What ETF to keep in a Merrill Edge account for Platinum Honors

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AHumanInterest
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What ETF to keep in a Merrill Edge account for Platinum Honors

Post by AHumanInterest » Thu Oct 11, 2018 12:38 am

I'd like to keep a fixed amount of cash in my Merrill Edge account in order to qualify to Platinum honors rewards. To do this I was thinking of investing in a tax-free muni bond fund and disabling DRIP and capital gains reinvestment. Note that I live in california

Is this a reasonable plan? If so, which ETF would be a good fit?

AHumanInterest
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Re: What ETF to keep in a Merrill Edge account for Platinum Honors

Post by AHumanInterest » Thu Oct 11, 2018 11:51 am

After some research I found CMF (iShares California Muni Bond ETF) with a 0.25% expense ratio. This could be traded commission free in a merrill edge account.

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bligh
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Re: What ETF to keep in a Merrill Edge account for Platinum Honors

Post by bligh » Thu Oct 11, 2018 11:55 am

If you want something that is more "cash like" in its NAV fluctuation and has a much lower ER look at "SUB" . You wont get the CA tax exemption but the shorter duration, increased diversification across states and lower ER might be worth it to you.

As a Platinum Honors rewards member any ETF can be traded commission free up to 100 trades a month I believe.

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triceratop
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Re: What ETF to keep in a Merrill Edge account for Platinum Honors

Post by triceratop » Thu Oct 11, 2018 11:55 am

I might have missed this but, why must you handicap yourself by forcing yourself to own a completely tax-free bond fund in ETF form? What about equities, treasuries, or national munis? How does this fit into your overall asset allocation?
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

AHumanInterest
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Re: What ETF to keep in a Merrill Edge account for Platinum Honors

Post by AHumanInterest » Thu Oct 11, 2018 11:58 am

triceratop wrote:
Thu Oct 11, 2018 11:55 am
I might have missed this but, why must you handicap yourself by forcing yourself to own a completely tax-free bond fund in ETF form?
Do tax-free ETFs not provide the tax advantages I'm expecting? My reason not to use something like VCAIX (the vanguard mutual fund) is that Merrill Edge charges a $20 commission on each trade. Since I'm aiming for a fixed allocation of funds I guess this isn't too bad, but wanted to make use of the free ETF commissions I had.
What about equities, treasuries, or national munis? How does this fit into your overall asset allocation?
My mostly current IPS is here: viewtopic.php?f=1&t=259709. I'm in the middle of de-complexifying my other holdings which were a mess.

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bligh
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Re: What ETF to keep in a Merrill Edge account for Platinum Honors

Post by bligh » Thu Oct 11, 2018 12:16 pm

I think what triceratop was getting at is, you may be putting the tax cart before the asset allocation horse. What is your marginal Fed/State tax bracket?

AHumanInterest
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Re: What ETF to keep in a Merrill Edge account for Platinum Honors

Post by AHumanInterest » Thu Oct 11, 2018 12:22 pm

bligh wrote:
Thu Oct 11, 2018 12:16 pm
I think what triceratop was getting at is, you may be putting the tax cart before the asset allocation horse. What is your marginal Fed/State tax bracket?
Federal Marginal Tax Bracket: 35%
CA Marginal Tax Bracket: 10.3%

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