to use the Vanguard REIT Index Fund or ETF as part of the Roth IRA after moving the Roth IRA to Vanguard. Just use a commission free total stock market index ETF in the HSA which has to stay at TDAmeritrade. It is very important long-term to avoid any unnecessary investing expenses.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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Re: Help in understanding my performance.

Post by persona4826 » Thu Oct 26, 2017 3:45 pm

1) Focus on expense ratio. Don't use or even consider a small-cap value ETF, since you have said that you are not sure you want to try for a small-cap value tilt with that extra risk.

2) I don't know what real estate options are available in TDAmeritrade's new commission free ETF lineup.

3) I had just assumed that TDAmeritrade's new ETF lineup still had Schwab ETFs commission free.

If TDAmeritrade's new commission free ETF lineup has no real estate ETF, then the better solution might be to use the Vanguard REIT Index Fund or ETF as part of the Roth IRA after moving the Roth IRA to Vanguard. Just use a commission free total stock market index ETF in the HSA which has to stay at TDAmeritrade. It is very important long-term to avoid any unnecessary investing expenses.
1) I am comfortable with extra risk, as I feel that I am young enough to downplay it and I wish to be aggressive. (Having not really had the opportunity to invest on my 20's, I feel that I must have my investments in the fast lane to make up for lost time.) I am still reading up and trying to understand what "tilting" is, why "value" is a potential negative, and what that 0.1% difference in ER will do.

1.1) Since I wish the be aggressive, the 20% in my TSP's G Fund seems too conservative.

3) The only REIT ETFs on TDA's new list (with sub-0.4% ER) are

USRT (iShares Core U.S. REIT ETF) ER 0.08%
REET (iShares Global REIT ETF) ER 0.14%

Besides being "real estate", they seem like shadows of the SPDR options I listed. I plan to run an X-Ray on all four to see what the results are, and try to work backwards from that to try to determine what's going on.

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Re: Help in understanding my performance.

Post by ruralavalon » Thu Oct 26, 2017 4:27 pm

persona4826 wrote:
Thu Oct 26, 2017 3:45 pm
ruralavalon wrote:1) Focus on expense ratio. Don't use or even consider a small-cap value ETF, since you have said that you are not sure you want to try for a small-cap value tilt with that extra risk.

2) I don't know what real estate options are available in TDAmeritrade's new commission free ETF lineup.

3) I had just assumed that TDAmeritrade's new ETF lineup still had Schwab ETFs commission free.

If TDAmeritrade's new commission free ETF lineup has no real estate ETF, then the better solution might be to use the Vanguard REIT Index Fund or ETF as part of the Roth IRA after moving the Roth IRA to Vanguard. Just use a commission free total stock market index ETF in the HSA which has to stay at TDAmeritrade. It is very important long-term to avoid any unnecessary investing expenses.
1) I am comfortable with extra risk, as I feel that I am young enough to downplay it and I wish to be aggressive. (Having not really had the opportunity to invest on my 20's, I feel that I must have my investments in the fast lane to make up for lost time.) I am still reading up and trying to understand what "tilting" is, why "value" is a potential negative, and what that 0.1% difference in ER will do.
At age 33/34 you are not late starting, there is no need to think you are behind.

If you don't understand what it is, then don't do it. You can't be comfortable with the extra risk if you don't know what the risk is.

It's a very bad idea to try to play catch up by taking on unnecessary risk, that can easily backfire and leave you worse off.

persona4826 wrote:1.1) Since I wish the be aggressive, the 20% in my TSP's G Fund seems too conservative.
It's up to you of course, but at age 34/34 20% fixed income is not conservative in my opinion.

For fixed income in the TSP you can use the F Fund, the G Fund, or a combination. The Fund Fund offers the prospect of greater return, if you wish.

persona4826 wrote:3) The only REIT ETFs on TDA's new list (with sub-0.4% ER) are

USRT (iShares Core U.S. REIT ETF) ER 0.08%
REET (iShares Global REIT ETF) ER 0.14%

Besides being "real estate", they seem like shadows of the SPDR options I listed. I plan to run an X-Ray on all four to see what the results are, and try to work backwards from that to try to determine what's going on.
Of the two I suggest:
iShares Core U.S. REIT ETF (USRT) ER 0.08%.

According to the prospectus this ETF tracks the FTSE NAREIT Equity REITs Index.
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Re: Help in understanding my performance.

