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Advice needed on on 2 TLH questions

Posted: Sun Dec 23, 2018 7:28 am
by 3-20Characters
Question #1: How does this sound?
VTSAX - Vanguard Total Stock Market …becomes… 80% VFIAX - Vanguard 500 Index + 20% VEXAX - Vanguard Extended Market. Or would you just swap it all for 100% Vanguard 500 Index for simplicity’s sake? As with any TLH, the assumption is that I may need to hold new the funds indefinitely.

Question #2: I have already exceeded losses for what I can deduct in 2018. The way I understand it however, there is no reason not to continue taking short and long term losses. Anything that can’t be deducted in 2018 gets rolled into subsequent years. Correct?

Re: Advice needed on on 2 TLH questions

Posted: Sun Dec 23, 2018 7:37 am
by Chip
1. Either way is fine. It's up to you whether you value simplicity vs. exactly following an index. Suggest you chart VFIAX vs. VTSAX to see the difference over the years.

2. Correct.

Re: Advice needed on on 2 TLH questions

Posted: Sun Dec 23, 2018 7:46 am
by 3-20Characters
Chip wrote: Sun Dec 23, 2018 7:37 am 1. Either way is fine. It's up to you whether you value simplicity vs. exactly following an index. Suggest you chart VFIAX vs. VTSAX to see the difference over the years.

Thanks. I did run some charts and the 80/20 combo tracks closer to Total Stock market. I guess that’s my answer. :D

2. Correct.

Re: Advice needed on on 2 TLH questions

Posted: Sun Dec 23, 2018 6:30 pm
by PhysicianOnFIRE
3-20Characters wrote: Sun Dec 23, 2018 7:46 am
Chip wrote: Sun Dec 23, 2018 7:37 am 1. Either way is fine. It's up to you whether you value simplicity vs. exactly following an index. Suggest you chart VFIAX vs. VTSAX to see the difference over the years.

Thanks. I did run some charts and the 80/20 combo tracks closer to Total Stock market. I guess that’s my answer. :D

2. Correct.
It's a small point, but I'd opt for the S&P 500 fund for two reasons. One is simplicity. The other is the expense ratio of the funds involved. VEXAX has a low expense ratio at 0.08 but it is double that of the other two funds. The correlation between VTSAX and VFIAX is very close to 1.0. That being said, there's really no right or wrong answer. Just sharing what I would do (and have done many times).

:beer
-PoF

Re: Advice needed on on 2 TLH questions

Posted: Sun Dec 23, 2018 6:34 pm
by 3-20Characters
PhysicianOnFIRE wrote: Sun Dec 23, 2018 6:30 pm
3-20Characters wrote: Sun Dec 23, 2018 7:46 am
Chip wrote: Sun Dec 23, 2018 7:37 am 1. Either way is fine. It's up to you whether you value simplicity vs. exactly following an index. Suggest you chart VFIAX vs. VTSAX to see the difference over the years.

Thanks. I did run some charts and the 80/20 combo tracks closer to Total Stock market. I guess that’s my answer. :D

2. Correct.
It's a small point, but I'd opt for the S&P 500 fund for two reasons. One is simplicity. The other is the expense ratio of the funds involved. VEXAX has a low expense ratio at 0.08 but it is double that of the other two funds. The correlation between VTSAX and VFIAX is very close to 1.0. That being said, there's really no right or wrong answer. Just sharing what I would do (and have done many times).

:beer
-PoF
Thanks! I appreciate the input.