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No poo poo! I didn’t know they were the exact same thing of course it makes sense, especially knowing their weird price calculations.
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Jun 4, 2021 01:45
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Thoughts on emerging market ETFs? VWO in particular? To add something extra high risk/high reward to my portfolio. Expense ration on the higher side, .10, though.
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Jun 4, 2021 05:05
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Ramrod Hotshot posted:Expense ration on the higher side, .10, though.
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Jun 4, 2021 05:26
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Also yes, that's fine if you want a riskier tilt.
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Jun 4, 2021 05:27
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moana posted:Also yes, that's fine if you want a riskier tilt. Thanks. I have to reinvest my HSA since I changed it to a new account. So I thought I might try some new ETFs (VWO would only be like a quarter of it). That being said, is there any reason to invest in an HSA differently than any other retirement account? My health insurance is decent right now and I'm healthy, so I feel a little more like throwing caution to the wind with the HSA money.
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Jun 4, 2021 05:45
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If your timeline is long, then it makes sense to go aggro in your roth and hsa. That growth won't be taxed on withdrawal if you do it right, but the 401k/trad IRA will.
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Jun 4, 2021 05:49
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MockingQuantum posted:So while I was pondering adding a bond fund to my taxable investments, I realized my taxable stock funds were all VFIAX and not VTSAX like I thought. So two questions: I didn't see an answer to this so if you still need confirmation your plan is what I would do. It's not worth paying taxes on capital gains to switch and you want to switch faster you can buy the extended market.
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Jun 4, 2021 07:02
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Calculate how much of your VFIAX position is gain. If it's not much, you can just exchange and pay tax. Currently the S&P 500 is ~68% of the domestic public market, and buying VEXAX worth about 46% of a VFIAX position would approximate the mix of the whole market. Then you can buy VTSAX going forward. But then you have three funds to keep track of rather than two. Gazpacho fucked around with this message at 17:03 on Jun 4, 2021 |
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Jun 4, 2021 07:41
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Gazpacho posted:Calculate how much of your VFIAX position is gain. If it's not much, you can just exchange and pay tax. Where did you get this ratio? According to the Bogleheads wiki it's about 80/20 VFIAX to VEXAX: https://www.bogleheads.org/wiki/Approximating_total_stock_market Edit: the Edelman Financial Engines thingy in my 401k portal is recommending 64/36 which is closer to the ratio you provided too, but that may be an intentional tilt towards smaller cap. SamDabbers fucked around with this message at 18:00 on Jun 4, 2021 |
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Jun 4, 2021 17:42
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As of 3/31, total S&P 500 market cap was ~$33T and total US public market cap was ~$49T, for a ratio of 67.3%. From that I calculate the balancing ratio of extended market to S&P500 as (1–0.673)/0.673 = 48%. Do you see anything wrong? e: I guess the unknown here is the representation of the S&P500 in VTSAX, rather than in the whole market. If they're very different, then I have some spreadsheets to update. Gazpacho fucked around with this message at 18:27 on Jun 4, 2021 |
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Jun 4, 2021 18:12
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So my parents informed me I have a bunch of Series EE Bonds maturing around October, coming out to roughly $11K. Apparently when my brother and I were babies they took any cash gifts from family and bought bonds set in our names. I am planning on cashing them once they mature and using them to cover my 2022 Roth IRA contributions and the rest probably in an ETF or add it to a HYSE I have set to squirrel money away towards a down payment on a house whenever prices come back to an affordable level. My question is, how are these taxed? Is the amount cashed added to my total income (i.e. if I made $50K then I would report $66K)? Or is the $11K taxed as income but separately at a lower tax bracket than my job income? Or do I only report the interest and not the total bonds worth? The past complexity of my taxes at most has been needing to include two W-2s so I'm really new to all this.