Post by inbox788 » Thu Oct 26, 2017 11:02 pm

dbr wrote:
Fri Oct 20, 2017 8:52 am
persona4826 wrote:
Fri Oct 20, 2017 8:16 am


A friend of mine thinks I am doing myself a disservice by not using a consultant (she uses Edward Jones and another); though I am trying to educate myself, and like the idea of index funds (and like the commission-free ETFs offered by TDAmeritrade; and yes, am aware of the upcoming changes).
That's funny. An EJ or other consultant is for the most part a salesman steadily extracting money from her assets through management fees and costs on the investments they recommend. That is one of the sure fire ways to reduce what investing success you would otherwise have had.

The advisor conundrum even when advice might be helpful to an investor is that investors cannot afford to pay what (with a few possible exceptions) advisors need to earn to stay in business. When I refer to a few possible exceptions that is not anyone I have ever met or could specifically recommend from my own knowledge.
LOL. Had exactly the same response when I read that. You'd have to muck things up quite a bit to do worse. Most of the funds look decent on first glance. VMMX is a money market fund, no? Having 5% there is high cash drag.
OP, do nothing until you've spent a few months here learning the ropes. There's a good chance you do more damage right now than doing nothing.

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Re: Help in understanding my performance.

Post by persona4826 » Sun Oct 29, 2017 11:00 pm

inbox788 wrote:
Thu Oct 26, 2017 11:02 pm
VMMX is a money market fund, no? Having 5% there is high cash drag.
It actually is VMMXX, Vanguard Prime Money Market Fund (typo, on my part). I do not have anything in VMMXX per se, but am using it as a proxy for my G Fund (as I have a TSP).

What do you mean by "high cash drag"? That I don't have enough of my portfolio in equity? Several people on and of the forum have suggested that I am taking too much risk, and recommending 10, or even 20%. Or perhaps to convert my G Fund to F, i.e. 5% VMMXX to 5% VBTIX (Barclays U.S. Aggregate Float Adjusted Index)?
inbox788 wrote:
Thu Oct 26, 2017 11:02 pm
OP, do nothing until you've spent a few months here learning the ropes. There's a good chance you do more damage right now than doing nothing.
I reckon this will be my plan for now. In light of the changes going on at TDA, I have to make some adjustments regardless. Until I know better, I have decided to replicate what I have as best I can.

My steps:

1) move my Roth to Vanguard to keep VSS (I believe I might have to pay a $75 exit fee for moving the entire account. Is there a way to avoid this, or reduce it?)
2) find a suitable replacement for VBR within my HSA
3) add a taxable with Vanguard in the new year; once I have better understanding of what I want in my portfolio, and have surer footing whether I will move to another city or not

Regarding Item 2: to keep my portfolio most like it is now, I would swap VBR (ER 0.07%) for SPSM (ER 0.05%). This would change my X-Ray from

18 19 21 to 18 19 21
09 10 08 -- 08 08 08
07 05 03 -- 06 06 06

Alternatively, I could add REITs to my portfolio just to get some real estate in to play.

I could stay "local" with USRT (iShares Core U.S. REIT ETF) ER 0.08%, as suggested by some:

19 20 21
09 11 09
04 04 03

OR, add more international exposure with REET (iShares Global REIT ETF) ER 0.14%, as suggested by others:

19 22 21
09 10 08
04 04 03

The idea of swapping for a REIT intrigues me, and adding more international further piques my interest; yet I do not fully understand the pros/cons of my three options.

Bonus: I have been in contact with TDA to voice my disappointment, and they have given me 1 free trade :? as a condolence. Somewhat laughable, as I intend to remain commission-free, but should I use it to get something I normally could not? As a novelty (a share of gold or commodity), perhaps?

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Re: Help in understanding my performance.

Post by ruralavalon » Mon Oct 30, 2017 7:40 am

In struggling with all these decisions at the same time, you seem to be getting disorganized and distracted.

I suggest that you do some reading while you make your planning decisions in order. Make your fixed income decisions first, put off other decisions until after you decide on fixed income.

The very first decision you need to make is an asset allocation decision, deciding what to do for a "fixed income" allocation. "Fixed income" includes cash plus everything that pays interest or a specific return such as money market funds, bond funds, CDs, annuities, and savings accounts if used for long-term investing. Very often people just say "bond" allocation for short.

