Edward Jones FA had me in the following funds in my 401k. I need advice.

[F.I.R.E User]

100% Fidelity 500 Index Fund (FXAIX) in 401(k)
100% Vanguard Extended Market ETF (VXF) in Roth IRA

I have 100% VTSAX at Vanguard for taxable at Vanguard.

I will have FZROZ at Fidelity. It’s a zero fee. I can’t buy VTSAX at Fidelity since it will have $75 fee. I could buy VTI though.

 

[mrfeh]

I could buy VTI. What’s wrong with FZROZ?

Absolutely nothing.

 

[F.I.R.E User]

Absolutely nothing.

I would have chosen VTSAX at Vanguard but they were not going to credit me $135 total fees from leaving EJ.

Fidelity will so I created a Roth IRA at Fidelity.

 

[38Chevy454]

Just clarification: FZROX is Fidelity total market index zero fee fund. Not FZROZ, which is an error that keeps repeating.


I think FZROX is a fine choice since it is total market, although results will be similar to S&P 500 fund performance. Just a bit more diversification on total market.

 

[F.I.R.E User]

Just clarification: FZROX is Fidelity total market index zero fee fund. Not FZROZ, which is an error that keeps repeating.


I think FZROX is a fine choice since it is total market, although results will be similar to S&P 500 fund performance. Just a bit more diversification on total market.

FZROX, sorry.

 

[F.I.R.E User]

Is that your entire portfolio? You should view your investments in total, not account by account.

If you haven't read the page I linked previously, that's a good place to start.

I posted other accounts.

 

[pb4uski]

I've owned both, and IMO, VTSAX and FZROX are close to identical.

Portfolio	Initial Balance	Final Balance	CAGR	Stdev	Best Year	Worst Year	Max. Drawdown	Sharpe Ratio	Sortino Ratio	US Mkt Correlation
FZROX	$10,000	$15,247	16.58%	20.25%	31.15%	-14.15%	-21.08%	0.80	1.23	1.00
VTSAX	$10,000	$15,273	16.65%	20.22%	30.80%	-14.13%	-20.87%	0.80	1.24	1.00

https://www.portfoliovisualizer.com...cation1_1=100&symbol2=VTSAX&allocation2_2=100

 

[F.I.R.E User]

I've owned both, and IMO, VTSAX and FZROX are close to identical.

Portfolio	Initial Balance	Final Balance	CAGR	Stdev	Best Year	Worst Year	Max. Drawdown	Sharpe Ratio	Sortino Ratio	US Mkt Correlation
FZROX	$10,000	$15,247	16.58%	20.25%	31.15%	-14.15%	-21.08%	0.80	1.23	1.00
VTSAX	$10,000	$15,273	16.65%	20.22%	30.80%	-14.13%	-20.87%	0.80	1.24	1.00

https://www.portfoliovisualizer.com...cation1_1=100&symbol2=VTSAX&allocation2_2=100

Thanks.

 

[F.I.R.E User]

1 fund should be optimal right?

 

[SevenUp]

1 fund should be optimal right?

"Optimal" in what sense?

 

[F.I.R.E User]

"Optimal" in what sense?

To mimic a fund like VTSAX/FZROX.

 

[SevenUp]

To mimic a fund like VTSAX/FZROX.

If you want to invest in the total US stock market, you'll need either a single fund that does so, or use multiple funds if there is no such single fund among your choices.

If you prefer using only one fund, and are willing to accept "something like" the total US market, then an S&P 500 or other fund will work.

If you don't have access to a single "total US market fund" then you have to choose between "one fund" vs. "total US market".

 

[F.I.R.E User]

If you want to invest in the total US stock market, you'll need either a single fund that does so, or use multiple funds if there is no such single fund among your choices.

If you prefer using only one fund, and are willing to accept "something like" the total US market, then an S&P 500 or other fund will work.

If you don't have access to a single "total US market fund" then you have to choose between "one fund" vs. "total US market".

Bada Bing posted:

85% FXAIX.
15% VSCPX.

What do you think?

 

[SevenUp]

Bada Bing posted:

85% FXAIX.
15% VSCPX.

What do you think?

I think that agrees with the numbers in Approximating total stock market - Bogleheads for someone who wants to invest in the total US stock market but doesn't have access to a single fund for that purpose.

 

[F.I.R.E User]

I think that agrees with the numbers in Approximating total stock market - Bogleheads for someone who wants to invest in the total US stock market but doesn't have access to a single fund for that purpose.

Oh ok.

Interestingly enough. My then EJ FA put me on mostly passively managed funds here but all actively on my then Roth IRA at EJ. This tells me they want to make max commissions. I also did not see those 2 funds in the link you posted as 85/15?

 

[SevenUp]

I also did not see those 2 funds in the link you posted as 85/15?

True, but did you see

85% Vanguard 500 Index Fund (VFIAX)
15% Vanguard Small-Cap Index Fund (VSMAX)?

When you compare FXAIX with VFIAX, and VSCPX with VSMAX, what do you find?

 

[F.I.R.E User]

True, but did you see

85% Vanguard 500 Index Fund (VFIAX)
15% Vanguard Small-Cap Index Fund (VSMAX)?

When you compare FXAIX with VFIAX, and VSCPX with VSMAX, what do you find?

They are both combos of total stock market?

 

[SevenUp]

They are both combos of total stock market?