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Jun 4, 2021 18:52
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The earnings (not the purchase amount) are reportable on Schedule B as interest and taxed as ordinary income, but exempt from state income tax. Details You can use this form to verify the maturity date of a paper savings bond. Don't rely on a bank to tell you. Years ago I took savings bonds to a bank only to find out the maturity date and the bank teller presumptively cashed them. Gazpacho fucked around with this message at 19:30 on Jun 4, 2021 |
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Jun 4, 2021 19:25
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I know it's already been answered in this thread that Vanguard admiral shares are a mutual fund that have an identical ETF version (i.e. VTIAX and VXUS) but since the admiral shares has a slightly higher expense ratio, a minimum investment and fee, why would you choose that over the ETF? This would not be for a tax-advantaged space, if that makes a difference.
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Jun 4, 2021 20:46
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Mutual funds allow you to buy in arbitrary quantities and trade at the nav price where there isn't a bid/ask spread. These are some nice features, and the ER additional cost is low enough that I still purchase mutual funds over ETFs for VTSAX and VTIAX.
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Jun 4, 2021 20:57
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Also, many 401(k)s and other employer-sponsored retirement accounts etc. only give you access to a select set of mutual funds (and not to ETFs).
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Jun 4, 2021 21:05
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drainpipe posted:Mutual funds allow you to buy in arbitrary quantities and trade at the nav price where there isn't a bid/ask spread. These are some nice features, and the ER additional cost is low enough that I still purchase mutual funds over ETFs for VTSAX and VTIAX. Arbitrary quantities? As in fractions of a share or something? Can the difference between nav price and bid/ask spread really make that much of a difference when trading ETFs?
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Jun 4, 2021 21:20
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Yes, fractions of a share. When I buy VTSAX in my 401(k) I buy exact dollar amounts, regardless of the current NAV price; Vanguard is happy to let me hold a tenth of a share or whatever. Yes, bid/ask spread can matter, although VTI is one of the most actively traded ETFs so its bid/ask is pretty much always very very narrow. This is not necessarily the case all the time for less popular ETFs.
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Jun 4, 2021 21:25
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Fractional shares also simplify reinvestment of dividends. Some brokerages now allow for fractional shares of ETFs (although Vanguard doesn't to my knowledge), so it's less an issue. All of these issues are typically very small, but so is the 1-3 bps difference in ER, and I just like the ease of mutual funds since they're a little easier to transact.
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Jun 4, 2021 21:30
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Heated Gaming Moment posted:I do not have a Roth, just the 401K. Should I be opening a Roth and then put any mutual fund I want to invest in into that? Yes, that's what most of us would say to do. Order of operations from the first post is a really good rule of thumb quote:
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Jun 4, 2021 21:42
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drainpipe posted:Fractional shares also simplify reinvestment of dividends. Some brokerages now allow for fractional shares of ETFs (although Vanguard doesn't to my knowledge), so it's less an issue. Pretty much every brokerage, including Vanguard, allows fractional shares when they are dividend reinvestments since forever. You just can't submit new buy orders in fractional shares, at Vanguard. Some brokerages you can. The difference between equivalent high-volume MFs and ETFs are so vanishingly small it's not even worth thinking about. Just pick whichever one you like more for whatever reason.
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Jun 4, 2021 22:41
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so i bought some FXAIX and was waiting for it to settle to let me buy shares... but its already end of day and they haven't resolved? i bought it at like 1AM today... did i miss the window or something?
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Jun 5, 2021 00:11
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Strong Sauce posted:so i bought some FXAIX and was waiting for it to settle to let me buy shares... but its already end of day and they haven't resolved? i bought it at like 1AM today... did i miss the window or something? It's a mutual fund. The NAV probably wasn't available until sometime after 5:00 PM at least (been a ling time since I worked for that mutual funds accounting firm, but the NYSE closes at 4 and there's a lot of work to do after that) and may not even be available yet. I don't see a price for today on google. Whatever todays price is, you will get your shares at it and probably on Monday.
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Jun 5, 2021 00:17
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Yeah, whenever I buy Vanguard funds they don't actually appear in my account for a day or two.
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Jun 5, 2021 00:17
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I'm not going to crunch the whole portfolio list, but based on a quick sample it does appear that VTSAX tilts more toward the S&P 500 than the US public market as a whole, with a ratio somewhere around 80%.
