Author Topic: Schwab Investing Advice  (Read 543 times)

redwood_canyon

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Schwab Investing Advice
« on: January 22, 2019, 05:44:26 PM »
I have a $500 gift from my grandmother to invest.

Currently my Schwab holdings are as follows:

SWTSX 31.17%

SWHFX 16.77%

SWSSX 12.32%

And (AT&T) T 25.72%

Do you have any recommendations of stocks or mutual funds I should invest in on Schwab?

(I only included the list to state what I already have)

ILikeDividends

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Re: Schwab Investing Advice
« Reply #1 on: January 22, 2019, 06:43:28 PM »

SWTSX

SWSSX

Do you have any recommendations of stocks or mutual funds I should invest in on Schwab?

Just an observation, not necessarily a recommendation.

SWTSX is a total stock market fund.  SWSSX is a small cap fund.  There might be some overlap there that over weights your small cap exposure more than you intend to with your AA.  Possibly look into replacing SWTSX with a large cap fund like SCHX, so that you can specifically control your AA exposure to small caps accordingly?

Also, you have no international exposure; which is fine, if that is your intention.  If you want to change that, you can look into SCHE for emerging markets, and SCHF for developed markets ex-US.

And, of course, if you do want to change things around, possible tax ramifications apply based on whether you hold these in taxable accounts or not.
« Last Edit: January 22, 2019, 06:53:31 PM by ILikeDividends »

Radagast

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Re: Schwab Investing Advice
« Reply #2 on: January 22, 2019, 08:06:57 PM »
Hello Redwood, I use Schwab myself as my employer keeps my retirement plan there.

My biggest concern is AT&T. It is a huge, undiversified, risky, and unnecessary part of your portfolio. I recall you said that this is in a tax sheltered account in another thread I'll respond too as well. So sell away. AT&T was bought by Cingular in the recent past before switching to the better known AT&T name, which to me indicates something about how likely this is to be the best choice over the next 50 years. Specifically, not very. Most stocks underperform cash, with only a few hitting it out of the park to account for all the gains. Your odds of choosing one that equals or exceeds the market are slim and not predictable by you. Ditch T ASAP. Otherwise you may as well head a few blocks south walk in Circus Circus and gamble your way through the Eldorado.

Similar for health care. This has been doing super great for a long time. However, all it takes is a tiny shift in the political winds to send it to the bottom. Personally I view health care stocks as something that I profoundly wish would crater, never again to exceed population growth plus inflation plus a money market fund plus volatility plus potential innovation. I am voting against you.

SWTSX and SWSSX are fine. I don't see the total market fund overlapping with the small fund as being critical, but Schwab also ofers an S&P500 fund for 0.02% and a very cheap Russel 2000 fund if that concerns you. Schwab's only international mutual fund is a large cap developed market fund, or your choice of the "fundamental" SFENX (emerging markets) and SFILX (small developed country companies) which are more expensive. I am OK with them, but many or most people would disagree.

The other choice is ETFs. If you aren't interacting with your account often anyhow then ETFs are just as good, just be sure to set dividends to reinvest. Schwab has loads of ETFs.

At this stage, asset allocation doesn't matter much beyond be in stocks, be diversified, and keep costs reasonably low. But, splitting the ticker symbols mentioned above equally would be an OK start. Realistically, even just SWTSX or SWSSX would be forseeably as good for your situation.

redwood_canyon

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Re: Schwab Investing Advice
« Reply #3 on: January 23, 2019, 09:49:37 AM »
Hello Redwood, I use Schwab myself as my employer keeps my retirement plan there.

My biggest concern is AT&T. It is a huge, undiversified, risky, and unnecessary part of your portfolio. I recall you said that this is in a tax sheltered account in another thread I'll respond too as well. So sell away. AT&T was bought by Cingular in the recent past before switching to the better known AT&T name, which to me indicates something about how likely this is to be the best choice over the next 50 years. Specifically, not very. Most stocks underperform cash, with only a few hitting it out of the park to account for all the gains. Your odds of choosing one that equals or exceeds the market are slim and not predictable by you. Ditch T ASAP. Otherwise you may as well head a few blocks south walk in Circus Circus and gamble your way through the Eldorado.