Decide about fixed income first, then decide the rest.

persona4826 wrote:
Sun Oct 29, 2017 11:00 pm
inbox788 wrote:
Thu Oct 26, 2017 11:02 pm
VMMX is a money market fund, no? Having 5% there is high cash drag.
It actually is VMMXX, Vanguard Prime Money Market Fund (typo, on my part). I do not have anything in VMMXX per se, but am using it as a proxy for my G Fund (as I have a TSP).

What do you mean by "high cash drag"? That I don't have enough of my portfolio in equity? Several people on and of the forum have suggested that I am taking too much risk, and recommending 10, or even 20%. Or perhaps to convert my G Fund to F, i.e. 5% VMMXX to 5% VBTIX (Barclays U.S. Aggregate Float Adjusted Index)?
"Cash drag" refers to the fact that cash almost certainly will give a negative real return net of inflation, so holding any meaningful amount of cash adds no value to your investing portfolio and just pulls down your portfolio returns.

Vanguard Prime Money Market Fund (VMMXX) is similar to cash, falls short of keeping up with inflation, but now is getting close to matching inflation. The G Fund is unique, is much less like cash, will beat inflation, and is more like a very safe long-term Treasury bond fund. The F Fund is a very good intermediate-term bond fund. All are fixed income.

I suggest a fixed income allocation of about 20%.

To help you make your fixed income decisions, I suggest that you read these very short articles or parts of articles on the Bogleheads wiki:
a) "G Fund";
b) "F Fund";
c) "Asset allocation"; and
d) Bogleheads' Investment Philosophy, part 3 "Never bear too much or too little risk".

If you can't figure out what funds to use for fixed income, then just do 1/2 G Fund and 1/2 F Fund. Just decide and move on.

For what it's worth I use intermediate-term bond funds for our fixed income allocation. I am not eligible for a TSP account, so can't use the G Fund, but would use the G Fund for part of fixed income if I could.

Your first decisions to make are:
1) what percentage of the total portfolio to be in fixed income; and
2) whether to use the F Fund, G Fund, or both for the fixed income allocation.

persona4826 wrote:
inbox788 wrote:
Thu Oct 26, 2017 11:02 pm
OP, do nothing until you've spent a few months here learning the ropes. There's a good chance you do more damage right now than doing nothing.
I reckon this will be my plan for now. In light of the changes going on at TDA, I have to make some adjustments regardless. Until I know better, I have decided to replicate what I have as best I can.

My steps:

1) move my Roth to Vanguard to keep VSS Vanguard FTSE All-World Ex-U.S. Small-cap ETF
2) find a suitable replacement for Vanguard Small-cap Value ETF VBR within my HSA
3) add a taxable with Vanguard in the new year; once I have better understanding of what I want in my portfolio, and have surer footing whether I will move to another city or not

Regarding Item 2: to keep my portfolio most like it is now, I would swap Vanguard Small-cap Value ETF VBR (ER 0.07%) for SPDR Portfolio Small-cap ETF SPSM (ER 0.05%). This would change my X-Ray from

18 19 21 to 18 19 21
09 10 08 -- 08 08 08
07 05 03 -- 06 06 06

Alternatively, I could add REITs to my portfolio just to get some real estate in to play.

I could stay "local" with USRT (iShares Core U.S. REIT ETF) ER 0.08%:

19 20 21
09 11 09
04 04 03

OR, add more international exposure with REET (iShares Global REIT ETF) ER 0.14%:

19 22 21
09 10 08
04 04 03

The idea of swapping for a REIT intrigues me, and adding more international further piques my interest; yet I do not fully understand the pros/cons of my three options.

Bonus: I have been in contact with TDA to voice my disappointment, and they have given me 1 free trade :? as a condolence. Somewhat laughable, as I intend to remain commission-free, but should I use it to get something I normally could not? As a novelty (a share of gold or commodity), perhaps?
Please get out of the habit of using ticker symbols without the fund or ETF names. That makes it very difficult to follow what you are saying. I use funds not ETFs, don't know many ETF tickers, and so I always have to stop and look up what you are referring to.

I suggest that you now:
a) go ahead and rollover your Roth IRA to Vanguard, there is no reason to delay that, you don't need to immediately decide what funds or ETFs to use in it; and
b) buy or borrow from the library and start reading a good book on general investing. I suggest either The Four Pillars of Investing or The Bogleheads' Guide to Investing to help you with the next decisions.

After the two fixed income allocation decisions, I think that the next decisions should be these pretty much in this order:
3) how much of the stock allocation is to be allocated to domestic stocks and how much to international stocks;
4) whether to have a real estate allocation as part of the stock allocation;
5) which funds or ETFs in which accounts to use for domestic stocks; and
6) which funds or ETFs in which accounts to use for international stocks.

