Taxable account allocation

[Lazyfabs]

S&P 500 vs Total Stock Market

Currently we have money in are taxable accounts (savings, brokerage) that are looking for some thoughts on how to distribute.

Want to maintain a 50/50 split for this money. Half of the money is on savings account for liquidity purposes. The othe half would like put in either Vanguard S&P 500 or total stock market admiral shares for tax efficient purposes and to follow/fit with in our overall asset allocation.

Having trouble deciding which of the funds to use. From researching lipper, Morningstar, Vanguard, etc. both are similar in all manners, but S&P 500 seems tad less volatile and tad more tax efficient. Monthly contributions would be made to both savings and fund.

Any ideas/insight why choose one fund over the other?

Thanks

 

[pb4uski]

As you probably know, the 500 index is a large cap play and Total Stock covers large, mid and small cap stocks. I would lean towards Total Stock myself but it depends on how your other holdings fit with this change and whether you are trying to cover the entire market or include some large cap tilt to your equity holdings.

Wellington might be another good option.

 

[FIREd]

I would go for Total Stock because it covers a broader market range.

 

[nash031]

Total Stock Market. I was an S&P 500 investor and made the switch. More volatile in the short term, but I don't care about that. Over the long term, return is a little bit better and the tax difference has been negligible.

 

[David1961]

Either is a good choice, really. As others have mentioned, the total stock market fund gives you a broader market exposure. So if it's one or the other, that's probably the better choice.

 

[Lazyfabs]

Have Wellington in Roth. Don't want to put Wellington type in taxable b/c of tax inefficiency.

 

[Lazyfabs]

Would you consider the the tax difference in the short term more of an issue vs long term?

The possible short term volatility is my one sticking point. not a huge issue at the moment and definitely not over the distant near future if all somewhat stays the course. We don't anticipate having to tap into this money any time soon.

 

[pb4uski]

Have Wellington in Roth. Don't want to put Wellington type in taxable b/c of tax inefficiency.

My bad. I meant Windsor or Windsor II.

It would give you a large cap/value/managed tilt f that is something you are interested in.

 

[youbet]

Currently we have money in are taxable accounts (savings, brokerage) that are looking for some thoughts on how to distribute.

Want to maintain a 50/50 split for this money. Half of the money is on savings account for liquidity purposes. The othe half would like put in either Vanguard S&P 500 or total stock market admiral shares for tax efficient purposes and to follow/fit with in our overall asset allocation.

Having trouble deciding which of the funds to use. From researching lipper, Morningstar, Vanguard, etc. both are similar in all manners, but S&P 500 seems tad less volatile and tad more tax efficient. Monthly contributions would be made to both savings and fund.

Any ideas/insight why choose one fund over the other?

Thanks

S and P 500 plus market completion fund. You can be identical to TSM or lean a bit large or small depending on your outlook each year.

 

[NgineER]

S and P 500 plus market completion fund. You can be identical to TSM or lean a bit large or small depending on your outlook each year.

I have total stock market in taxable at this point.
I also have S&P500 and extended market in my IRA where I want some additional small/medium market exposure.

In the event of a big crash you can loss harvest in your taxable by switching from TS and S&P500/ExtdMkt without risking wash sale issues.

 

[pb4uski]

....In the event of a big crash you can loss harvest in your taxable by switching from TS and S&P500/ExtdMkt without risking wash sale issues.

Be careful of the timing though as for wash sale they look across all you accounts, taxable, tax-deferred and tax-free.

Also see the wash sale thread currently active.