How to decide VT vs VTI?

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destin
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Joined: Wed Dec 27, 2017 3:20 pm

How to decide VT vs VTI?

Post by destin » Wed May 16, 2018 3:35 pm

I was warned about talking about economics and global news so I'm not sure how to ask this question.

For a diversified portfolio with growth, how do you choose between VT vs VTI (and equivalent) without thinking about economics? What is the Boglehead way to think about these two choices? If I had to only pick one, what considerations should I have when deciding and what even should happen for me to change from one or to the other?

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Pajamas
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Re: How to decide VT vs VTI?

Post by Pajamas » Wed May 16, 2018 3:47 pm

destin wrote:
Wed May 16, 2018 3:35 pm
I was warned about talking about economics and global news so I'm not sure how to ask this question.

For a diversified portfolio with growth, how do you choose between VT vs VTI (and equivalent) without thinking about economics? What is the Boglehead way to think about these two choices? If I had to only pick one, what considerations should I have when deciding and what even should happen for me to change from one or to the other?
You would probably get better responses if you gave the full name of the funds you are referring to and even included a little information about what they hold, especially since you are asking about equivalents, too.

Chuck
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Re: How to decide VT vs VTI?

Post by Chuck » Wed May 16, 2018 4:07 pm

VT is more diversified.

However, if you use VTI and VEU separately you can choose your own allocation. You may also have more options with respect to tax lots, etc.

I tend to be more slicey dicey, but for a worldwide allocation, VT is the "set it and forget it" option. I don't think there is a wrong answer. After 2008-2010, US has done better than non-US, but you can't know the future.

lostdog
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Re: How to decide VT vs VTI?

Post by lostdog » Wed May 16, 2018 4:38 pm

If you want simple and set and forget it pick VT and go live your life.
Hear the clock ticking? That’s your life flying by while you listen to market pundits and watch stock prices fluctuate. -Humble Dollar

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JoMoney
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Re: How to decide VT vs VTI?

Post by JoMoney » Wed May 16, 2018 6:05 pm

I think either is a fine choice. Despite there being some potential advantages in expenses and tax management of keeping your international/domesticate in separate funds, I'm partial to the simplicity of a single fund.

I'm also partial to VTI (personally I use an S&P 500 index), as Mr.Bogle has argued, I don't think an international allocation is necessary for U.S. investors to have a reasonably well diversified portfolio.
The expenses and tax consequences of a U.S. portfolio are lower for U.S. investors, and there are additional risks associated with international investing.
... but I would recommend you go with the one that you'll lose less sleep over. If you're going to drive yourself crazy if you don't have an international allocation then go VT, if you're going to lose sleep over the various risks of holding international stocks, or because it doesn't track with U.S. stock performance, then pick a diversified domestic portfolio like VTI.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

ThrustVectoring
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Re: How to decide VT vs VTI?

Post by ThrustVectoring » Wed May 16, 2018 6:29 pm

Chuck wrote:
Wed May 16, 2018 4:07 pm
VT is more diversified.

However, if you use VTI and VEU separately you can choose your own allocation. You may also have more options with respect to tax lots, etc.

I tend to be more slicey dicey, but for a worldwide allocation, VT is the "set it and forget it" option. I don't think there is a wrong answer. After 2008-2010, US has done better than non-US, but you can't know the future.
The vanguard international stock ETF that you probably want is VXUS, not VEU.

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Alexa9
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Re: How to decide VT vs VTI?

Post by Alexa9 » Wed May 16, 2018 6:46 pm

VTI + VXUS > VT
Lower expense ratio, more diversified.

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