I suggest you not even have "novelty" on your radar. Get the basics covered before you even think about precious metals or commodities.
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Re: Help in understanding my performance.

Post by persona4826 » Wed Nov 01, 2017 9:00 am

I very well might be distracted and disorganized. Some of my concerns had been assuaged over the past few days, having had a fiduciary advisor look at my data as well and find my current set-up pretty good. (He is a fee-only advisor who I am considering services with, yet he is willing to have me bounce ideas off of him in the meanwhile).

Still, I was told that I there could be some improvement - such as getting into more emerging markets (I personally am keen on SE Asia and Eastern Europe, and Africa and Latin America of course) and adding real estate. Also, the possible increasing of my fixed income.

Thus, I will recreate what I currently have by moving my Roth to Vanguard with the same EFTs (VSS, Vanguard FTSE All-World ex-U.S. Small Cap ETF) and continue to buy shares as normal, and sell off all my VBR (Vanguard Small-cap Value ETF) shares for SPSM (SPDR Portfolio Small Cap ETF) at Ameritrade.

Next, will be to read up on some of the literature you (ruralavalon) had suggested. Once I better understand that, I should be able to return to the forums with a better goal in mind and possible allocations to consider.

In addition to asset allocation, and I reckon this a philosophical question, should I have an investing goal other than "make money now to not be poor later"? I probably do - which only throws a wrench into the first question of allocation. :oops:

Finally, when I contact Vanguard to do the in-kind transfer, it seems that I will incur a $75 fee from Ameritrade. Is there some way to reduce or eliminate it? Are there other fees I should be explicit about inquiring on?

Should fees be involved, I read about the idea of paying them with money outside of the IRA to "remove the loss of a tax-protection hit". I am not certain what it means - it was in a forum post from several years ago, and did not explain. Any thoughts?

P.S. ruralavalon: Pardon my brevity with the ticker symbols.

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Re: Help in understanding my performance.

Post by ruralavalon » Wed Nov 01, 2017 9:29 am

It's great that you can have a fee only advisor help. We hired a fee only advisor to start our planning, and found her very reassuring and helpful.

I don't think you can avoid that $75 account closing fee at TDAmeritrade, so don't spend a lot of time on that.
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Re: Help in understanding my performance.

Post by persona4826 » Wed Nov 01, 2017 9:53 am

Thanks again, ruralavalon.

As I likely cannot avoid that fee, did you have any recommendation on how to pay it? Using IRA money or not?

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Re: Help in understanding my performance.

Post by ruralavalon » Wed Nov 01, 2017 10:13 am

persona4826 wrote:
Wed Nov 01, 2017 9:53 am
Thanks again, ruralavalon.

As I likely cannot avoid that fee, did you have any recommendation on how to pay it? Using IRA money or not?
I have no idea what's better, and wouldn't spend much time worrying about but.
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Earl Lemongrab
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Re: Help in understanding my performance.

Post by Earl Lemongrab » Wed Nov 01, 2017 12:12 pm

persona4826 wrote:
Wed Nov 01, 2017 9:53 am
Thanks again, ruralavalon.

As I likely cannot avoid that fee, did you have any recommendation on how to pay it? Using IRA money or not?
TD Ameritrade does not have a closing fee, but they do have a full transfer fee. How much is in the account? If 100k, then you should qualify for Apex status and there would be no transfer fee. Otherwise, you can leave a small amount in it. Depending on where you transfer, the receiver might cover the fee. I would also look to get a bonus for transferring.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

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Re: Help in understanding my performance.

Post by persona4826 » Wed Nov 01, 2017 5:41 pm

Earl Lemongrab wrote:
Wed Nov 01, 2017 12:12 pm
TD Ameritrade does not have a closing fee, but they do have a full transfer fee. How much is in the account? If 100k, then you should qualify for Apex status and there would be no transfer fee. Otherwise, you can leave a small amount in it. Depending on where you transfer, the receiver might cover the fee. I would also look to get a bonus for transferring.
There is $50+K in the account.

If I don't do a full transfer, how much would I leave behind? One dollar? Ten? One Hundred? It'd be a little annoying to leave something in there - especially if I knew it wasn't doing much more than saving me $75 today when it could be part of compounding over the next few years.

