ETFs

[JohnDoe]

Thinking of converting some of my mutual funds and cash to EFTs where I can. My portfolio is across several brokerages and account types of which some are limited to what I can buy (think 401k).

Looking into these 3 to help balance the rest of my portfolio.

IVV
IJH
IJR

Maybe 3 years out from ER with 1.4mm. I've been sitting on quite a bit of cash (27%) that I want to put to work. Thoughts?

[chassis]

What is your net worth goal amount in 3 years? This gives you the required rate of return your portfolio needs to deliver.

Evaluate the etfs you listed and decide if these can deliver your required portfolio return.

Those etfs look like garden variety index funds, so if your required portfolio return is in the mid-teens these holdings should be OK, acknowledging that you will be exposed to average market volatility in the mid-teens of standard deviation.

[kgtest]

One of the better strategies I executed was rolling over 401k to Vanguard Rollover IRA and unlocking all the solid investment options.

I put my AAPL stock (High risk) in the broker, MGK into the Roth (high growth), and the Mid and Small Cap ETFs in the IRA (value).

Think of the broker as the first of 3 stage rocket...you need that thing to dispense a lot of fuel, second stage not so much, and third is the IRA that is gonna be intermittently firing once 'in orbit'. FIRE Liftoff baby! I should change my ER handle.

[OverThinkMuch]

Quote:

Originally Posted by JohnDoe Looking into these 3 to help balance the rest of my portfolio. IVV IJH IJR

Why not buy iShares Total Stock Market (ITOT), which has all 3? It has mostly large cap, since companies like Apple and Tesla have far more weight in the stock market.

Are you planning to hold those 3 at the same weigh as the market, or do you plan to emphasize mid cap and small cap?

[JohnDoe]

Quote:

Originally Posted by OverThinkMuch Why not buy iShares Total Stock Market (ITOT), which has all 3? It has mostly large cap, since companies like Apple and Tesla have far more weight in the stock market. Are you planning to hold those 3 at the same weigh as the market, or do you plan to emphasize mid cap and small cap?

Was planning on something like this among the 3:

IVV 50%
IJH 25%
IJR 25%

I was not familiar with ITOT.

[38Chevy454]

For sure simplifying into one brokerage and reducing the number of various accounts is a good thing to do. I did that and rolled several old 401k/403b into my IRA, and consolidated at Fidelity as the broker holding it all. Makes life easier to see results and make investment decisions.
As for what to invest in, I agree total market is a good choice.

[Luvtoride]

Quote:

Originally Posted by kgtest One of the better strategies I executed was rolling over 401k to Vanguard Rollover IRA and unlocking all the solid investment options. I put my AAPL stock (High risk) in the broker, MGK into the Roth (high growth), and the Mid and Small Cap ETFs in the IRA (value). Think of the broker as the first of 3 stage rocket...you need that thing to dispense a lot of fuel, second stage not so much, and third is the IRA that is gonna be intermittently firing once 'in orbit'. FIRE Liftoff baby! I should change my ER handle.

KG, that is a cool way to describe your allocation strategy. And I just call mine buckets! LOL. As long as it works for you and you visualize it in that way, it sounds good. Your fuel ROCKET has been a great one! Let's hope it keeps firing!

[JohnDoe]

Quote:

Originally Posted by 38Chevy454 For sure simplifying into one brokerage and reducing the number of various accounts is a good thing to do. I did that and rolled several old 401k/403b into my IRA, and consolidated at Fidelity as the broker holding it all. Makes life easier to see results and make investment decisions. As for what to invest in, I agree total market is a good choice.

I have to keep my current 401k for now and probably later so I can make penalty free w/d's at 55.

I'm down to 2 brokerages now and I use morning star to manage the entire portfolio.

[OverThinkMuch]

Quote:

Originally Posted by JohnDoe Was planning on something like this among the 3: IVV 50% IJH 25% IJR 25% I was not familiar with ITOT.

It's the entire stock market. You should look into it - it's the simplest ETF with the lowest expense ratio. Your choices are good (0.03%, 0.05%, 0.06%), but lumping them all into one 0.03% expense ratio is even better.

ITOT is a total stock market fund, which owns over 3500 U.S. stocks. It does nothing when stocks make gains or losses. That means very low turnover, and very low costs. Instead of putting the pieces of the U.S. stock market together on your own, you can just buy the entire market in one ETF.

[JohnDoe]

Quote:

Originally Posted by OverThinkMuch It's the entire stock market. You should look into it - it's the simplest ETF with the lowest expense ratio. Your choices are good (0.03%, 0.05%, 0.06%), but lumping them all into one 0.03% expense ratio is even better. ITOT is a total stock market fund, which owns over 3500 U.S. stocks. It does nothing when stocks make gains or losses. That means very low turnover, and very low costs. Instead of putting the pieces of the U.S. stock market together on your own, you can just buy the entire market in one ETF.

Thanks for the additional explanation.

Looks like ITOT beats IVV/IJR/IJH 50/25/25 split over the last 5 years by 10% with 2021 being the only year single year it didn't.

[JohnDoe]

Made my first purchase in ITOT. Was waiting for a nice dip to start cost averaging in.