Schwab 3 Fund Example in the Wiki Still the Model?

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JJP88
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Schwab 3 Fund Example in the Wiki Still the Model?

Post by JJP88 » Fri Jan 11, 2019 11:58 pm

So I recently moved accounts out of a TransAmerica Mutual Fund (1.45 ER) that was set up for me and now have the cash value isitting in a money market at Schwab. I know the example 3 fund from the wiki, but I was wondering how old that is and whether there is an updated mix I should adopt.

Such as Schwab’s 1000 Fund Index or the S&P 500 index? Is there overlap between these and the total stock market index?

I guess what I am asking for is examples of Schwab Index Portfolios.

This is for a traditional ira.

I am already using the suggested 3 fund model and a 2060 target date fund in my Roth.

Lastly while I am asking questions, do you all reallocate during specific dates or just when the your allocation swings too far in one direction? What is consequences of rebalancing too frequently in an IRA?

Thanks for the help.

mcraepat9
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Re: Schwab 3 Fund Example in the Wiki Still the Model?

Post by mcraepat9 » Sat Jan 12, 2019 12:17 am

If you are using a 2060 target date fund in your Roth, why not use a similar low-cost target date fund in your traditional IRA? Schwab has good low cost TDF, just be sure the word “index” is in the title - the regular Schwab Target date funds are higher fee and not worth your time.

https://www.schwab.com/public/schwab/in ... ol%3dSWYNX
Amateur investors are not cool-headed logicians.

Topic Author
JJP88
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Re: Schwab 3 Fund Example in the Wiki Still the Model?

Post by JJP88 » Sat Jan 12, 2019 8:26 am

No reason other than I just want to try my hand at managing a fund portfolio and seeing how the performances compare.I probably have 40 years until retirement (I am 30).

KingRiggs
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Re: Schwab 3 Fund Example in the Wiki Still the Model?

Post by KingRiggs » Sat Jan 12, 2019 8:48 am

My Schwab 3-fund portfolio consists of:

Schwab Total Stock Market Index (SWTSX)
Schwab International Index (SWISX)
Schwab US Aggregate Bond Index (SWAGX)

I’m sure you could get more creative or more granular, breaking the market into smaller and smaller slices, but sometimes simpler is better. The above portfolio is easy to rebalance and the highest ER is 0.11%.

champion_ham
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Re: Schwab 3 Fund Example in the Wiki Still the Model?

Post by champion_ham » Sat Jan 12, 2019 8:49 am

KingRiggs wrote:
Sat Jan 12, 2019 8:48 am
My Schwab 3-fund portfolio consists of:

Schwab Total Stock Market Index (SWTSX)
Schwab International Index (SWISX)
Schwab US Aggregate Bond Index (SWAGX)

I’m sure you could get more creative or more granular, breaking the market into smaller and smaller slices, but sometimes simpler is better. The above portfolio is easy to rebalance and the highest ER is 0.11%.
+1

Olemiss540
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Re: Schwab 3 Fund Example in the Wiki Still the Model?

Post by Olemiss540 » Sat Jan 12, 2019 8:51 am

JJP88 wrote:
Sat Jan 12, 2019 8:26 am
No reason other than I just want to try my hand at managing a fund portfolio and seeing how the performances compare.I probably have 40 years until retirement (I am 30).
Not a good reason, and can lead to performance chasing which will drag down returns. I highly recommend sticking with a target date fund. These are strictly 4 fund index portfolios being automatically and constantly rebalanced.

If you prefer to go for a 3 fund portfolio as recommended as an alternative, include ALL money across all portfolios in order to maintain a consistent asset allocation and lower your fees by a minuscule amount below a target date fund.

There are some very good reasons to move away from a target date fund (preference on international investing, having a large taxable investment account, etc) but those do not seem to pertain to you based on your post. Settle for average returns (target date funds), and dont think you have more investment abilities than the folks buying what you are selling or selling what your buying. Average returns will put your portfolio returns in the top 20th percentile and will be the simplest way to avoid human error at the same time.
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.