I am quite certain I will be moving my Roth to Vanguard, and when I asked about any bonus during a brief conversation last week, the representative said they would not offer me anything. (He sounded young, and seemed to be answering me without any enthusiasm.) Perhaps I should court Vanguard again and hope for a more-seasoned rep? Plus, I have read on the forum that Vanguard never covers the closing fees.

Other posters have mentioned Fidelity, Betterment, Schwab, etc.; but if Vanguard is all I know, perhaps I best stick with them? I am irked that they will charge me that $20 annual fee, though... :annoyed Or, I could stay at TDA, but am uncertain of what fees I'll rack-up with them as I continue to purchase and hold shares, and what will happen when I do sell after a few years.

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Re: Help in understanding my performance.

Post by ruralavalon » Wed Nov 01, 2017 7:42 pm

persona4826 wrote:
Wed Nov 01, 2017 5:41 pm
There is $50+K in the account.
. . . . .
Other posters have mentioned Fidelity, Betterment, Schwab, etc.; but if Vanguard is all I know, perhaps I best stick with them? I am irked that they will charge me that $20 annual fee, though... :annoyed Or, I could stay at TDA, but am uncertain of what fees I'll rack-up with them as I continue to purchase and hold shares, and what will happen when I do sell after a few years.
I suggest you stick with Vanguard.

I don't believe that there will be a $20 annual fee at Vanguard. A $20 fee is charged for accounts of less than $10k, you are investing $50k. And even for accounts less than $10k the fee is avoided you sign up sign up for e-delivery.

You need to get away from TDAmeritrade because of the newly limited ETF lineup and the fees there.You will be much better off at Vanguard in my opinion.
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Earl Lemongrab
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Re: Help in understanding my performance.

Post by Earl Lemongrab » Wed Nov 01, 2017 8:00 pm

persona4826 wrote:
Wed Nov 01, 2017 5:41 pm
Earl Lemongrab wrote:
Wed Nov 01, 2017 12:12 pm
TD Ameritrade does not have a closing fee, but they do have a full transfer fee. How much is in the account? If 100k, then you should qualify for Apex status and there would be no transfer fee. Otherwise, you can leave a small amount in it. Depending on where you transfer, the receiver might cover the fee. I would also look to get a bonus for transferring.
There is $50+K in the account.
So no Apex.

If I don't do a full transfer, how much would I leave behind? One dollar? Ten? One Hundred? It'd be a little annoying to leave something in there - especially if I knew it wasn't doing much more than saving me $75 today when it could be part of compounding over the next few years.
I would think you could leave a dollar. With a regular brokerage account you could just transfer the cash out to a linked bank account later. That's no charge. With an IRA it's trickier. You could do an indirect rollover with the cash, but you only get one per year.

I always leave something anyway because otherwise the account isn't accessible, so if you wanted to check history it's a pain.


I am quite certain I will be moving my Roth to Vanguard, and when I asked about any bonus during a brief conversation last week, the representative said they would not offer me anything. (He sounded young, and seemed to be answering me without any enthusiasm.) Perhaps I should court Vanguard again and hope for a more-seasoned rep? Plus, I have read on the forum that Vanguard never covers the closing fees.
Don't waste time. Vanguard doesn't do bonuses or reimbursements.

Other posters have mentioned Fidelity, Betterment, Schwab, etc.; but if Vanguard is all I know, perhaps I best stick with them? I am irked that they will charge me that $20 annual fee, though... :annoyed Or, I could stay at TDA, but am uncertain of what fees I'll rack-up with them as I continue to purchase and hold shares, and what will happen when I do sell after a few years.
Merrill Edge would be a good choice if you're using ETFs. With 50k you would get 30 trades/month, a bonus, and they'd probably cover the transfer fee. If I had to choose one custodian, that would be the one right now. And it's unlikely you'd be paying a fee at Vanguard. That's only for paper statements with low balances, although I don't recall the details. Haven't used them in decades, as there are better custodians.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

persona4826
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Re: Help in understanding my performance.