Similar for health care. This has been doing super great for a long time. However, all it takes is a tiny shift in the political winds to send it to the bottom. Personally I view health care stocks as something that I profoundly wish would crater, never again to exceed population growth plus inflation plus a money market fund plus volatility plus potential innovation. I am voting against you.

SWTSX and SWSSX are fine. I don't see the total market fund overlapping with the small fund as being critical, but Schwab also ofers an S&P500 fund for 0.02% and a very cheap Russel 2000 fund if that concerns you. Schwab's only international mutual fund is a large cap developed market fund, or your choice of the "fundamental" SFENX (emerging markets) and SFILX (small developed country companies) which are more expensive. I am OK with them, but many or most people would disagree.

The other choice is ETFs. If you aren't interacting with your account often anyhow then ETFs are just as good, just be sure to set dividends to reinvest. Schwab has loads of ETFs.

At this stage, asset allocation doesn't matter much beyond be in stocks, be diversified, and keep costs reasonably low. But, splitting the ticker symbols mentioned above equally would be an OK start. Realistically, even just SWTSX or SWSSX would be forseeably as good for your situation.

I have to agree T is pretty risky. The reason I have it is my grandmother Suggested it since she has a good portfolio of "Utilities" and does quite well on the dividends. I did put a lot in there and will probably switch it over to one of the indexes when it recovers a bit. (Rn I would be down about $50, but that may be worth it since the mutual funds are on discount as well.) I am never going to gamble in my life, I've read many books about financial advice a favorite being The Millionaire Next Door. At the end of the day gambling is called a POOR MAN'S TAX for a reason, its quite sad really. I once decided to read some yelp reviews of a local casino in the bay. And the reviews were: "We lost about $2000 but had a fun time" (excuse me what kind of fun is that) "The first time we came I won $500" (I noticed they never say how much they spent to win that, my guess several times that amount). Sorry for rambling, but it really is quite depressing, just to think how much better off they would be investing or even just saving that. Another thing that gets me is tax refunds or rebates, people act as if its a windfall and buy all sorts of useless stuff. They don't realize that its just the government giving back some of their hard earned money because they took too much.

I did take your advice and put some in the SWPPX. I just love all the low cost SW indexes, and the fact that there are no trading fees or anything. Especially with how little I have to invest even a $5 trade fee is a large amount to lose.

I am not sure about investing overseas, I have not done enough research in that regard, but if you wouldn't mind sending a private message to me with your reasoning, that would be great.

Rob_bob

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Re: Schwab Investing Advice
« Reply #4 on: January 23, 2019, 10:42:10 AM »
I too would recommend reducing the position in T.  Don't wait for it to recover a bit because it's gains, if it has any, will likely be lower, maybe, than the funds you would move the money into.  Sell then immediately buy, you are just moving money "sideways", your account balance won't change, minus any commissions.

BTW I do own some T myself but waaaaaaaaaaaaaaaay less than you  :)

appleshampooid

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Re: Schwab Investing Advice
« Reply #5 on: January 23, 2019, 11:35:22 AM »
The upshot of being down $50 right now, is that you can get out without any tax consequences. I'd take advantage of that!

Laserjet3051

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Re: Schwab Investing Advice
« Reply #6 on: January 23, 2019, 12:08:29 PM »
SCHF.

redwood_canyon

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Re: Schwab Investing Advice
« Reply #7 on: January 23, 2019, 01:55:16 PM »
I too would recommend reducing the position in T.  Don't wait for it to recover a bit because it's gains, if it has any, will likely be lower, maybe, than the funds you would move the money into.  Sell then immediately buy, you are just moving money "sideways", your account balance won't change, minus any commissions.

BTW I do own some T myself but waaaaaaaaaaaaaaaay less than you  :)

I should have put in the dollar amount. As 25% of my account with holding T is equal to ~$980. I may keep it and just not add any more money to it. Still I should probably ditch it, the only reason to have it are for the dividends, which are I admit pretty solid, but it does have quite a bad rating overall.