VWENX v. VTSAX?

ExFlyBoy5

ExFlyBoy5

Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Long story not so long, I am looking at selling off some individual stocks for ease of portfolio management. It's not a large amount of money (relative to portfolio overall) but I am just wanting it to be simple and get rid of the individual stocks.

Currently, pension and rental income pays all expenses (and then some that I am still contributing to VWENX). I currently have 32% of my assets in VWELX and have no issues throwing the proceeds to VWENX (which would then make it about 35%) but thought maybe putting it in VTSAX instead.

Anyone think of a good reason NOT to do this? Yes, this is a taxable account and I realize that there are capital gains with the sale, but I am comfortable with that. I have held these stocks for a while and will make a decent amount of return on them and want to cash 'em out while the gettin' is good.

Edit..I just realized that I have the holdings in VWENX as opposed to VWELX; so the thread title is incorrect.
 
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I'm looking at buying 500k worth of one or the other tomorrow. Right now I'm leaning towards VWENX. I'm planning on retiring later this year and will transfer another 500k form 401k into the same account. I may buy VTSAX then or visa versa...

I's a tough decision for sure...
 
I have no VWENX as I prefer to hold bonds outright. I like VTSAX as an equity index and do own some of that.
 
Owners of VWENX in a taxable account will take a significant tax hit. Vanguard even says so on their web site. Folks who simply use performance numbers won't even know that they are costing themselves money because they may pay the taxes from other sources such as paychecks, social security, pensions, etc. They will just think that taxes are a fact of life.

VWENX and VTSAX don't even have the same asset allocation. VWENX has a lot of bonds while VTSAX has no bonds. A more proper comparison would be between VWENX and VTSAX+VBTLX (in the proper stock:bond ratio). Or VWENX versus VBIAX.

If one is going to own VWENX which is a fine actively-managed fund, then own it in a tax-advantaged account or be in the 0% tax bracket. One can own VTSAX+VBTLX if VTSAX goes in taxable (or tax-advantaged) and VBTLX goes in tax-advantaged and probably outdo VWENX handily on after-tax return.
 
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All good points...

Our situation dosen't fall into the taxable category. VWENX will part of a tax deferred IRA. VTSAX will be added later and the overall asset allocation may be adjusted accordingly at that time.

Once the DW retires in 3 yrs or so we'll establish fund allocations for her IRA. Not sure yet what the ratio will be but It'll likely match my allocation as we go forward.
 
Hire someone who knows how to invest and don't buy into the whole Vanguard Index investing myth. You get what you pay for with Vanguard.
 
Indexes and mutual fund investing requires an investor to hold through potential 60% plus drawdowns for several market cycles something most do not have the liquidity or time horizon to do. Most investors don't understand how index and mutual fund returns are calculated and reported. Time vs dollar weighted return. If you don't know how to calculate the IRR and Standard Deviation and correlation coefficient R2 of a fund or an index to the benchmark you are trying to compete with your flying blind. And to be frank most mutual fund mangers just don't know how to trade. Shall I go on :confused:
 
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planman said:
Hire someone who knows how to invest and don't buy into the whole Vanguard Index investing myth. You get what you pay for with Vanguard.
Click to expand...
Great advice. First thing Monday, I am liquidating all my positions in Vanguard (and the TSP too...it's such a rip off!) and heading down to my local Edward Jones FA. I'm sure he will be happy to 'manage' my assets.

Looking forward to additional useful information!
 
I doubt you will find any retail broker able to trade. If he or she knew how to make money why would he need you ?
 
The key to successful investing is finding where value intersects with momentum. Only through hard work can you find low risk investments trending higher. And only through years of watching and learning markets will you be able to build a money management system that will keep you out of markets that crush most investors.
 
planman said:
The key to successful investing is finding where value intersects with momentum. Only through hard work can you find low risk investments trending higher. And only through years of watching and learning markets will you be able to build a money management system that will keep you out of markets that crush most investors.
Click to expand...

This doesn't seem like your sort of crowd. What motivates you to post here?
 
Contemplating retirement at 51 after trading my own account for a living last 30 years. Did I stumble into the wrong room ?
 
"...if you have 1,000 chimpanzees flip coins ten times in a row, it is likely that one of them will get heads all ten times. We call the chimpanzee lucky. If the chimpanzee were an investor we would call them talented."

Congratulations on your contemplation.
 
planman said:
The key to successful investing is finding where value intersects with momentum. Only through hard work can you find low risk investments trending higher. And only through years of watching and learning markets will you be able to build a money management system that will keep you out of markets that crush most investors.
Click to expand...

Not to hijack this thread, but you should be a good sport like Boho and join the the "Beat Boho" contest to show if you "got game" (or not) to see where your system stacks up against others ... even the dirty indexers here :).
 
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ExFlyBoy5 said:
..... I am looking at selling off some individual stocks for ease of portfolio management. It's not a large amount of money (relative to portfolio overall) but I am just wanting it to be simple and get rid of the individual stocks.

Currently, pension and rental income pays all expenses (and then some that I am still contributing to VWENX). I currently have 32% of my assets in VWELX and have no issues throwing the proceeds to VWENX (which would then make it about 35%) but thought maybe putting it in VTSAX instead.
......
Click to expand...

Since it's a taxable account why not put it into VTI instead of VTSAX, so you don't get capital gain declaration surprises OR even SCHD ?
 
Sunset said:
Since it's a taxable account why not put it into VTI instead of VTSAX, so you don't get capital gain declaration surprises OR even SCHD ?
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There is a misunderstanding here. VTSAX and VTI are just different share classes of the same fund. If one of them has a capital gain distribution, then the other one will as well for the exact same percentage amount. They are the same fund.
 
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planman said:
Did I stumble into the wrong room ?
Click to expand...
Not sure, but generally, online etiquette is quite similar to real life. It's not usually the best idea to simply stumble into a room full of people and start loudly voicing opinions, without first having spent some time getting to know the people and the general terrain.

On the other hand, it makes good viewing for the rest of us. Welcome to the forum :D
 
Unfortunately, its doesn't seem like this group has much to share on making money in the markets. Mr. Flish, your analogy about investors being monkey's doing the same thing over and over again and expecting a different result is right on - which is why those of us that have put in the time and effort to understand markets will continue to make money at the rest of the markets expense. Best of luck gentlemen.
 
I would suggest that this group as a whole shares the philosophy that

1) Trying to time the markets does not work
2) Investing in actively managed funds will underperform index funds over the long term
3) Those who suggest that the above two concepts are not true generally either have something they are trying to sell, or they like to gamble and believe they can beat the odds.

If you would like to share your thoughts on investing, I think people would be opening to hearing what you have to say. But so far you've just used a lot of jargon and technical terms without saying anything specific. This forum has some very smart people in it. You are not going to BS them with fancy terms. If you have a well thought out set of ideas on alternative investments theories to the ones I have outlined, please do share. And understand, when you do, people will be very skeptical. And that is OK too.
 
I agree with 1 thru 3. I looking for value in areas that most investors don't. I specialize in conversions, spinoffs, event driven events and arbitrage. I do not wish to compete with index managers, funds or the masses. I was hoping to find some others to talk about the inefficiencies of the markets and some good fishing holes which is why I entered the "stock room" Best,
 
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