Post by persona4826 » Fri Nov 03, 2017 7:33 am

Earl Lemongrab wrote:
Wed Nov 01, 2017 8:00 pm
persona4826 wrote:
Wed Nov 01, 2017 5:41 pm
Earl Lemongrab wrote:
Wed Nov 01, 2017 12:12 pm
TD Ameritrade does not have a closing fee, but they do have a full transfer fee. How much is in the account? If 100k, then you should qualify for Apex status and there would be no transfer fee. Otherwise, you can leave a small amount in it. Depending on where you transfer, the receiver might cover the fee. I would also look to get a bonus for transferring.
There is $50+K in the account.
So no Apex.
Oh, gosh; do I feel sheepish. My Roth IRA is approximately $12k. (I recall being hurried on my way out of the office, and apparently mistyped the "1" for a "5".) Definitely no Apex.
If I don't do a full transfer, how much would I leave behind? One dollar? Ten? One Hundred? It'd be a little annoying to leave something in there - especially if I knew it wasn't doing much more than saving me $75 today when it could be part of compounding over the next few years.
I would think you could leave a dollar. With a regular brokerage account you could just transfer the cash out to a linked bank account later. That's no charge. With an IRA it's trickier. You could do an indirect rollover with the cash, but you only get one per year.

I always leave something anyway because otherwise the account isn't accessible, so if you wanted to check history it's a pain.

It's only two years of history. I reckon I could save virtual copies of my statements, and print them as well.
I am quite certain I will be moving my Roth to Vanguard, and when I asked about any bonus during a brief conversation last week, the representative said they would not offer me anything. (He sounded young, and seemed to be answering me without any enthusiasm.) Perhaps I should court Vanguard again and hope for a more-seasoned rep? Plus, I have read on the forum that Vanguard never covers the closing fees.
Don't waste time. Vanguard doesn't do bonuses or reimbursements.
Noted.
Other posters have mentioned Fidelity, Betterment, Schwab, etc.; but if Vanguard is all I know, perhaps I best stick with them? I am irked that they will charge me that $20 annual fee, though... :annoyed Or, I could stay at TDA, but am uncertain of what fees I'll rack-up with them as I continue to purchase and hold shares, and what will happen when I do sell after a few years.
Merrill Edge would be a good choice if you're using ETFs. With 50k you would get 30 trades/month, a bonus, and they'd probably cover the transfer fee. If I had to choose one custodian, that would be the one right now. And it's unlikely you'd be paying a fee at Vanguard. That's only for paper statements with low balances, although I don't recall the details. Haven't used them in decades, as there are better custodians.
It seems that you and ruralavalon are correct about the Vanguard fee.

Regardless, since I provided the wrong amount, I would not be getting the free trades or bonuses with Merrill Edge. Are there any brokerages that cater to beginning-investors, and offer trades or bonuses? (With me maxing out my Roth, that gives about $460/mo to buy shares with; and sticking with my current ETF means I currently execute five or six trades a month.) It would also behoove me to consider how the brokerage would grow with me when I, potentially, add a taxable account of $35-40k (yes, this amount is not a typo) some time next year and could benefit from more free trades.

I'll do some research on the offers put out by Fidelity and the others throughout the day, and review the forum. Curious about Robinhood too, as it seems to be "new and for everyone".

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ruralavalon
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Re: Help in understanding my performance.

Post by ruralavalon » Fri Nov 03, 2017 10:09 am

persona4826 wrote:
Wed Nov 01, 2017 5:41 pm
I am quite certain I will be moving my Roth to Vanguard, and when I asked about any bonus during a brief conversation last week, the representative said they would not offer me anything. (He sounded young, and seemed to be answering me without any enthusiasm.) Perhaps I should court Vanguard again and hope for a more-seasoned rep? Plus, I have read on the forum that Vanguard never covers the closing fees.
I think you are quite right to move your Roth IRA to Vanguard. For what it's worth, all of our accounts are at Vanguard, and all of our funds are Vanguard mutual funds not ETFs.

I have always found customer service at Vanguard to be fine for me. We have been with Vanguard since 2005.

persona4826 wrote:I'll do some research on the offers put out by Fidelity and the others throughout the day, and review the forum.
As mentioned last Monday in struggling with all these decisions at the same time, you seem to be getting disorganized and distracted. Please don't let yourself become distracted by issues like -- the $75 transfer fee, bonuses, free trades on ETFs, credit card offers, etc.

It's important get away from TDAmeritrade. In the long-run the $75 fee is not significant on a $50,000+ account, if you can leave $1 behind and avoid it if that's good. If you buy and hold, which is what I suggest, then free trades on ETFs don't matter.

The fund firms offering bonuses have carefully calculated that they will likely be able to charge you for enough on something else to more than recoup the bonus they offer. The bonus will likely not come free.

In my opinion the $75 transfer fee, bonuses, free trades on ETFs, credit card offers, etc. are less important issues for your attention.

Other issues you to need resolve are much more important in my opinion.

