Vanguard ROTH investments

[vvelouriaa]

Hope that I can get some insight from more experienced investors about my new Vanguard Roth investments and allocation. I have about 20k in cash that I知 going to DCA into high dividend index funds.

I won稚 be touching this money for 30 years, and have separate Schwab brokerage account. I知 ok with taking on more risk for the next 5-10 years.

Looking at investing 5000 into each of these stocks. They all seem to have pretty high dividend payouts. Any suggestions or recommendations for different stocks or approaches?

VTTSX - 2060 target fund (vtsax & vtiax +10% bonds)
VYM - high dividend stocks etf
VNQ - reit etf
VPU - utilities etf

Any help is appreciated!

[MDM]

Of those, I'll vote VTTSX.

No way to know what would have been best now until you can look back after 30 years. ;)

[MustacheAndaHalf]

A significant chunk of the U.S. stock market is technology companies, with often don't pay a dividend.  I would ask you to think carefully about avoiding technology stocks, and emphasizing utilities, which is an unusual choice.  I don't know if I've ever seen someone invest 25% in the utilities sector (VPU).

In my view, the target date fund and REIT ETF make the most sense.  REITs tend to have a lower correlation with the rest of the stock market, which helps with a more stable portfolio value (and maybe with rebalancing).

[vvelouriaa]

Of those, I'll vote VTTSX.

No way to know what would have been best now until you can look back after 30 years. ;)

Indeed, where is my crystal ball??!

A significant chunk of the U.S. stock market is technology companies, with often don't pay a dividend.  I would ask you to think carefully about avoiding technology stocks, and emphasizing utilities, which is an unusual choice.  I don't know if I've ever seen someone invest 25% in the utilities sector (VPU).

In my view, the target date fund and REIT ETF make the most sense.  REITs tend to have a lower correlation with the rest of the stock market, which helps with a more stable portfolio value (and maybe with rebalancing).

Thanks for the input. Did a lil more research and discovered VTI has a much lower expense ratio than the target date fund... Thinking 50/50 between VTI and VNQ for a decent dividend and simplification.

[pdxvandal]

Vanguard advisors recommend investing in international funds in a Roth as that asset class is more tax-friendly as opposed to a traditional IRA or post-tax brokerage account.

[MustacheAndaHalf]

My intent was to get you reconsidering the others, but I guess you could also read my post as suggesting a 50/50 split that I didn't intend.  Have you considered 20% chunks instead?

60% VTI (Total U.S. Stock Market)
20% VNQ (U.S. REITs)
20% VXUS (Total International)

[caffeine]

Vanguard advisors recommend investing in international funds in a Roth as that asset class is more tax-friendly as opposed to a traditional IRA or post-tax brokerage account.

It's not immediately clear to me why a Roth IRA would be more tax advantageous than a Traditional IRA for International funds. Are you sure?

[MustacheAndaHalf]

Vanguard advisors recommend investing in international funds in a Roth as that asset class is more tax-friendly as opposed to a traditional IRA or post-tax brokerage account.

It's not immediately clear to me why a Roth IRA would be more tax advantageous than a Traditional IRA for International funds. Are you sure?

That would veer off topic, but OP could ask that in the "Taxes" area of the forum.

[RWD]

I知 going to DCA

https://jlcollinsnh.com/2014/11/12/stocks-part-xxvii-why-i-dont-like-dollar-cost-averaging/

into high dividend index funds.

https://jlcollinsnh.com/2011/12/27/dividend-growth-investing/

Any suggestions or recommendations for different stocks or approaches?

I personally have put all of my Roth IRA contributions in VGSLX (equivalent to VNQ) but that is because it fits in with the rest of my investment portfolio to match the asset allocation I have specified in my investment policy statement (10% REITs). You shouldn't be chasing dividends. For a long term strategy I think you should be looking most closely at VTSAX/VTI and VTIAX/VXUS.

[The_Big_H]

A big mistake in stock investing is chasing dividend. I think you壇 be better off just doing stock index and taking the 1.75-2% dividend of the average market

Also add some international.  Though note they tend to be more value in they have lower growth and high dividends than the USA.

If you really want to have yield. Go with some VWEHX which pays 4-6% higher end junk bonds.  They go up and down with stocks at about half pace and actually pays a % worth the trouble.

[MDM]

Vanguard advisors recommend investing in international funds in a Roth as that asset class is more tax-friendly as opposed to a traditional IRA or post-tax brokerage account.

It's not immediately clear to me why a Roth IRA would be more tax advantageous than a Traditional IRA for International funds. Are you sure?

That would veer off topic, but OP could ask that in the "Taxes" area of the forum.

Not sure how one would discuss Tax-efficient fund placement without discussing both taxes and investments. ;)

[BTDretire]

Vanguard advisors recommend investing in international funds in a Roth as that asset class is more tax-friendly as opposed to a traditional IRA or post-tax brokerage account.

It's not immediately clear to me why a Roth IRA would be more tax advantageous than a Traditional IRA for International funds. Are you sure?

That would veer off topic, but OP could ask that in the "Taxes" area of the forum.

Not sure how one would discuss Tax-efficient fund placement without discussing both taxes and investments. ;)

I would like to see an answer to that question, "why a Roth IRA would be more tax advantageous than a Traditional IRA for International funds."

[RWD]

Vanguard advisors recommend investing in international funds in a Roth as that asset class is more tax-friendly as opposed to a traditional IRA or post-tax brokerage account.

It's not immediately clear to me why a Roth IRA would be more tax advantageous than a Traditional IRA for International funds. Are you sure?

That would veer off topic, but OP could ask that in the "Taxes" area of the forum.

Not sure how one would discuss Tax-efficient fund placement without discussing both taxes and investments. ;)

I would like to see an answer to that question, "why a Roth IRA would be more tax advantageous than a Traditional IRA for International funds."

I'm pretty sure it isn't. There are some tax benefits for international funds in a taxable account though that gets messier once you need to file Form 1116.

[Buffaloski Boris]

I知 curious why dividend stocks given a 30 year investment horizon? Dividend stocks are often a proxy for value stocks which aren稚 a bad bet right now IMO. I知 just curious as to what the reason is?

If I知 the OP I知 skewing more towards international. I also think the target funds with an extended time horizon are a good bet overall. The US market is expensive and keeps you in the US dollar. Diversification FTW.  As most of the regulars here know, I知 not a fan of large cap cap weighted indexes such as most SP 500 funds or so called total US stock market funds.

[pdxvandal]

My Vanguard advisor said to keep international in Roth because there will be no foreign income tax and that even though it's more volatile it has reasonable long-term growth expectation. Basically, lots of upside to an account that will never be taxed later.  His words, not mine, but I tend to believe him. ;-)

[/quote]
 I would like to see an answer to that question, "why a Roth IRA would be more tax advantageous than a Traditional IRA for International funds."
[/quote]