ETF portfolio

[FREE866]

So I'm reading JL Collins book The Simple Path to Wealth and I think I might be having an epiphany. I'm pretty much all stock in mine and the portfolios I manage for my family with like 6 ETFs like SPY, IWM , a growth and a value ETF , international ETF etc


anyone ever read it?



I'm going to be now managing my nieces inheritance and I'm thinking for their stock exposure ( which will be all or most of their portfolio given they are in their early 20's) i should just dump it all into VTSAX which will give them total exposure to large and small caps, .04 expense ratio which is great and just keep it simple. Thoughts?

 

[Out-to-Lunch]

I'm going to be now managing my nieces inheritance and I'm thinking for their stock exposure ( which will be all or most of their portfolio given they are in their early 20's) i should just dump it all into VTSAX which will give them total exposure to large and small caps, .04 expense ratio which is great and just keep it simple. Thoughts?

Yes! Do that. Don't convey to a 20-year-old that investing is hard and complicated. VTSAX will meet their investment needs.

 

[FREE866]

Yes! Do that. Don't convey to a 20-year-old that investing is hard and complicated. VTSAX will meet their investment needs.

Ha I know right? Only thing I don’t like is I like to have international exposure as I do in my portfolios with SCHE and SCHF and I only do ~ 10 % but I’m thinking what’s the point? This is so simple and they’ll get exposure to small and large cap just like I do with SCHG , SPY and IWM. Ran the 5-10-20 year numbers and VTSAX basically does what they combined do. $$ won’t be rolling in for a week or two so I have some time to mull this over. Thx. And I appreciate anyone else’s take.

 

[RetiredAt49]

VTI, VOO, and QQQ make up my portfolio. I use VTI and VOO as tax loss harvesting partners.

 

[DrRoy]

Yes, or VTI for an ETF.

 

[FREE866]

Yes, or VTI for an ETF.

what are differences in VTI vs VTSAX?

 

[enjoyinglife102]

If Warren Buffet can recommend his heirs simply invest 90% in the S&P 500 index and 10% in a ST Treasury fund, I would conclude your approach towards your nieces' inheritance is a sound one.

 

[FREE866]

If Warren Buffet can recommend his heirs simply invest 90% in the S&P 500 index and 10% in a ST Treasury fund, I would conclude your approach towards your nieces' inheritance is a sound one.

True
I’ve thought about that but I do want small cap stock exposure and it looks like VTSAX provides that

 

[FREE866]

Just backtested a portfolio of SPY, QQQ, and IWM vs just VTSAX....




the former actually did do a little better:


5 year return 10.4% CAGR vs 9.9%


10 year return 13.5% CAGR vs 12.7%


15 year return 10.2% vs 9.1%


20 year return 11.45% vs 10.3%


not by much, but still


not sure what I want to do

 

[dmpi]

VTI, VOO, and QQQ make up my portfolio. I use VTI and VOO as tax loss harvesting partners.

I also have IVV, VOO and SPY. There are all based off of the S&P 500. SPY trades the most and has the best liquidity but it also has the highest expense ratio. I too use all three for tax loss harvesting and also for optimizing my long term/short term capital gains.

 

[qwerty3656]

I've referred a few people to this site on Lazy portfolios. Although the high bond allocation might not be appropriate for a 20 year old.

https://www.bogleheads.org/wiki/Lazy_portfolios

 

[target2019]

what are differences in VTI vs VTSAX?

They are the same performance-wise. If you find VTSAX page at Vanguard, on the page you'll find a link to VTI.

In old accounts I use VTSAX.

When I'm purchasing total market in a newer account I use VTI. When you buy VTI it executes right away (or at start of next session).

 

[FREE866]

They are the same performance-wise. If you find VTSAX page at Vanguard, on the page you'll find a link to VTI.

In old accounts I use VTSAX.

When I'm purchasing total market in a newer account I use VTI. When you buy VTI it executes right away (or at start of next session).

thx


VTSAX doesnt execute right away? Its an ETF right? ::::

 

[target2019]

thx

VTSAX doesnt execute right away? Its an ETF right? ::::

VTSAX is a Mutual Fund (MF)
VTI is an Exchange-Traded Fund (ETF)

Long answer about MF trades at https://investor.vanguard.com/inves...on/online-trading/buying-selling-mutual-funds

There are sub-topics to expand on the page.

 

[FREE866]

VTSAX is a Mutual Fund (MF)
VTI is an Exchange-Traded Fund (ETF)

Long answer about MF trades at https://investor.vanguard.com/inves...on/online-trading/buying-selling-mutual-funds

There are sub-topics to expand on the page.

