My apologies in advance if this may have been discussed in a previous thread earlier, but I am considering the idea of investing in ETFs for a very long time vs. index funds (10-20 years) in a taxable account.
I currently own the Vanguard Total Stock Market Index (VTSMX) fund via Vanguard directly. At the moment, I have investor share status which has a 0.17% ER, while the ETF and Admiral shares have ERs of just 0.05 %.
I'm considering adding to the portfolio, the Vanguard Total International Stock fund, but with another 3K minimum investment, I would have to fund it and then sell part of it have it match my desired asset allocation of 80/20. Then do the same if I wanted to add another fund.
I originally opened the account directly with Vanguard because I could fund monthly additions to the accounts in whole dollar amounts because the ETFs at Vanguard do not allow partial share purchases via automatic investing like they do at Betterment or Wealthfront. I'm not going with Betterment or Wealthfront because I don't foresee myself selling anytime in the near future and am not sure if their model will provide me any monetary advantage vs. their additional fees.
I have available to me some monthly free trades via my bank (Merrill Edge). I'm thinking of building my portfolio using those free trades. I will give up the auto investing via Vanguard to have an opportunity to lower my expense ratios over the long term.
Before doing this, I wanted to see what others would consider in this scenario? Does this make sense? Are there any negatives to going long in ETFs vs index funds?
Any concerns on dividend reinvesting?
Many thanks!
Matt
