Author Topic: Beginner's Vanguard ETF Portfolio advice  (Read 3093 times)

tb43

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Beginner's Vanguard ETF Portfolio advice
« on: May 12, 2015, 05:54:28 PM »
Hi all,

Starting with 10,000 in taxable and would like to also start a roth ira. I am 21 years old so time horizon is definitely long term and I have a high risk tolerance. After my research

Option 1:
VTI 70%
VXUS 30%

Option 2
VTI 65%
VXUS 25%
BND or maybe BSV b/c of shorter duration? 10%

I would appreciate any advice as I am definitely a beginner. 3 questions

1) Thoughts on not owning any bonds at all?
2) Is BND a good fund even with current interest rate environment?
3) Should I just keep the roth and taxable the same allocation or maybe put all of the bonds in taxable and more stocks in the roth?

I really appreciate the help! Any other fund suggestions or additions would be greatly appreciated. Most of my investable NW is in a primary residence so I wasn't sure how I felt about a REIT. I can handle managing a few extra funds if it might be beneficial!

forummm

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Re: Beginner's Vanguard ETF Portfolio advice
« Reply #1 on: May 12, 2015, 07:13:53 PM »
There are a bunch of threads on here about people who are 100% stocks. Some say it's fine if you are certain you won't sell when the market goes down. Others say it's risky. I've been 100% stocks since I started investing in 2000, so obviously I think it's possible for some people to stay the course. So that's a decision that you have to make personally.

If you're going to own bonds, and you've decided on an asset allocation, then you should stick with that allocation now, even if you think interest rates will go up (they will at some point obviously). Your time horizon is very long, so you will end up holding those bonds to maturity anyway, so the short term losses to interest rate changes won't affect your long term total return.

People generally advise holding all your bonds in tax advantaged accounts so that you aren't paying as much tax on dividends while you're still working.

Interest Compound

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Re: Beginner's Vanguard ETF Portfolio advice
« Reply #2 on: May 12, 2015, 08:19:58 PM »
Hi all,

Starting with 10,000 in taxable and would like to also start a roth ira. I am 21 years old so time horizon is definitely long term and I have a high risk tolerance. After my research

Option 1:
VTI 70%
VXUS 30%

Option 2
VTI 65%
VXUS 25%
BND or maybe BSV b/c of shorter duration? 10%

I would appreciate any advice as I am definitely a beginner. 3 questions

1) Thoughts on not owning any bonds at all?
2) Is BND a good fund even with current interest rate environment?
3) Should I just keep the roth and taxable the same allocation or maybe put all of the bonds in taxable and more stocks in the roth?

I really appreciate the help! Any other fund suggestions or additions would be greatly appreciated. Most of my investable NW is in a primary residence so I wasn't sure how I felt about a REIT. I can handle managing a few extra funds if it might be beneficial!

1.  Worst idea ever.
2.  Yes, don't market time the bond market.
3.  It doesn't really matter.

REITS?  100% Stocks?  Market timing?  Don't worry about any of it I say.  Just get a Vanguard Target Date fund.  That way you literally don't have to make any decisions, simply tell them your age, and they will take care of the rest.  It doesn't get any simpler than that.

GGNoob

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Re: Beginner's Vanguard ETF Portfolio advice
« Reply #3 on: May 13, 2015, 07:21:56 AM »
1) Thoughts on not owning any bonds at all?
2) Is BND a good fund even with current interest rate environment?
3) Should I just keep the roth and taxable the same allocation or maybe put all of the bonds in taxable and more stocks in the roth?

1) A lot of us here feel 100% stock is fine as we'll need the extra growth of stocks for our long retirement. I don't own any bonds for retirement.
2) Yes, BND is a good fund. Decide what you want your asset allocation to be and just make the purchase. Don't market time.
3) Treat all of your investment accounts as a single fund and hold the funds where they are most tax efficient. Bonds should be in your tax-advantaged retirement accounts.

If you have $10,000 to invest now and don't see yourself needing that money until you retire, then just go ahead and max out your Roth IRA first. Then put the rest in your taxable account.

forummm

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Re: Beginner's Vanguard ETF Portfolio advice
« Reply #4 on: May 13, 2015, 08:10:21 AM »
1) Thoughts on not owning any bonds at all?
2) Is BND a good fund even with current interest rate environment?
3) Should I just keep the roth and taxable the same allocation or maybe put all of the bonds in taxable and more stocks in the roth?

1) A lot of us here feel 100% stock is fine as we'll need the extra growth of stocks for our long retirement. I don't own any bonds for retirement.
2) Yes, BND is a good fund. Decide what you want your asset allocation to be and just make the purchase. Don't market time.
3) Treat all of your investment accounts as a single fund and hold the funds where they are most tax efficient. Bonds should be in your tax-advantaged retirement accounts.

If you have $10,000 to invest now and don't see yourself needing that money until you retire, then just go ahead and max out your Roth IRA first. Then put the rest in your taxable account.

Agree, except that it might be more advantageous to you to max out a traditional IRA instead of Roth. You should look into that as well.

kunostories

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Re: Beginner's Vanguard ETF Portfolio advice
« Reply #5 on: May 15, 2015, 12:03:41 AM »
1) Thoughts on not owning any bonds at all?
2) Is BND a good fund even with current interest rate environment?
3) Should I just keep the roth and taxable the same allocation or maybe put all of the bonds in taxable and more stocks in the roth?

1) A lot of us here feel 100% stock is fine as we'll need the extra growth of stocks for our long retirement. I don't own any bonds for retirement.
2) Yes, BND is a good fund. Decide what you want your asset allocation to be and just make the purchase. Don't market time.
3) Treat all of your investment accounts as a single fund and hold the funds where they are most tax efficient. Bonds should be in your tax-advantaged retirement accounts.

If you have $10,000 to invest now and don't see yourself needing that money until you retire, then just go ahead and max out your Roth IRA first. Then put the rest in your taxable account.

Agree, except that it might be more advantageous to you to max out a traditional IRA instead of Roth. You should look into that as well.

Listen to your seniors.