Oh man....how did I miss that thank you....then I def want VTI , the ETF

 

[target2019]

Oh man....how did I miss that thank you....then I def want VTI , the ETF

You didn't miss it. Was buried in a wall of text.

Anyways, VTI it is.

It can be purchased and sold without fee at most brokerages. That's an advantage too.

 

[FREE866]

You didn't miss it. Was buried in a wall of text.

Anyways, VTI it is.

It can be purchased and sold without fee at most brokerages. That's an advantage too.

I should have realized with 5 letters it was a mutual fund! Think I'm getting old


and yeah I think this will be perfect for them might want to do like 10% in an international stock ETF..any suggestions?


The account will be at Schwab and although VG customer service stinks they do have great ETFs!

 

[Exchme]

Just backtested a portfolio of SPY, QQQ, and IWM vs just VTSAX....




the former actually did do a little better:


5 year return 10.4% CAGR vs 9.9%


10 year return 13.5% CAGR vs 12.7%


15 year return 10.2% vs 9.1%


20 year return 11.45% vs 10.3%


not by much, but still


not sure what I want to do

I recommend the simple choice of a VTI or VTSAX. First, you are trying to educate them that it is not hard to do well, that simple is plenty good.

Second, no one is proven to reliably predict the future better than the sum of everyone's ideas that end up as the market price. So the cap weighted total market is the sum of everyone's knowledge.

As soon as you start back-testing, slicing and dicing you are falling into the trap you are trying to teach them to avoid. There will always be a better portfolio than the total market, but it is never knowable to say which one. Total market is also very low fee, and rarely has a capital gain to be taxed.

 

[FREE866]

I recommend the simple choice of a VTI or VTSAX. First, you are trying to educate them that it is not hard to do well, that simple is plenty good.

Second, no one is proven to reliably predict the future better than the sum of everyone's ideas that end up as the market price. So the cap weighted total market is the sum of everyone's knowledge.

As soon as you start back-testing, slicing and dicing you are falling into the trap you are trying to teach them to avoid. There will always be a better portfolio than the total market, but it is never knowable to say which one. Total market is also very low fee, and rarely has a capital gain to be taxed.

Well said. And thank you

 

[DrRoy]

what are differences in VTI vs VTSAX?

Looks like you got your answer.

 

[Time2]

Just backtested a portfolio of SPY, QQQ, and IWM vs just VTSAX....

the former actually did do a little better:
5 year return 10.4% CAGR vs 9.9%
10 year return 13.5% CAGR vs 12.7%
15 year return 10.2% vs 9.1%

20 year return 11.45% vs 10.3%

not by much, but still
not sure what I want to do

My handy calculator* says if I invested $250k for 20 years, 10.3% vs 11.45%, the 11.45% will provide me an additional $409k or 23% over the 10.3%. But we all know "Past performance is no guarantee of future results"


*Compound Interest Calculator

 

[target2019]

I should have realized with 5 letters it was a mutual fund! Think I'm getting old

and yeah I think this will be perfect for them might want to do like 10% in an international stock ETF..any suggestions?

The account will be at Schwab and although VG customer service stinks they do have great ETFs!

Vanguard ETFs can be purchased and sold at Schwab with no fee.

My default recommendation is VTI - which is US stock.

My second choice is a large growth fund, like SCHG.

In a taxable account you would be concerned about dividends and capital gains being payed out.

Don't be confused by Vanguard or Schwab labels. In some cases the Schwab equivalent has a lower expense ratio.

 

[FREE866]

Vanguard ETFs can be purchased and sold at Schwab with no fee.

My default recommendation is VTI - which is US stock.

My second choice is a large growth fund, like SCHG.

In a taxable account you would be concerned about dividends and capital gains being payed out.

Don't be confused by Vanguard or Schwab labels. In some cases the Schwab equivalent has a lower expense ratio.

Very familiar with SCHG. Have owned that in my account for over a decade and it’s been fantastic. With my nieces I want to simplify and not have to think about rebalancing hence why I’m drawn to VTI.
Gonna do 90% VTI and 10% VXUS for international exposure. Unless you have another suggestion?

And yes all my accounts are at Schwab so aware of no fees. Thank you for your input. Much appreciated.

 

[target2019]

Very familiar with SCHG. Have owned that in my account for over a decade and it’s been fantastic. With my nieces I want to simplify and not have to think about rebalancing hence why I’m drawn to VTI.
Gonna do 90% VTI and 10% VXUS for international exposure. Unless you have another suggestion?

And yes all my accounts are at Schwab so aware of no fees. Thank you for your input. Much appreciated.

Simplify is the main goal? Buy one ETF for now.

I just gave that recommendation to daughter, but she split the wager anyways.