Author Topic: 100% in VTI?  (Read 24668 times)

scottyent

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100% in VTI?
« on: February 13, 2017, 10:15:02 AM »
Hey all,

I'm coming up on the end of 1.5 years of free Betterment and I'm about to sell it all and transfer everything over to Vanguard. I have been looking at three fund investing and lazy portfolio's, but this article on Go Curry Cracker caught my eye:

http://www.gocurrycracker.com/path-100-equities/

The message of just put it all in stocks is interesting (and simple) and seems like it has a good chance of great success (90%). First question is, what do people think of a strategy like that?

Second question, assuming I take on that strategy, is the recommendation to just put 100% of money in this ETF?:

https://personal.vanguard.com/us/funds/snapshot?FundIntExt=INT&FundId=0970

I want to make sure I have a low expense ratio and I'm willing to be risky for awhile (I'm young). I have about 20k of taxable income to invest.

Any advice would be greatly appreciated!

Retire-Canada

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Re: 100% in VTI?
« Reply #1 on: February 13, 2017, 10:29:02 AM »
I am 100% stocks, but I'm invested in 4 different ETFs:

- US stocks = 50%
- CDN stocks = 30%
- Int'l Developed stocks = 10%
- Int'l Emerging stocks = 10%

Personally I wouldn't want to be 100% invested in US stocks. Seems poorly diversified to me.

I'm still in accumulation mode so I have no plans to withdraw any money soon and I can ride out any crash that comes my way while adding new money. As I get to FIRE I will transition to some bonds to get me through the sequence of returns risk phase of early FIRE.

scottyent

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Re: 100% in VTI?
« Reply #2 on: February 13, 2017, 10:35:02 AM »
Thanks for the advice! I completely agree that 100% in US is pretty poor for allocation. I'm particularly wary of the next couple of years, even though I know somehow it could end up alright - I do suspect we'll hit some very rough times. However I am also prepared to ride it out!

I am thinking maybe I'll do 60% in VTI and the other 40% in VSUX:

https://personal.vanguard.com/us/funds/snapshot?FundId=3369&FundIntExt=INT

That would put 40% in international stocks and only make it two funds which makes it easy to manage.

What do you think?

Aggie1999

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Re: 100% in VTI?
« Reply #3 on: February 13, 2017, 10:35:57 AM »
I'm 60% VTSAX, 40% VTIAX. No bonds. From my limited knowledge I buy into that article you posted for early retirees or those with retirement far off. IMO only reason to have a decent chunk in bonds is if you are old and near retirement or old and retired and expect to live off some of your capital, not just your investment gains.

As for the split between US and International, I went with what Vanguard recommends (60/40 split) in their life strategy funds. Figure they know better than me.

Retire-Canada

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Re: 100% in VTI?
« Reply #4 on: February 13, 2017, 10:37:52 AM »
Thanks for the advice! I completely agree that 100% in US is pretty poor for allocation. I'm particularly wary of the next couple of years, even though I know somehow it could end up alright - I do suspect we'll hit some very rough times. However I am also prepared to ride it out!

I am thinking maybe I'll do 60% in VTI and the other 40% in VSUX:

https://personal.vanguard.com/us/funds/snapshot?FundId=3369&FundIntExt=INT

That would put 40% in international stocks and only make it two funds which makes it easy to manage.

What do you think?

I didn't look at the specific funds you are proposing, but 60% US and 40% International seems reasonable to me. Two funds are easy to manage.

frugledoc

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Re: 100% in VTI?
« Reply #5 on: February 13, 2017, 01:39:27 PM »
One fund is easier, I like vanguard all world

scottyent

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Re: 100% in VTI?
« Reply #6 on: February 13, 2017, 02:35:47 PM »
Hmmm, looks like the all world has a fee of .14% in the ETF - one thing that's very appealing to me about VTI is the .05% cost (one of the reasons I want to leave Betterment). Doing 60% of that then 40% of the .15% fee VSUX would average the fee down to just under .10% which would have an effect in the long run. Though it's definitely easier to manage one - I'll have to mull this over!

