Was set on VTWAX and chill until I moved to Vanguard

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manlymatt83
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Was set on VTWAX and chill until I moved to Vanguard

Post by manlymatt83 »

I was set on VTWAX (or rather…. VT) and chill in my taxable until I moved my taxable account to Vanguard this week.

Decided to tax loss harvest some VT for VTSAX and VTIAX in the process.

The goal has always been to “not have to think”. Logging in and splitting between VTSAX and VTIAX every time I went to buy was going to be too complicated for me. Also didn’t want to be tempted to adjust my allocation up/down based on how one country vs the others was performing.

But at Vanguard you can auto invest into Vanguard mutual funds. That changes things for me. I can deposit $2000/paycheck for example and have 1200 go to VTSAX and 800 go to VTIAX automatically. Without even logging in.

In that case, might it make sense to login once per year to “rebalance” back to world weight with hopefully new contributions and otherwise leave it on autopilot at 60/40? (Close enough)?

I guess the only issue I’d run into is when things change and US/ex-US becomes 80/20 or 50/50. My auto investing could get things pretty off track after a few years.

Maybe the foreign tax credit isn’t for me and I should just stick with VTWAX and chill. ¯\_(ツ)_/¯
rkhusky
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Re: Was set on VTWAX and chill until I moved to Vanguard

Post by rkhusky »

Maybe in 30 days you will TLH VTSAX and VTIAX back into VTWAX.

Only you can decide how much work to put into monitoring and adjusting your account and whether the work to maintain a particular allocation is worth the effort.
runninginvestor
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Re: Was set on VTWAX and chill until I moved to Vanguard

Post by runninginvestor »

How much are you auto investing compared to the size of the current investment? For example, if you have $30,000 into VTIAX already, but our only putting in $3,000 this year, I can't imagine the drift would make too much of a difference before you rebalance. I could be wrong, but it would be something to check out. But if you're really concerned, you can maybe rebalance semi-annually or quarterly.
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retired@50
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Re: Was set on VTWAX and chill until I moved to Vanguard

Post by retired@50 »

manlymatt83 wrote: Fri May 13, 2022 4:33 pm My auto investing could get things pretty off track after a few years.
Only if you stop paying attention.

I'd imagine a once per year check in on the VTSAX / VTIAX pair would be sufficient.

I also think that 60/40 is close enough to world weighting that you won't notice a difference. You could check the weight used by VTWAX once per year too, when you make an adjustment to your 1200 / 800 investment amounts.

Regards,
This is one person's opinion. Nothing more.
absolute zero
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Re: Was set on VTWAX and chill until I moved to Vanguard

Post by absolute zero »

Given your past indecisiveness on an asset allocation (I remember some of your posts from last year) I'd suggest (1) switch back to VTWAX after a month (2) setup auto-invests into VTWAX and (3) leave things alone.
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goingup
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Re: Was set on VTWAX and chill until I moved to Vanguard

Post by goingup »

manlymatt83 wrote: Fri May 13, 2022 4:33 pm The goal has always been to “not have to think”.
Setting up auto purchases will free your mind! :D You really don't have to rebalance (tinker) very often unless you want to. Jack Bogle used to say there was no reason for "slavish" rebalancing. Bill Bernstein has said rebalancing every several years is fine. I've always favored letting the portfolio drift.
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HMSVictory
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Re: Was set on VTWAX and chill until I moved to Vanguard

Post by HMSVictory »

I find having 2 funds in a taxable account is not too much (VTSAX and VTIAX) and yes I auto invest into them monthly and hardly every re balance.

I don't like the breakdown between US and International in VT - I prefer 80/20 but I admit I could be wrong moving forward.
Stay the course!
000
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Re: Was set on VTWAX and chill until I moved to Vanguard

Post by 000 »

I don't think only logging in once a year is a good idea anyways due to security issues.

I also doubt using two funds will drift significantly from market cap within a year's time frame.

Consider this: if I contribute to the two funds at current world market cap, my allocation will stay very close to world market cap because the separate funds will also move with market cap, just like the individual stocks in the total world fund; however, distributions and corporate events may cause some very slight shift. In any event I would feel completely comfortable setting my auto invest ratio to the current market cap and only changing it once a year or so to whatever the new market cap is at that time. The amount of drift is likely to be quite inconsequential.
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manlymatt83
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Re: Was set on VTWAX and chill until I moved to Vanguard

Post by manlymatt83 »

absolute zero wrote: Fri May 13, 2022 5:43 pm Given your past indecisiveness on an asset allocation (I remember some of your posts from last year) I'd suggest (1) switch back to VTWAX after a month (2) setup auto-invests into VTWAX and (3) leave things alone.
Thanks for this! Was the reminder I needed to go one fund :)
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