As mentioned last Monday, I suggest that you read about the planning decisions you need to make, in my opinion this is more important than looking into bonuses etc.
I suggest that you read these very short articles or parts of articles on the Bogleheads wiki:
a) "G Fund";
b) "F Fund";
c) "Asset allocation";
d) Bogleheads' Investment Philosophy, part 3 "Never bear too much or too little risk"; and
e) buy or borrow from the library and start reading a good book on general investing. I suggest either he Four Pillars of Investing or The Bogleheads' Guide to Investing to help you with the next decisions.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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Earl Lemongrab
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Re: Help in understanding my performance.

Post by Earl Lemongrab » Fri Nov 03, 2017 11:33 am

ruralavalon wrote:
Fri Nov 03, 2017 10:09 am
It's important get away from TDAmeritrade. In the long-run the $75 fee is not significant on a $50,000+ account, if you can leave $1 behind and avoid it if that's good. If you buy and hold, which is what I suggest, then free trades on ETFs don't matter.
Then why is it important to get away from TD Ameritrade? They only thing they've done is remove some free ETF choices. If that doesn't matter, then the OP could do the simplest thing and stay. Keep buying the ETFs with the commission.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

persona4826
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Re: Help in understanding my performance.

Post by persona4826 » Fri Nov 03, 2017 1:23 pm

I'm not looking to start any argument.

My motivator for moving away from TDA at this time is the loss of the Vanguard ETFs.

As ruralavalon suggests, I may want to re-allocate and add a taxable account.

Before I re-allocate, I should make efforts to secure what I currently have before the TDA commission-free deadline later this month (I believe the January extension is only for self-directed and organization-level accounts, correct?) As TDA's new list has no suitable equivalent for VSS (Vanguard FTSE All-World ex-U.S. Small Cap ETF), I wish to find a broker that can either give it to me commission-free or through free trades. This way, I continue to go-with-what-I-know until I take those two steps.

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Earl Lemongrab
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Re: Help in understanding my performance.

Post by Earl Lemongrab » Fri Nov 03, 2017 5:20 pm

My understanding is that the extension is for everyone now. Really if you can get to 50k total, then Merrill Edge is the best option. That's going to fit your needs best. I realize that IRA you mention doesn't have that much, but is it all you have available?

Vanguard has free trades on their ETFs, but no others. How often do you buy or sell?
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

persona4826
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Re: Help in understanding my performance.

Post by persona4826 » Fri Nov 03, 2017 9:36 pm

Earl Lemongrab wrote:
Fri Nov 03, 2017 5:20 pm
My understanding is that the extension is for everyone now. Really if you can get to 50k total, then Merrill Edge is the best option. That's going to fit your needs best. I realize that IRA you mention doesn't have that much, but is it all you have available?
Without opening a taxable or other account, then the $12k Roth is all I got. My HSA has to stay with Ameritrade, and the TSP is its own thing. I fully funded the Roth last year, and am on track to do the same this year. I can't add more to it this year, l and even if I fully-fund it at the beginning of 2018 prior to the deadline, it would only be in the $17k range.

I am hesitant to throw in $40k just to get a taxable in place (though I could without harming my emergency cushion), as I have no idea what to once ME or Vanguard have their hands on it. Plus, I have a possible move in the next few months where having liquid assets would be very convenient.
Earl Lemongrab wrote:
Fri Nov 03, 2017 5:20 pm
Vanguard has free trades on their ETFs, but no others. How often do you buy or sell?
I don't sell at all, just buy and hold. With the Roth contribution limits spread over 26 pay periods, I estimate that 6 trades is the most I can do within a month.

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Earl Lemongrab
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Re: Help in understanding my performance.

Post by Earl Lemongrab » Sat Nov 04, 2017 10:24 am

I don't see much reason to spread out the Roth contributions like that. I'd put it all in immediately.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

persona4826
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Re: Help in understanding my performance.

Post by persona4826 » Sat Nov 04, 2017 10:37 am

Am I not taking advantage of dollar-cost averaging by spreading it out?

It also helps me keep my taxes low, since I take a smaller paycheck, does it not? :confused

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Earl Lemongrab
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Re: Help in understanding my performance.

Post by Earl Lemongrab » Sat Nov 04, 2017 10:42 am

persona4826 wrote:
Sat Nov 04, 2017 10:37 am
Am I not taking advantage of dollar-cost averaging by spreading it out?
What advantage? DCA is a crutch for those not confident in their asset allocation.
persona4826 wrote:
Sat Nov 04, 2017 10:37 am
It also helps me keep my taxes low, since I take a smaller paycheck, does it not? :confused
It's Roth, so there's no deduction. No effect on your current taxes.