Highbeam

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Re: 100% in VTI?
« Reply #7 on: February 13, 2017, 04:01:46 PM »
I'm all VTSAX. The argument often heard is that US stocks have significant international exposure.

Heckler

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Re: 100% in VTI?
« Reply #8 on: February 13, 2017, 04:14:51 PM »
With (apologies) only $20k and a long time horizon (15+ years) to need to sell it, I'd go all into VTI, knowing that when it drops 50% you will buy more.

With $200k, I would strongly advocate global diversification including a good helping of fixed income.

aschmidt2930

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Re: 100% in VTI?
« Reply #9 on: February 13, 2017, 04:32:44 PM »
Going 100% equities is reasonable, especially since you're young.

But going 100% US equities? I'd advise against that. You'll want to diversify internationally.  How much is a pretty debated topic.

Consider putting some in VEIEX, if you're comfortable with volatility.  When looking at world demographics, one can reasonably believe this fund will be sitting much higher in 20 years.

AZryan

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Re: 100% in VTI?
« Reply #10 on: February 13, 2017, 05:42:58 PM »
As many have already noted in other threads over the years, investing only in the US, diversifies you in thousands and thousands of different companies in every sort of business there is, and a very large amount of that business is in global sales (in many cases global is 100% where their growth is).

To say the US is 'poor diversification' is way too simple. Even to say 'you need some global/international' is fairly misguided.

W Buffet and I believe J Bogle are among those who feel investing only in the US is not a terrible or problematic idea, so there's those guys.

The 'typical' suggested amount you should be invested in international funds has usually been considered ~10-25%. Since world markets mostly all flow together, and that's not a large percent, it means doing it or not will probably not end up making much of any difference at all for most people either way.
There are people here who do ~60/40 US/Int. and I think that's way too much International. It's certainly done much worse than US only for the past 20 years and 'still worse, but closer' over a much longer term. I see little chance of any future benefit.

If you do US and Int., I recommend you don't do an 'all-world' fund. Better to separate the two so you can rebalance or spend from whichever you like, etc. More options for you.

'International' is largely 'Europe', and my personal opinion is that Europe has a lot more inherent problems than the US has -with no solutions in sight. They also are better at income inequality and how they treat their workers. SADLY, this probably gives American business an edge by being generally more ruthless and profit-at-all-costs.

The P/E ratios look like Europe's a lot better deal now than the US, but Europe's sucked for a long time, and Greece/Spain default risks, EU problems, Brexit, rise of various right-wing extreme nationalists, more terrorist attacks, direct pathway of refugees flooding in from Middle-East and Africa. There's a lot more damage over there.

Some whine about and fear that same thing in the US, but those people are nuts and have no perspective or knowledge of the facts. We have worlds less to worry about from 'harmful immigrants' and FAR more to gain from 'friendly' ones (if we still let anymore in).

I don't see the need to be in Europe going forward. Japan (another big chunk of Int. Index) has been in a world of hurt, their population is aging badly with a society that isn't welcoming to immigrants. It's costing them. They really need to make those robots as fast as they can.

America's the greatest country on Earth because it's got two giant ocean borders and is a huge piece of really good land. No one else has that. And we still have tons of empty space, while most other major countries are packed to the gills -the exceptions of Canada and Australia kinda prove the rule  of where times are toughest IMO

Personally, I prefer balancing the Midcap Index with Total US market (or 500 Index) rather than an Int. Fund. You're mainly diversified between about 900 companies (statistically that's already far more than plenty), mostly all Large-caps, but it backs off on Mega-caps, still has plenty of global exposure, and has more room to grow than a Total US and/or Int. blend because that's still almost all Mega-Caps.

Back-testing shows it's been FAR better. I prefer it so much, I'm far more in Mids than Total/500, but just doing whatever you would've put in Int. would do you more good going into the US Midcap.

Also, I've been in 100% stocks my whole investing life. Even riding out the dot-com bubble and 2008 crash, I'm far more ahead than if I were in something like 40% Total US/30% Int./30% Bonds. You have to be able to handle it, but don't let people just tell you not to be in 100% stocks, or only do it when you're young.