Topic Author
JJP88
Posts: 19
Joined: Sun Apr 22, 2018 4:41 pm

Re: Schwab 3 Fund Example in the Wiki Still the Model?

Post by JJP88 » Sat Jan 12, 2019 8:58 am

Well at some point I hope to start a taxable account and thought managing it in an IRA was like learning to ride a bike with traing. My other account is in SWYNX, so I guess I will just stick it there.

retiredjg
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Re: Schwab 3 Fund Example in the Wiki Still the Model?

Post by retiredjg » Sat Jan 12, 2019 9:07 am

I think your idea of trying your hand at managing the individual funds is a good one. But don't bother to compare performance. Differences should be minimal and any short term difference is completely meaningless.

ScroogeMcDuck
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Re: Schwab 3 Fund Example in the Wiki Still the Model?

Post by ScroogeMcDuck » Sat Jan 12, 2019 9:07 am

If you want emerging markets exposure, you'll need to add another fund. For that reason, I use the Vanguard international fund (VTIAX/VXUS) instead of SWISX.

Olemiss540
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Re: Schwab 3 Fund Example in the Wiki Still the Model?

Post by Olemiss540 » Sat Jan 12, 2019 9:09 am

JJP88 wrote:
Sat Jan 12, 2019 8:58 am
Well at some point I hope to start a taxable account and thought managing it in an IRA was like learning to ride a bike with traing. My other account is in SWYNX, so I guess I will just stick it there.
There is no downside (except convenience and time) to doing a three find portfolio so go ahead if you want to, but dont do it to compare returns with a target date fund. You would be cross shopping identical products and any incidental difference in returns would not be repeatable or due to unknown variations in asset allocations or risk.
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.

Olemiss540
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Joined: Fri Aug 18, 2017 8:46 pm

Re: Schwab 3 Fund Example in the Wiki Still the Model?

Post by Olemiss540 » Sat Jan 12, 2019 9:10 am

ScroogeMcDuck wrote:
Sat Jan 12, 2019 9:07 am
If you want emerging markets exposure, you'll need to add another fund. For that reason, I use the Vanguard international fund (VTIAX/VXUS) instead of SWISX.
Wouldn't SWISX contain emerging markets at market weight or is it more of a large cap tilted international fund?
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.

ScroogeMcDuck
Posts: 48
Joined: Thu Jan 22, 2015 4:25 pm

Re: Schwab 3 Fund Example in the Wiki Still the Model?

Post by ScroogeMcDuck » Sat Jan 12, 2019 9:18 am

Olemiss540 wrote:
Sat Jan 12, 2019 9:10 am
ScroogeMcDuck wrote:
Sat Jan 12, 2019 9:07 am
If you want emerging markets exposure, you'll need to add another fund. For that reason, I use the Vanguard international fund (VTIAX/VXUS) instead of SWISX.
Wouldn't SWISX contain emerging markets at market weight?
No. From the Schwab description:

The investment seeks to track the performance of a benchmark index that measures the total return of large- publicly traded non-U.S. companies from countries with developed equity markets outside of the United States.

https://www.schwab.wallst.com/Prospect/ ... mbol=SWISX

Olemiss540
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Joined: Fri Aug 18, 2017 8:46 pm

Re: Schwab 3 Fund Example in the Wiki Still the Model?

Post by Olemiss540 » Sat Jan 12, 2019 9:21 am

ScroogeMcDuck wrote:
Sat Jan 12, 2019 9:18 am
Olemiss540 wrote:
Sat Jan 12, 2019 9:10 am
ScroogeMcDuck wrote:
Sat Jan 12, 2019 9:07 am
If you want emerging markets exposure, you'll need to add another fund. For that reason, I use the Vanguard international fund (VTIAX/VXUS) instead of SWISX.
Wouldn't SWISX contain emerging markets at market weight?
No. From the Schwab description:

The investment seeks to track the performance of a benchmark index that measures the total return of large- publicly traded non-U.S. companies from countries with developed equity markets outside of the United States.

https://www.schwab.wallst.com/Prospect/ ... mbol=SWISX
Thanks. Was researching via the google machine when you replied.
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.

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