brianmanahan
Lifer
- Sep 2, 2006
- 24,546
- 5,958
- 136
Printer Bandit
Lifer
- Mar 16, 2005
- 13,856
- 109
- 106
- Feb 13, 2001
- 83,769
- 19
- 81
Printer Bandit
Lifer
- Mar 16, 2005
- 13,856
- 109
- 106
brianmanahan
Lifer
- Sep 2, 2006
- 24,546
- 5,958
- 136
I actually bought in at a higher level so I am in VTSAX now. .06% expense ratio
good man!
in taxable i buy VTSAX and VTIAX. and if you need to tax loss harvest you can switch with VLCAX and VFWAX.
got all my bonds in roth ira and 401k, no reason to have any bonds in taxable unless you have bookoo bucks. then you should get tax free muni index funds for your state, or i/ee bonds.
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brianmanahan
Lifer
- Sep 2, 2006
- 24,546
- 5,958
- 136
yep it is. plus you definitely want to diversify into non-home-country, which VDMIX is as a EAFE index fund. it doesnt include emerging markets (or canada) though like VGTSX/VTIAX do, which is why i go with those. but still not a bad buy.
and lol alky, losing money majorly this year? it's up almost %8 ytd. with a pe of ~10 its more value aligned than the US markets.
in the short term it doesnt matter what markets are doing anyway. you cant predict it anyway. just come up with a target asset allocation + how to change that AA over time, and stick with it through thick and thin. if you try to outsmart the market you will almost certainly do worse than if you just ride the storms.
- Feb 13, 2001
- 83,769
- 19
- 81
Yeah, but only when it has proven itself a major force in the past...this fund <> to that.
- Feb 13, 2001
- 83,769
- 19
- 81
Maybe vanguard isn't showing it right to me then...showed up as -14% after tax and not much better prior. Maybe they are weighing my current investments to it.
brianmanahan
Lifer
- Sep 2, 2006
- 24,546
- 5,958
- 136
brianmanahan
Lifer
- Sep 2, 2006
- 24,546
- 5,958
- 136
brianmanahan
Lifer
- Sep 2, 2006
- 24,546
- 5,958
- 136
ah yeah, would all depend on when you bought. i always buy like jan 1st so ytd is pretty indicative, but not if you bought midyear.
and its definitely down from a few years ago, but generally when everyone is afraid its the best time to buy.
- Feb 13, 2001
- 83,769
- 19
- 81
I agree with your double-quote Japan is fucked right now. I have to deal with that country monthly and the exchange rate is so freaking sad compared to the past.
It's like I am paying $5 for every $1 now. This is amplified by our own crappy economy.
Still I pay because I can leverage both the Japanese Pension Plan and our Social Security plus a pretty nice whole life policy my wife bought at 18. I agree if she managed that money from the start she'd have a lot more to show for it, but she will retire in 10-15 years so it's too late to lose.
Japan is fucked right now. I have to deal with that country monthly and the exchange rate is so freaking sad compared to the past.It's like I am paying $5 for every $1 now. This is amplified by our own crappy economy.
Still I pay because I can leverage both the Japanese Pension Plan and our Social Security plus a pretty nice whole life policy my wife bought at 18. I agree if she managed that money from the start she'd have a lot more to show for it, but she will retire in 10-15 years so it's too late to lose.
- Feb 13, 2001
- 83,769
- 19
- 81
I am going to look into it. I am at the point now where I have enough capital above my Admiral share minimums to play with some money.
brianmanahan
Lifer
- Sep 2, 2006
- 24,546
- 5,958
- 136
yeah admirals are awesome with the sweet ERs... so glad Vanguard dropped the req'd investment from 50$k to 10$k on most of them. i think the only ones that are still high amounts are the active managed funds which i dont care about anyway.