Free Forever

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Re: 100% in VTI?
« Reply #11 on: February 13, 2017, 08:01:42 PM »
The risk adjusted returns of an internationally cap weighted portfolio are historically pretty good despite the economically devious behaviour of various constituate countries over the years. Currently US markets have geographically diverse revenue streams but that's not the same thing as having international market diversification. In VTI you're more exposed to US politics, culture and socio-demographic factors then someone holding something like VT (Vanguard World). If I were an American and wanted to invest 100% in stocks I'd put 90% of my portfolio in VT (or something equivalent in a mutual fund). I'd invest the other 10% in an active fashion that suited my tastes.

 

Indexer

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Re: 100% in VTI?
« Reply #12 on: February 13, 2017, 08:18:08 PM »
60% VTI, 40% VXUS.  Pretty simple.

Quote from: AZryan
The 'typical' suggested amount you should be invested in international funds has usually been considered ~10-25%. Since world markets mostly all flow together, and that's not a large percent, it means doing it or not will probably not end up making much of any difference at all for most people either way.
There are people here who do ~60/40 US/Int. and I think that's way too much International. It's certainly done much worse than US only for the past 20 years and 'still worse, but closer' over a much longer term. I see little chance of any future benefit.

The 60/40 came from a lot of research looking at the diversification VS volatility of the two. 40% international lowers the volatility of a portfolio. Any less that 40% and you aren't diversified enough, any more than 40% and you start to experience the higher volatility associated with international. 60/40 gives you a more efficient portfolio.



Since 1990 US has outperformed most of the time. From 1972-1990 international outperformed most of the time. What will happen in the future?  Who knows, hedge your bets, own both.


AZryan

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Re: 100% in VTI?
« Reply #13 on: February 14, 2017, 02:48:27 AM »
-US markets have geographically diverse revenue streams but that's not the same thing as having international market diversification.

True, but it's effectively plenty 'close enough' because of how typically and how often world markets all flow together.

And it's pretty obvious that being invested in the US stock market (VTI) exposes you more to US politics, culture, etc. than Int. funds do. I made the claim that Europe and Japan have more problems in those areas. Do you disagree? If you think it's about equal, then that still makes US only just as sensible as a blend with Int. (as I noted Buffet and Bogle both have said themselves).

Again, all markets are all highly connected and tend to 'feel' the rest of the globe. The US is one of the strongest, most global of all those various indexes.


AZryan

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Re: 100% in VTI?
« Reply #14 on: February 14, 2017, 03:41:58 AM »
Since 1990 US has outperformed most of the time. From 1972-1990 international outperformed most of the time. What will happen in the future?  Who knows, hedge your bets, own both.

Don't disagree with your chart, but as I basically already said... going by all of that timeframe, the US did better, going by most of that timeframe, the US did better, going by longer than that timeframe, the US did better, and going by the latest timeframe (of decades), the US did better. That's at least a slightly better reading of that chart than your version, IMO.

I don't find the volatility/efficiency argument very convincing. I don't consider volatility to be 'risk' like a lot of financial people use it, and so it doesn't end up with a logical version of efficiency, either.

I consider having made more/faster by not being in Int. to be more efficient in real world terms. And never cared about volatility being a little higher. Doesn't hurt anything if I ignore it, and gives me better buy-in chances during crashes -like in Feb. last year, I made ~35% on some extra cash I put in the MidCap Index at that time. That's significantly more than if I put it in the less volatile Total Market that crashed/rebounded at the exact same time.

Then you asked 'what will happen in the future?' like it's just rhetorical and a complete unknown. But I listed a bunch of stuff that shines a light on what is known, and more likely than not in Europe/Japan/US's future. I could be wrong, but it's more in-depth than "Who knows, so might as well have far more in Int. than most investment managers or major companies like Vanguard, Fidelity, T Rowe Price, etc. recommend."

That just seems like a weaker argument than what I presented before you.

I'd be curious if you'd argue against my suggestion of having a heavy dose of MidCaps instead of Int. mixed in someone's Stock allocation? That chart would show it kicking the ass of both US Total and US/Int. blend.
It's a bit more volatile, but historically made far more, so I never cared. I was so ahead that the biggest drops only put me in the same place I would've been in those less volatile Indexes. It rebounded just as fast as the 500 Index in the 2008 crash, and didn't have nearly the awful problem during the dotcom bubble.