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Jun 5, 2021 03:53
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Gazpacho posted:I'm not going to crunch the whole portfolio list, but based on a quick sample it does appear that VTSAX tilts more toward the S&P 500 than the US public market as a whole, with a ratio somewhere around 80%. if you wanna do easy math on this, just look at the official index data: S&P 500: https://www.spglobal.com/spdji/en/indices/equity/sp-500/#data quote:Characteristics S&P 500 completion index (everything else in the US): https://www.spglobal.com/spdji/en/indices/equity/sp-completion-index-ci/#data quote:Characteristics
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Jun 5, 2021 14:10
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Well, after saying I wasn't going to, I've recently pulled the trigger on adding small-cap value by picking up some Avantis funds (AVUV+AVDV). It's only a small amount (15% of my equities). I'm planning to follow one of Paul Merriman's strategies where you do not rebalance between SCV and the rest of your equities (https://paulmerriman.com/the-ultimate-target-date-fund-portfolio/). I assume this is to get more of the upside of the higher projected returns of SCV as you won't be rebalancing out. The 15% is also small enough that I don't feel like this is a huge bet, and if the value premium never comes back, it wouldn't affect my overall performance much, especially since I won't be rebalancing in. Anyone else hop aboard the SCV train?
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Jun 5, 2021 14:31
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quote:3) Max out 401(k) ($18,000 limit for 2015) Is there ever any way to contribute the max to your 401k in a lump sum? Right now I'm contributing like $1k a paycheck to it, with the idea that my expenses will exceed my income but I'm drawing down savings I have into the 401k. But this is for obvious reasons tricky to plan for and that money sitting in savings waiting to be put into the 401k could be invested instead.
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Jun 5, 2021 15:57
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Ramrod Hotshot posted:Is there ever any way to contribute the max to your 401k in a lump sum? Right now I'm contributing like $1k a paycheck to it, with the idea that my expenses will exceed my income but I'm drawing down savings I have into the 401k. But this is for obvious reasons tricky to plan for and that money sitting in savings waiting to be put into the 401k could be invested instead. Sort of, usually you can tell work to contribute 100% of your paycheck, and it will do so and automatically stop for the year when you hit the limit.
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Jun 5, 2021 16:09
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I get a string of $0 net paychecks at the beginning of the year to max out my 401k and espp. With adequate savings you can float yourself, but I wouldn't draw from your "lose your job" efund of 3-6 months, I would extend it out to 9 months then draw the top 3 to float you along.
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Jun 5, 2021 16:16
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runawayturtles posted:Sort of, usually you can tell work to contribute 100% of your paycheck, and it will do so and automatically stop for the year when you hit the limit. And whether you can go all the way to 100% or not depends on the plan/plan administrator. Last place I was at would only allow 85% max. Also, if you're doing this you need to be careful about match and how match is calculated. In some plans people have mentioned you won't get all of the matching when it's done this way.
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Jun 5, 2021 16:16
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Motronic posted:And whether you can go all the way to 100% or not depends on the plan/plan administrator. Last place I was at would only allow 85% max. Right. I mean, it seems possible to do the math of how much $ per paycheck for how many paychecks until I'm close to 19.5k, then turn it down to just get the (pathetically low) match. And then try to come in at about 19k at the end of the year just as a buffer if my math is wrong by a bit.
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Jun 5, 2021 16:24
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Ramrod Hotshot posted:Right. I mean, it seems possible to do the math of how much $ per paycheck for how many paychecks until I'm close to 19.5k, then turn it down to just get the (pathetically low) match. And then try to come in at about 19k at the end of the year just as a buffer if my math is wrong by a bit. Check with HR but some places will automatically cut off and prevent you from overcontributing (trickier if you've contributed to a separate 401k also during that same year but possible) so you don't have to worry about this and can target slightly high.
