Help Pick Funds for 401K

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BajaMig
Posts: 21
Joined: Sat Jul 28, 2018 1:01 pm

Help Pick Funds for 401K

Post by BajaMig » Thu Nov 08, 2018 11:54 am

All, what are your opinions between these funds?

Total International Stock Market
Vanguard total international stock index fund admiral shares Expense Ratio = 0.11%
OR
Vanguard total international stock index fund Expense Ratio = 0.17%

Total US Bond market
Vanguard total bond market index fund admiral shares Expense Ratio = 0.05%
OR
IShares national muni bond ETF Expense Ratio = 0.07%
OR
Schwab US aggregate bond index fund Expense Ratio = 0.04%

10% TIPS
Vanguard inflation protected securities fund admiral shares Expense Ratio = 0.10%
OR
Schwab Treasure he inflation protected securities index fund Expense Ratio = 0.05%

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ruralavalon
Posts: 14079
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Help Pick Funds for 401K

Post by ruralavalon » Thu Nov 08, 2018 12:56 pm

BajaMig wrote:
Thu Nov 08, 2018 11:54 am
All, what are your opinions between these funds?

Total International Stock Market
Vanguard total international stock index fund admiral shares Expense Ratio = 0.11%
OR
Vanguard total international stock index fund Expense Ratio = 0.17%
They seem to be two different share classes of the same fund. It's odd to have multiple share classes of a fund offered in a 401k.


BajaMig wrote:Total US Bond market
Vanguard total bond market index fund admiral shares Expense Ratio = 0.05%
OR
IShares national muni bond ETF Expense Ratio = 0.07%
OR
Schwab US aggregate bond index fund Expense Ratio = 0.04%
It's odd to have a tax-exempt bond fund offered in a 401k. There is no purpose for that, it's like wearing a raincoat and using an umbrella indoors. I would not use the muni bond fund in a 401k.

The other two are virtually duplicates, both use a version of the Bloomberg Barclays U.S. Aggregate Bond Index.


BajaMig wrote:10% TIPS
Vanguard inflation protected securities fund admiral shares Expense Ratio = 0.10%
OR
Schwab Treasure he inflation protected securities index fund Expense Ratio = 0.05%
I have no opinion on comparing the TIPS funds, I don't use a TIPS fund at all.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

BajaMig
Posts: 21
Joined: Sat Jul 28, 2018 1:01 pm

Re: Help Pick Funds for 401K

Post by BajaMig » Thu Nov 08, 2018 2:22 pm

Can you tell me why you don’t use TIPS? I’m still learning all of this stuff.

I appreciate your tips on the other funds.

BajaMig
Posts: 21
Joined: Sat Jul 28, 2018 1:01 pm

Re: Help Pick Funds for 401K

Post by BajaMig » Thu Nov 08, 2018 2:45 pm

ruralavalon wrote:
Thu Nov 08, 2018 12:56 pm
BajaMig wrote:
Thu Nov 08, 2018 11:54 am
All, what are your opinions between these funds?

Total International Stock Market
Vanguard total international stock index fund admiral shares Expense Ratio = 0.11%
OR
Vanguard total international stock index fund Expense Ratio = 0.17%
They seem to be two different share classes of the same fund. It's odd to have multiple share classes of a fund offered in a 401k.


BajaMig wrote:Total US Bond market
Vanguard total bond market index fund admiral shares Expense Ratio = 0.05%
OR
IShares national muni bond ETF Expense Ratio = 0.07%
OR
Schwab US aggregate bond index fund Expense Ratio = 0.04%
It's odd to have a tax-exempt bond fund offered in a 401k. There is no purpose for that, it's like wearing a raincoat and using an umbrella indoors. I would not use the muni bond fund in a 401k.

The other two are virtually duplicates, both use a version of the Bloomberg Barclays U.S. Aggregate Bond Index.


BajaMig wrote:10% TIPS
Vanguard inflation protected securities fund admiral shares Expense Ratio = 0.10%
OR
Schwab Treasure he inflation protected securities index fund Expense Ratio = 0.05%
I have no opinion on comparing the TIPS funds, I don't use a TIPS fund at all.
Can you tell me why you don’t use TIPS?
Appreciate the help on the other funds

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vineviz
Posts: 2047
Joined: Tue May 15, 2018 1:55 pm

Re: Help Pick Funds for 401K

Post by vineviz » Thu Nov 08, 2018 2:50 pm

BajaMig wrote:
Thu Nov 08, 2018 2:22 pm
Can you tell me why you don’t use TIPS? I’m still learning all of this stuff.

I appreciate your tips on the other funds.
The only advantage of TIPS over nominal Treasuries is that TIPS provide a explicit hedge against unexpected inflation.

For an investor who is relatively young (under age 50, say) and fully employed , both equities and human capital (in the form of future wages) provide sufficient inflation protection.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

sawhorse
Posts: 3108
Joined: Sun Mar 01, 2015 7:05 pm

Re: Help Pick Funds for 401K

Post by sawhorse » Thu Nov 08, 2018 6:09 pm

vineviz wrote:
Thu Nov 08, 2018 2:50 pm
BajaMig wrote:
Thu Nov 08, 2018 2:22 pm
Can you tell me why you don’t use TIPS? I’m still learning all of this stuff.

I appreciate your tips on the other funds.
The only advantage of TIPS over nominal Treasuries is that TIPS provide a explicit hedge against unexpected inflation.

For an investor who is relatively young (under age 50, say) and fully employed , both equities and human capital (in the form of future wages) provide sufficient inflation protection.
I-bonds are a great way to protect against inflation. They can only be bought with after tax money, but the tax on interest can be deferred until you redeem the bonds, and they are not subject to state tax.

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ruralavalon
Posts: 14079
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Help Pick Funds for 401K

Post by ruralavalon » Fri Nov 09, 2018 11:28 am

BajaMig wrote:
Thu Nov 08, 2018 2:22 pm
Can you tell me why you don’t use TIPS? I’m still learning all of this stuff.

I appreciate your tips on the other funds.
TIPS only protect against UNanticipated inflation.

You are 45, 20 years to retirement, with a 70/30 asset allocation. Your inflation protection is your earning potential and a relatively high stock allocation.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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