That's kind of my same argument for all-stocks vs. stock/bond blend, too. More volatile, but you're probably more ahead when you get hit with a bigger crash, and then pull back ahead after that, and will probably pull ahead 99% of the rest of the time.

Oh... and I don't get how you're saying less than 40% Int. is not diversified enough? Statistically, it only takes like ~30 random stocks to be pretty well diversified in the US stock market, so I don't get how being in thousands in the total US market, or with 39% or less in the whole world, isn't diversified enough for you?
« Last Edit: February 14, 2017, 03:46:55 AM by AZryan »

MustacheAndaHalf

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Re: 100% in VTI?
« Reply #15 on: February 14, 2017, 07:34:26 AM »
I am thinking maybe I'll do 60% in VTI and the other 40% in VSUX:
One reason to spell out fund names is when you make typos like that one - I assume you meant VXUS, the Vanguard Total International ETF. 

If your goal is everything in one fund, "VT" is the Vanguard World ETF.  It holds 54% US and 46% rest of the world, per stock market cap of companies.

Indexer

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Re: 100% in VTI?
« Reply #16 on: February 14, 2017, 04:25:48 PM »
If your goal is everything in one fund, "VT" is the Vanguard World ETF.  It holds 54% US and 46% rest of the world, per stock market cap of companies.

VTI + VXUS is cheaper than VT. Given that, I can't think of a reason for VT to exist. You are better off just owning the other two.


Quote
That just seems like a weaker argument than what I presented before you.

We want different things. You want to squeeze out all of the returns possible and are open to more risk. 60dom/40int is a more efficient portfolio if you care about a good trade off between risk and return. I don't believe US will always outperform just because it did the past 20 years.

Quote
Oh... and I don't get how you're saying less than 40% Int. is not diversified enough?

Well 30% international gives you most of the benefits of being at 40%, but technically 40% is the lowest point when measuring volatility. I guess even 5% is better than 0%, but it progressively gets better the closer you get to 40%. Once you pass 40% volatility starts to go back up.

MustacheAndaHalf

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Re: 100% in VTI?
« Reply #17 on: February 14, 2017, 08:13:54 PM »
If your goal is everything in one fund, "VT" is the Vanguard World ETF.  It holds 54% US and 46% rest of the world, per stock market cap of companies.
VTI + VXUS is cheaper than VT. Given that, I can't think of a reason for VT to exist. You are better off just owning the other two.
OP wants a single fund, which is why I suggested VT.  If you want to one up each other on fund expenses, though, let me one up you with VTI + VEA + VWO.  The ratio of 5:1 for VEA to VWO saves more on expenses than your pick of VXUS.

AZDude

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Re: 100% in VTI?
« Reply #18 on: February 14, 2017, 08:35:34 PM »
International ETFs always have higher expense ratios so I would suggest just going with a single US based index. Global economy is so connected today that its hard to see the US having a major correction while the rest of the world booms.

Free Forever

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Re: 100% in VTI?
« Reply #19 on: February 15, 2017, 08:00:40 PM »
-US markets have geographically diverse revenue streams but that's not the same thing as having international market diversification.

True, but it's effectively plenty 'close enough' because of how typically and how often world markets all flow together.

And it's pretty obvious that being invested in the US stock market (VTI) exposes you more to US politics, culture, etc. than Int. funds do. I made the claim that Europe and Japan have more problems in those areas. Do you disagree? If you think it's about equal, then that still makes US only just as sensible as a blend with Int. (as I noted Buffet and Bogle both have said themselves).

Again, all markets are all highly connected and tend to 'feel' the rest of the globe. The US is one of the strongest, most global of all those various indexes.

It sort of goes without saying but stock market diversification is good, the more of it you have the more return per unit of risk you generally get. Everyone here probably knows that costs are bad too.The only reason I would not diversify internationally is if the costs (taxes, expenses, etc.) outweighed the benefits. I can't pick countries with anymore skill then I can pick individual stocks, information is priced in faster then I can act on it. Diversification and costs guide my international allocation.