To get back to the custodian selection, if you can't qualify for the free trades at Merrill, there's not a lot of reason to switch from TDA to there on cost. You'll pay the same commission ($6.95) on ETF purchases for Vanguard products. So I'd recommend either staying where you are (and look at the free choices) or go with Vanguard.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

persona4826
Posts: 48
Joined: Sun Dec 18, 2016 11:53 pm

Re: Help in understanding my performance.

Post by persona4826 » Sat Nov 04, 2017 11:24 am

If I move my Roth to Vanguard, I will be able to retain VSS (Vanguard FTSE All-World Ex-U.S. Small-cap ETF, ER 0.13%) and be confident in my asset allocation. I reckon I'd also be more confident with Vanguard's commission-free options than TDA's once I add my taxable, and for when I need to re-allocate.

If it stays at TDA, I'd need to replace it with "somewhat" similar ETFs like

DLS (WisdomTree International SmallCp Div ETF) ER 0.58%
GWX (SPDR S&P International Small Cap ETF) ER 0.4%

and I would be less confident in my asset allocation.

Wow. Writing that out seems to have finally wrapped up the loose ends I had been pursuing. Looks like I'll be (at last! *sigh of relief) making the move to Vanguard.

Thanks for the epiphany. :beer

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ruralavalon
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Re: Help in understanding my performance.

Post by ruralavalon » Sat Nov 04, 2017 12:08 pm

persona4826 wrote:
Sat Nov 04, 2017 11:24 am
If I move my Roth to Vanguard, I will be able to retain VSS (Vanguard FTSE All-World Ex-U.S. Small-cap ETF, ER 0.13%) and be confident in my asset allocation. I reckon I'd also be more confident with Vanguard's commission-free options than TDA's once I add my taxable, and for when I need to re-allocate.

If it stays at TDA, I'd need to replace it with "somewhat" similar ETFs like

DLS (WisdomTree International SmallCp Div ETF) ER 0.58%
GWX (SPDR S&P International Small Cap ETF) ER 0.4%

and I would be less confident in my asset allocation.

Wow. Writing that out seems to have finally wrapped up the loose ends I had been pursuing. Looks like I'll be making the move to Vanguard.

Thanks for the epiphany. :beer
Good decision in my opinion :) , and it's certainly nice to get one decision out of the way :D and be able move on to something else.


persona4826 wrote: I fully funded the Roth last year, and am on track to do the same this year. I can't add more to it this year, l and even if I fully-fund it at the beginning of 2018 prior to the deadline, it would only be in the $17k range.
Earl Lemongrab wrote:I don't see much reason to spread out the Roth contributions like that. I'd put it all in immediately.
persona4826 wrote:Am I not taking advantage of dollar-cost averaging by spreading it out?
If you have the cash available to fully fund the Roth IRA for any given year, just go right ahead. It was always my practice to contribute whenever I had more money available to contribute. I could never see sense in keeping money UNinvested. Among other reasons cash in a savings vehicle is almost guaranteed to give you a negative real return, net of inflation.

There is much discussion here about the two approaches. I am in the invest it "all at once" camp. When investing a large chunk of new money, "all at once" works out better about 2/3 of the time. Please see the Vanguard paper, "Dollar-cost averaging just means taking risk later".

Here is another interesting article to read -- "What if you only invested at market peaks?"
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

dbr
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Re: Help in understanding my performance.

Post by dbr » Mon Nov 06, 2017 9:32 am

persona4826 wrote:
Sat Nov 04, 2017 10:37 am
Am I not taking advantage of dollar-cost averaging by spreading it out?

It also helps me keep my taxes low, since I take a smaller paycheck, does it not? :confused
No. This whole discussion is not dollar cost averaging. DCA means investing the same number of new dollars at regular intervals rather than buying the same number of new shares (at variable price) at regular intervals. Arithmetic will show that the average cost of a share will be less the former way than the latter. Saving money one already has and dribbling it into the market is a misunderstanding of the term that for some reason has gained traction on this forum. DCA was once a recommended investment practice when one could only buy stocks preferably in round lots. It does not apply in the mutual fund world. On average keeping money out of the market will reduce return. On frequency it seems that return is reduced about 2/3 of the time doing this.

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