TSM for Taxable Account?

[Tatupu]

All -- In order to maintain proper AA for my overall portfolio, I need to start investing in a domestic total stock market index fund in my taxable Vanguard account.

Is Vanguard Total Stock Market Index Fund the clear way to go or are there other funds I should be looking at?

The other fund in my taxable account that I regularly contribute to is Vanguard FTSE All-World ex-US Index Fund.

Thanks for your thoughts.

[dharrythomas]

I need to start investing in a domestic total stock market index fund

If that's what you're looking for, Vanguard is as good as anyone else and better than most.

The fund I use in our taxable accout is the Total World Stock Index. It's expenses are currently a little high but I expect them to drop as time goes by.

Harry

[Bob's not my name]

as time goes by

Play it Sam.

[Taylor Larimore]

Hi Tatupu:

It is impossible to recommend a specific fund without knowing about the other securities in your portfolio and your desired asset-allocation plan.

In March 2008, Boglehead Piper Warrior suggested this portfolio:

Taxable:
16.05% VFWIX/VEU FTSE All-World ex-US

His Roth (Vanguard)
9.21% VGTSX Total International

His TSP
17.45% TSP C
7.13% TSP S

Her IRA Rollover (Vanguard)
10% VGSIX REIT Index
14.74% VGTSX Total International
21.48% VTSMX Total Stock Market

Her Roth IRA
0%

Her TSP
3.94% TSP C

Total: 100.00%

Please list your present portfolio in a similar format. We can then give you an informed reply.

Thank you.

[Tatupu]

Taylor -- thanks for responding, and sorry I came off as a fool. Let me try to re-phrase my question and cast aside my previous reference to AA.

Here is the issue:

I want to invest in a single fund (in a taxable account) that gives me broad exposure to entire U.S. equity market, including small/mid/large growth and value stocks.

Is there a Vanguard index fund that makes better sense than TSM to achieve this goal in a taxable account?

Thanks,
Brendan

[baw703916]

I'd say no.

[maxinout]

I concur.

[Taylor Larimore]

Hi Brendan:

I agree with the previous replies for these primary reasons:

Total Stock Market Index Fund is the most diversified domestic stock fund.

Many academics believe TSM is on the "Efficient Frontier" (no fund has higher return without more risk).

TSM is VERY tax-efficient with extremely low turnover.

TSM is very low cost.

TSM converts tax-INefficient stocks into tax-Efficient stocks. The result is more room in tax-advantaged accounts for tax-inefficient securities.

Additions and withdrawals into and out of TSM do not unbalance the domestic portion of a portfolio.

Total Stock Market Index Fund is Mr. Bogle's favorite fund. It can be held 'forever.'

Total International Stock Index Fund is also an excellent choice for a taxable account.

Simple to understand and maintain.

[Tatupu]

Appreciate the responses and all the great insight one can get on this forum.

Thanks,
Brendan