If you look at Exhibit 1 in this article the world portfolio beat 16 out of 20 countries on the list, US markets would have contributed a large portion of that return.
« Last Edit: February 15, 2017, 08:05:05 PM by Free Forever »

Le Barbu

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Re: 100% in VTI?
« Reply #20 on: February 16, 2017, 09:17:22 AM »
I am 100% stocks, but I'm invested in 4 different ETFs:

- US stocks = 50%
- CDN stocks = 30%
- Int'l Developed stocks = 10%
- Int'l Emerging stocks = 10%

Personally I wouldn't want to be 100% invested in US stocks. Seems poorly diversified to me.

I'm still in accumulation mode so I have no plans to withdraw any money soon and I can ride out any crash that comes my way while adding new money. As I get to FIRE I will transition to some bonds to get me through the sequence of returns risk phase of early FIRE.

We are actualy 30%CDN stocks, 25%VTI, 10%VBR and 35%VXUS

If I were a US citizen, my AA would probably be 50%VTI, 20%VBR and 30%VXUS

As a Canadian, I feel the need to have a home bias for a safety purpose

Le Barbu

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Re: 100% in VTI?
« Reply #21 on: February 16, 2017, 09:19:31 AM »
With (apologies) only $20k and a long time horizon (15+ years) to need to sell it, I'd go all into VTI, knowing that when it drops 50% you will buy more.

With $200k, I would strongly advocate global diversification including a good helping of fixed income.

+1

Another reason is the taxes. Usually, domestic stocks are tax advantaged over anything else

AZryan

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Re: 100% in VTI?
« Reply #22 on: February 16, 2017, 01:04:45 PM »
Quote from: Free Forever
-stock market diversification is good, the more of it you have the more return per unit of risk you generally get.

There's a long-standing argument here and elsewhere over the problem with defining 'volatility' as being the same thing as 'risk'. If people mean 'volatility', they should just say 'volatility' since that's perfectly clear, and 'risk' means something very clear, but very different, to most people in common usage (and that definition is far more logical).

And once you admit you're only talking about lowering volatility, rather than true risk, the benefit becomes far less clear -if there's even any inherent benefit at all.

Between 100% US stocks vs. a mix with Int...
the mix has done worse over almost any timeframe. You have to cherry pick badly to find an instance it didn't, and it's still not that much of a diff.
And I listed factors that still currently favor the US going forward and agreement from two of the world's most respected investors. That all points to a higher risk by having an Int. mix.

As for 100% stocks vs. a stock/bond mix...
100% stocks is more volatile vs. a 60/40 mix with bonds, but it's not inherently riskier. It's only riskier if the volatility scares you into selling. But you'd have to blame yourself for getting scared. Stocks have always historically rebounded and risen to new heights if you just do nothing.

And dealing with the more practical factors of having a slightly higher volatility portfolio in retirement only takes a few tips and tricks -same as it does when following the 'classic 4% rule' that no one actually blindly follows.

Have a bit more cash on hand to counter bigger market drops, and/or a home line of credit to ride out the very worst moments, and/or factor in a bit higher/more flexible spending target.

You'll probably still hit your finish line faster with all-stocks, so it's more 'efficient' in real-world terms. Studies show all-stocks are the best bet for extra-long retirements, too, so that's lower-risk in real-world terms, yet more-risky in weird, financial jargon speak.

I've done this in practice, and it's been great even through the dotcom bubble and 2008 crash (being heavy in MidCaps made it all the better).



P4J

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Re: 100% in VTI?
« Reply #23 on: February 16, 2017, 03:06:02 PM »
The problem with "only buy American companies, they source their revenue globally" argument is this: diversifying into international (such as the EAFE index) isn't only intended to capture spending in the constituent countries; it's supposed to hedge against competition that US firms see from foreign firms. For example, if you are invested in the S&P 500, and ExxonMobil steals market share from Chevron, you don't care, because you own both the winner and loser. But if market share is stolen by Royal Dutch Shell, and you aren't invested in Europe, you lose.