How does FXAIX compare with VFIAX?
How does VSCPX compare with VSMAX?

 

[F.I.R.E User]

How does FXAIX compare with VFIAX?
How does VSCPX compare with VSMAX?

I am confused.

You mean 85% FXAIX and 15% VSCPX?

That was what Bada Bing said.

 

[SevenUp]

I am confused.

You mean 85% FXAIX and 15% VSCPX?

That was what Bada Bing said.

Correct.

You said you did not see that specific combination in the Bogleheads wiki article.

I'm asking you to compare the funds Bada Bing mentioned with one of the combinations in the Bogleheads wiki article.

How does FXAIX compare with VFIAX?
How does VSCPX compare with VSMAX?

 

[RetireeRobert]

Would it be better for me to do one fund?

You said you wanted one fund. You said you wanted simple. One fund is about as simple as one can get, I think simple is a good way to go. So, yes one fund is good.

You gave a list of fund choices available to you, and the list included VSCPX.

I suggest that as a good "one fund" choice. It is an index fund of small cap stocks. Over long long periods of time, studies have shown that small cap stocks outperform larger cap stocks. This particular fund has an expense ratio of .03%. That is another good thing, keep costs low. This fund is an index fund, so you get broad diversification within the small cap sector. And the turnover was 22% recently, relatively low, another good thing in an index fund. You also said you want 100% equity, and VSCPX also does that, in the small cap sector.

There are a million stories in the Naked City. This has been one of them.

 

[bada bing]

I am confused.

You mean 85% FXAIX and 15% VSCPX?

That was what Bada Bing said.

Here is a graph of the returns of VTSAX and a 2 fund portfolio of FXAIX + VSCPX 85%/15%. As you can see, the performance is virtually identical over the 10 year span. The two lines exactly overlay each other until they diverge just enough to see the separation in the last 6 months. They move in lockstep. That is because VTSAX (the total USA stock index) is made up of virtually the same components as the 85/15 mix of S&P500 + USA small cap index.

The broader question is what do you want for a portfolio ? The total stock index is a very popular choice for a portfolio foundation, but there is nothing magic about it. You would give up very little by choosing just the S&P500 index alone. It depends on how much you value the slightly greater simplicity of a single fund verses the slightly greater diversification of having the total stock market index represented by two funds. Kind of a coin toss and the eventual outcome is likely to be very close to the same. Your choice.

You can generate such portfolio comparisons using the site Portfolio Visualizer.
You might play with the interface using popular Total USA stock funds like VTSAX, VTI, SCHB, ITOT. They are all functionally the same thing, just different brands of the same commodity. https://www.portfoliovisualizer.com/

 

[F.I.R.E User]

You said you wanted one fund. You said you wanted simple. One fund is about as simple as one can get, I think simple is a good way to go. So, yes one fund is good.

You gave a list of fund choices available to you, and the list included VSCPX.

I suggest that as a good "one fund" choice. It is an index fund of small cap stocks. Over long long periods of time, studies have shown that small cap stocks outperform larger cap stocks. This particular fund has an expense ratio of .03%. That is another good thing, keep costs low. This fund is an index fund, so you get broad diversification within the small cap sector. And the turnover was 22% recently, relatively low, another good thing in an index fund. You also said you want 100% equity, and VSCPX also does that, in the small cap sector.

There are a million stories in the Naked City. This has been one of them.

It doesn't have to be 1 fund. 1 fund was to keep things simple. I am an aggressive investor meaning downturns like 2008 and 2020 don’t bother me since I would be DCA.

 

[RetireeRobert]

I am an aggressive investor meaning downturns like 2008 and 2020 don’t bother me since I would be DCA.

Another plus for the small cap index fund then, you being an aggressive investor. So, I would still recommend that one fund.

Small caps index would have a higher level of volatility then a large cap index fund such as S&P500, but your risk profile as stated, that should be ok.

Over long long periods of time, small cap indexes have outperformed large cap indexes, so you would be getting rewarded for enduring the larger volatility---over long long periods.

 

[F.I.R.E User]

​

Here is a graph of the returns of VTSAX and a 2 fund portfolio of FXAIX + VSCPX 85%/15%. As you can see, the performance is virtually identical over the 10 year span. The two lines exactly overlay each other until they diverge just enough to see the separation in the last 6 months. They move in lockstep. That is because VTSAX (the total USA stock index) is made up of virtually the same components as the 85/15 mix of S&P500 + USA small cap index.

The broader question is what do you want for a portfolio ? The total stock index is a very popular choice for a portfolio foundation, but there is nothing magic about it. You would give up very little by choosing just the S&P500 index alone. It depends on how much you value the slightly greater simplicity of a single fund verses the slightly greater diversification of having the total stock market index represented by two funds. Kind of a coin toss and the eventual outcome is likely to be very close to the same. Your choice.

You can generate such portfolio comparisons using the site Portfolio Visualizer.
You might play with the interface using popular Total USA stock funds like VTSAX, VTI, SCHB, ITOT. They are all functionally the same thing, just different brands of the same commodity. https://www.portfoliovisualizer.com/

I am an aggressive investor and not emotional at all when it comes up downturn like 2008 and 2020 because I would be DCA on it. Does funds like VTSAX and FZROX fall into this category?

My retirement age is anywhere from 55-60 with $2M goal. I am a single male, 43, no kids.