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Jun 5, 2021 16:26
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Ramrod Hotshot posted:Is there ever any way to contribute the max to your 401k in a lump sum? Right now I'm contributing like $1k a paycheck to it, with the idea that my expenses will exceed my income but I'm drawing down savings I have into the 401k. But this is for obvious reasons tricky to plan for and that money sitting in savings waiting to be put into the 401k could be invested instead. While you can't just contribute cash directly to your 401(k), there is at least one
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Jun 5, 2021 16:30
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drainpipe posted:Anyone else hop aboard the SCV train? Personally, I have my Roth 401k all in VSIAX (Vanguard's small cap value fund), but it's a small percentage of the overall portfolio so not much of a tilt.
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Jun 5, 2021 16:32
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drainpipe posted:Anyone else hop aboard the SCV train? I would if there was a way I could that didn't complicate my current "buy one fund using Canadian dollars" implementation. Though I'm probably making it harder on myself because the second I decide to complicate things, I'ma complicate everything. Not just factor tilts but using some cheaper funds that are domiciled in the USA, reducing foreign withholding taxes via funds in USA, almost-automatic threshold rebalancing. I feel like I go in spurts where I'm willing to complicate things, then lulls where I'd rather not. So I'm pretty sure that within, like, 10 years I'll have done these things one way or another, but I don't know when exactly.
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Jun 5, 2021 16:49
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Anyone in this thread a US citizen living abroad? I want to keep investing once I get back to Asia, I know I can contribute whatever to my brokerage account but is foreign income allowed in an IRA? I won't be making enough to have to pay any US taxes on it, though I have to file (and now that I have investments I'll be paying whatever on those I guess).
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Jun 5, 2021 17:49
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moana posted:Worth noting that retail investors can now use the DFA core funds as ETFs. All with small cap value tilts built in as well as their other factors like profitability. Haven't looked much into Avantis but I hear good things. Just curious: Any reason you’re doing Value vs Small cap or small cap growth ?
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Jun 5, 2021 19:52
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The last few years notwithstanding, I believe there is a value premium as well as a small cap premium. I'd say most people doing factor investing by this research do SCV if they are looking for long term returns.
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Jun 5, 2021 20:01
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drainpipe posted:Well, after saying I wasn't going to, I've recently pulled the trigger on adding small-cap value by picking up some Avantis funds (AVUV+AVDV). It's only a small amount (15% of my equities). I'm planning to follow one of Paul Merriman's strategies where you do not rebalance between SCV and the rest of your equities (https://paulmerriman.com/the-ultimate-target-date-fund-portfolio/). I assume this is to get more of the upside of the higher projected returns of SCV as you won't be rebalancing out. The 15% is also small enough that I don't feel like this is a huge bet, and if the value premium never comes back, it wouldn't affect my overall performance much, especially since I won't be rebalancing in. I had substantial DLS for International SV and a tiny bit of IJS for US SV (mostly due to lack of tax sheltered space). But during the pandemic lows, I went much more SV tilted in my portfolio and loaded up on AVUV and AVDV.
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Jun 5, 2021 20:05
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Ramrod Hotshot posted:Is there ever any way to contribute the max to your 401k in a lump sum? Right now I'm contributing like $1k a paycheck to it, with the idea that my expenses will exceed my income but I'm drawing down savings I have into the 401k. But this is for obvious reasons tricky to plan for and that money sitting in savings waiting to be put into the 401k could be invested instead. You just need to set your contribution to the max. but your employer might have some limits on it. While uncommon it's a cool idea assuming you have enough savings to do it and often referred to as 401k Front Loading. H110Hawk posted:I get a string of $0 net paychecks at the beginning of the year to max out my 401k and espp. With adequate savings you can float yourself, but I wouldn't draw from your "lose your job" efund of 3-6 months, I would extend it out to 9 months then draw the top 3 to float you along. Are you holding on to your ESPP Stocks? I need to look into this more but I get a slight discount if I do buy stocks from employer and I am thinking that if I just held them for the absolutely minimum amount of time needed to sell them I'd probably come out ahead? Assuming the companies value doesn't drop in the meanwhile... 
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Jun 5, 2021 20:11
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