Investing only in US companies, you lose if:
  • Toyota steals market share from GM
  • Samsung steals market share from Apple
  • Nestle steals market share from Mondelez
  • Siemens steals market share from Honeywell
  • General Reinsurance steals market share from Berkshire Hathaway
and so forth. Since American companies have been so good at holding their own, holding just American stocks has been a good strategy for a long time. You implicitly assume that will continue if you only invest in the US, which is a form of stock picking. By holding stocks globally, you don't care if any of the bullet points above comes to pass...you only care that the overall size of the global economy grows.

Indexer

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Re: 100% in VTI?
« Reply #24 on: February 16, 2017, 03:50:06 PM »
Between 100% US stocks vs. a mix with Int...
the mix has done worse over almost any timeframe. You have to cherry pick badly to find an instance it didn't, and it's still not that much of a diff.
And I listed factors that still currently favor the US going forward and agreement from two of the world's most respected investors. That all points to a higher risk by having an Int. mix.

Any timeframe? Any?

Without cherry picking... just taking a glance at the chart earlier in the this post with the naked eye...

1970-1990 International killed Domestic. That's a 20 year cycle. In the following 20 year cycle 1990-2010 domestic does better for most of it.

The next 20 years? I vote for diversification.

Retire-Canada

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Re: 100% in VTI?
« Reply #25 on: February 16, 2017, 04:23:17 PM »
The next 20 years? I vote for diversification.

Well that would be the smart move. Absent a functioning crystal ball.

Free Forever

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Re: 100% in VTI?
« Reply #26 on: February 16, 2017, 04:48:53 PM »
Quote from: Free Forever
-stock market diversification is good, the more of it you have the more return per unit of risk you generally get.

There's a long-standing argument here and elsewhere over the problem with defining 'volatility' as being the same thing as 'risk'.



I think volatility is one of many types of financial risk. I also disagree with equating volatility with all types of risk. I think diversification helps cushion the passive investor against most, if not all, types of financial risk. That is what all my research seems to indicate. I also want to note that up until this post I didn't even use the word 'volatility' and I didn't imply volatility was equal to risk.


I don't see the logic in the argument, with the exception of costs, for passive investing in any one country. Most of those arguments seem to boil down to gamblers fallacy or a sort of economic patriotism about how the country has better businesses, better politics, international profits, better safety etc. Markets have become more internationalized so there probably is less benefit to international diversification, but that doesn't persuade me that one should just invest in a single country and call it a day.
« Last Edit: February 16, 2017, 04:52:10 PM by Free Forever »

ChpBstrd

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Re: 100% in VTI?
« Reply #27 on: February 17, 2017, 03:20:37 PM »
Consider which funds could be juiced a percentage or two per year with a far-OTM covered call strategy. I've noticed bid-ask spreads on certain funds are much narrower than others.

A difference in expense ratios of a few hundreths of a percent pales in comparison.

crentist

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Re: 100% in VTI?
« Reply #28 on: February 17, 2017, 03:37:09 PM »
Sounds like sticking with betterment wouldn't be a bad idea.  Just crank up the equity balance.  with 20k I wouldn't sweat the small fees.  I use both and betterment is soooo easy. 

Le Barbu

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Re: 100% in VTI?
« Reply #29 on: February 18, 2017, 06:13:06 AM »
With 20k$ I would not bother dirverifying more than VTI can offer, especially if the account is taxable


NorthernBlitz

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Re: 100% in VTI?
« Reply #30 on: February 19, 2017, 09:01:39 AM »
I think one total US market fund is probably a good idea, especially for folks who are starting and don't have a lot of capital.

I think that the big advantage of this strategy is that it's super simple and humans usually have much better adherence to a good simple plan over a great complicated plan.

I think that the big disadvantage is that it's only one fund. Because of that, a human investor might pull out when the VTI is down 30-40%. Personally, I like the idea of having 3 funds (US, International, and Bonds) so in a case like this I can rebalance and feel like I'm doing something good. I think for me that's easier to do that doing nothing and feeling like I'm doing something good. I know that that 10% I have in bonds will underperform equity (US and International) in the long term, but I think it will help me avoid bad decisions when stuff hits the fan.