Please just remember how this low cost, broad market index will (inevitably) achieve it's outperformance over the vast majority of actively managed funds (think time horizon in decades, not years):
- it is almost 100% stocks all the time (most mutual funds may have something like 5 - 10% cash position to cover redemptions and as dry power), and something like 92% of long-term perfomance can be explained (correlated) with strategic asset allocation stocks >> bonds > cash
- active money manager has expense ratio to overcome, plus hidden portfolio trading costs. This can easily add up to 2 - 3% or more headwind in terms of average annual return. Actively managed fund that has big winner among it's top holdings can easily beat index over say 1, 3, 5, or possibly even 10 year periods, but that inevitable headwind means fewer and fewer funds will be able to beat the market by 3% a year as time passes. Sure there will be some fund that absolutely destroys index and most other funds, but that is not just skill, there is an element of luck in terms of having great winner in large position stock or avoiding really nasty loss despite best due diligence.
- there will be times, because of the index's broad diversification, where index fund will be badly, badly beaten by most actively managed funds (because they are more concentrated in winning sector or particular stocks). Doesn't mean index investing, or buy and hold investing in quality mutual funds, is dead, just that you have to step back and look at things from appropriate time frame.
Plus, if this is the equivalent of beginning of 1970s for stock market, hopefully you can feel comfortable buying VTSAX even in bleakest of times if your time horizon is decades off. There will be a bull market some time in future (e. g. http://news.morningstar.com/article..._LPAGE=/FORBIDDEN/CONTENTARCHIVED.HTML&_BPA=N) and you are just collecting shares of something you should have confidence in (USA) that is presumably of high quality and won't go to zero, even if market is scary as heck at times.
Remember, as John Bogle likes to say, Stay The Course, Stay The Course.
- it is almost 100% stocks all the time (most mutual funds may have something like 5 - 10% cash position to cover redemptions and as dry power), and something like 92% of long-term perfomance can be explained (correlated) with strategic asset allocation stocks >> bonds > cash
- active money manager has expense ratio to overcome, plus hidden portfolio trading costs. This can easily add up to 2 - 3% or more headwind in terms of average annual return. Actively managed fund that has big winner among it's top holdings can easily beat index over say 1, 3, 5, or possibly even 10 year periods, but that inevitable headwind means fewer and fewer funds will be able to beat the market by 3% a year as time passes. Sure there will be some fund that absolutely destroys index and most other funds, but that is not just skill, there is an element of luck in terms of having great winner in large position stock or avoiding really nasty loss despite best due diligence.
- there will be times, because of the index's broad diversification, where index fund will be badly, badly beaten by most actively managed funds (because they are more concentrated in winning sector or particular stocks). Doesn't mean index investing, or buy and hold investing in quality mutual funds, is dead, just that you have to step back and look at things from appropriate time frame.
Plus, if this is the equivalent of beginning of 1970s for stock market, hopefully you can feel comfortable buying VTSAX even in bleakest of times if your time horizon is decades off. There will be a bull market some time in future (e. g. http://news.morningstar.com/article..._LPAGE=/FORBIDDEN/CONTENTARCHIVED.HTML&_BPA=N) and you are just collecting shares of something you should have confidence in (USA) that is presumably of high quality and won't go to zero, even if market is scary as heck at times.
Remember, as John Bogle likes to say, Stay The Course, Stay The Course.
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A noob needing a crash course/cliff notes/for dummies version, is VTSMX still the best option for a "set it and forget it" approach?
Thanks
Thanks
Yes. You might want to also combine it with VGTSX for international exposure. Note that Vanguard recently lowered the threshold on their admiral shares (lower ER) to $10k, and those have different ticker symbols, even though they are the same funds.
Also for all investment questions, particularly those related to vanguard:
http://www.bogleheads.org/forum/index.php
Also lots of good info in their wiki:
http://www.bogleheads.org/wiki/Main_Page
overst33r
Diamond Member
- Oct 3, 2004
- 5,761
- 12
- 81
Don't forget your bonds. You basically want a 3 fund portfolio. VTSMX, VGTSX, VBMFX.
If you don't want to worry about rebalancing, pick a Target Retirement Fund or LifeStrategy Fund, set it and forget it.
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