Retire-Canada

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Re: 100% in VTI?
« Reply #31 on: February 19, 2017, 09:27:15 AM »
The OP is young and the $20K is just the start of their investment plans. Advice we give should be framed with that in mind. Not treating the $20K like it's the sum total of what is being contemplated.

talltexan

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Re: 100% in VTI?
« Reply #32 on: February 20, 2017, 06:33:32 AM »
Consider which funds could be juiced a percentage or two per year with a far-OTM covered call strategy. I've noticed bid-ask spreads on certain funds are much narrower than others.

A difference in expense ratios of a few hundreths of a percent pales in comparison.

Can you tell us more about this strategy? If adding 1% to a return every year is possible, of course I'm interested. I'm worried that it would shift that 1%, though, as you'd miss out on some gains (to sell to the calls) in what would normally be really good years.

aceyou

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Re: 100% in VTI?
« Reply #33 on: February 20, 2017, 07:27:21 AM »
Yes, all VTSAX.  Just starting stache though, so only about 80k invested in it. 

When I retire I plan to follow the results of the trinity study and go 75% stocks and 25% Bonds, unless better research shows otherwise over the coming years. 

Disclaimer: much of my education came from JLCollins, so I have a bias in that direction. 

TheAnonOne

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Re: 100% in VTI?
« Reply #34 on: February 20, 2017, 08:12:54 AM »
I have nearly 300k in VTSAX (half is taxable)

I have thrown around the idea of going 25% international, though clearly have not done any work to move this way.

What's holding me back is mainly taxes, I am not sure where to hold int, my taxable account? 401k/IRA?

While I am building my stash, it seems like a moot point. Honestly, volitile stocks improve returns while in accumulation  because you're hitting the low points more often.

Mr Mark

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Re: 100% in VTI?
« Reply #35 on: February 20, 2017, 09:57:53 AM »
It seems we often get caught in discussion about marginal 'angels on the head of a pin' type stuff from people with tiny stashes who are too worried about precise investment strategy - like it makes a huge difference to the big things: quality of life or time to FIRE...

Whether your AA is 100% us market or  a subtle blend of various other things shouldn't matter that much. Savings rate is prime. The possible slight variations between AA are far less critical.

TheAnonOne

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Re: 100% in VTI?
« Reply #36 on: February 20, 2017, 10:04:04 AM »
It seems we often get caught in discussion about marginal 'angels on the head of a pin' type stuff from people with tiny stashes who are too worried about precise investment strategy - like it makes a huge difference to the big things: quality of life or time to FIRE...

Whether your AA is 100% us market or  a subtle blend of various other things shouldn't matter that much. Savings rate is prime. The possible slight variations between AA are far less critical.

Yea, it does seem like the people worrying about market timing and allocations are all sub 50k. Hell, we have traders on here worried about making the "big trades" and they are working with $1,000...

I think at least SOME of it is that the guys just starting out are curious about what route to go before they have 500k. It makes a little sense to me that people starting out....

A. Have smaller staches
B. Are curious about how it works

tophdna

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Re: 100% in VTI?
« Reply #37 on: February 20, 2017, 10:48:35 AM »
Great discussion, guys. To the original poster: I'm currently 100% into stocks. VTSMX. Only because I don't have enough to get into VTSAX yet though. I was VTI until I had enough to get into VTSMX. The ER is higher, but I'm just going off advice from people I respect (people that have posted here and books I've read). I've just started investing but my goal is to hold VTSMX until I can get into the admiral shares (VTSAX). I would like to hold that until I get close to retirement!

TheAnonOne

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Re: 100% in VTI?
« Reply #38 on: February 20, 2017, 12:29:50 PM »
Great discussion, guys. To the original poster: I'm currently 100% into stocks. VTSMX. Only because I don't have enough to get into VTSAX yet though. I was VTI until I had enough to get into VTSMX. The ER is higher, but I'm just going off advice from people I respect (people that have posted here and books I've read). I've just started investing but my goal is to hold VTSMX until I can get into the admiral shares (VTSAX). I would like to hold that until I get close to retirement!

Fyi, when you hit 10k, it's super easy to roll it into vtsax (like 1 button)

scottyent

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Re: 100% in VTI?
« Reply #39 on: March 27, 2017, 03:06:54 PM »
Holy crap, I did not realize this thread kept going after 2-3 posts! That's awesome that people are so involved on this forum.

I've decided based on this conversation that VTSAX is the way to go, and I can throw my investments into that for the time being. I think I understand the argument between the all US or mix of international, and it sounds like a compromise would be 20% international for hedging bets.

However, others seemed to indicate that at my amount of money, something like this won't make a huge difference, so for now I'll focus on contributing to VTSAX because of the low cost and ease of focusing my savings in one area, and later on down the road take steps to be more focused on allocating 20% for international diversification.

Last question on this, do you guys think doing something like investing 10k initially to buy in, then doing 5k a month for 2-3 months is worth doing to dollar cost average?

Or would it just make more sense to throw it all in right away?

Le Barbu

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Re: 100% in VTI?
« Reply #40 on: March 27, 2017, 04:22:43 PM »
Excellent decision!

Throw the 20k$ tomorrow at 9h35 and move on!

People here are very involved indeed...

Davids

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Re: 100% in VTI?
« Reply #41 on: March 27, 2017, 05:06:08 PM »
Here is my personal Vanguard ETF recommendation split

50% VTI
25% VIG
15% VNQ
10% VXUS

Yes I know there are no bonds. If you want bonds I suppose you can then instead go 20% VIG and then 5% BND.

FIreDrill

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Re: 100% in VTI?
« Reply #42 on: March 27, 2017, 05:50:18 PM »
Another vote for VTSAX.
I started with a similar amount as you 4 years ago.  Now my total investments are around 240k and climbing.  All of it is in VTSAX or an equivalent index fund.
I like this approach because it's dead simple and freed me up to focus more on boosting income and cutting expenses without sacrificing returns. I'm also a huge fan of low cost index investing.  I'm hoping to hit 300k invested this year and 500+k invested by the time I turn 30 in 2020.
Dump the entire 20k in there ASAP and then start building that stache with monthly contributions.

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respond2u

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Re: 100% in VTI?
« Reply #43 on: March 27, 2017, 10:55:26 PM »
Yes, all VTSAX.  Just starting stache though, so only about 80k invested in it. 

When I retire I plan to follow the results of the trinity study and go 75% stocks and 25% Bonds, unless better research shows otherwise over the coming years. 

Disclaimer: much of my education came from JLCollins, so I have a bias in that direction.

Regarding stock/bond allocation, you might be interested in this article from earlyretirementnow where he talks about the longevity of 75/25 and Trinity (originally Bengen): https://earlyretirementnow.com/2016/12/07/the-ultimate-guide-to-safe-withdrawal-rates-part-1-intro/

I enjoyed the entire series illuminating, and especially liked the google sheet calculator that looks forward in a high-CAPE era.

Although he's advocating 100% stock allocation for retirements lasting longer than the 30-year time frame of the trinity study, he also calculated that keeping a few years in cash for living expenses works out best: https://earlyretirementnow.com/2016/10/26/cash-management-in-early-retirement/

CorpRaider

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Re: 100% in VTI?
« Reply #44 on: March 29, 2017, 06:59:32 AM »
Are you going to be able to cope when stocks decline by 50%? 

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Re: 100% in VTI?
« Reply #45 on: March 29, 2017, 11:07:46 AM »
I am not as far along the FIRE path as others here. I have less than $10k saved, and just under $2k invested. In my taxable account, I am invested entirely in VTI. I also have some individual stocks. I have 21 shares of SNH, a senior housing REIT, 5 shares of KGC, a gold company, and one share of CBB (used to be more, but they did a reverse stock split). I'm waiting for CBB to fall more so I can sell it for the (admittedly small) tax-loss-harvesting benefit. In my Roth IRA, I'm currently invested only in VYM, for the tax-free dividend returns. As I make more money, I plan to add more to both accounts and diversify a bit more. I also want to invest in GEO and/or CXW, and JNK, which is a junk bond index. At my age, I feel I have a reasonably high risk tolerance.