The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: Magclaw on November 10, 2014, 01:10:48 PM
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After my previous post of the disaster I faced with individual stocks I am back in cash and ready to start indexing!
But first I have some questions.
1. I have been using sharebuilder for my trading. Would now be the time to switch to Vanguard? If not I can simply buy Vanguard funds ETF versions. Would it be a bad choice to stay with sharebuilder since I will not be making many transactions? I kind of like using capitalone/sharebuilder since I have my mortgage/credit card/savings account with them and my tax documents can me imported into turbotax, and they are also familiar (and I believe the fees are similar with the ETF and Admiral class).
2. I want to be on the safer things so I was thinking a 80:20, stocks:bonds balance. Now my questions is this, since my 403b is with TIAAcref and they offer an fund called TIAA-CREF Guaranteed which guarantees your principle and is currently paying 3% returns, can I simply put my 403 balance (20k) in there and keep my taxable account solely in VTI. If there is a need to rebalance I can move around the 403 as needed.
3. Is placing my taxable assets (80k) simply in VTI okay. I have read about using international stocks, but that it is not a must.
I will thank you already for the future feedback on this,
Magclaw
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1. I have been using sharebuilder for my trading. Would now be the time to switch to Vanguard? If not I can simply buy Vanguard funds ETF versions. Would it be a bad choice to stay with sharebuilder since I will not be making many transactions? I kind of like using capitalone/sharebuilder since I have my mortgage/credit card/savings account with them and my tax documents can me imported into turbotax, and they are also familiar (and I believe the fees are similar with the ETF and Admiral class).
I would recommend cashing out and switching to Vanguard as your trades will have no transaction costs for Vanguard ETFs and funds.
2. I want to be on the safer things so I was thinking a 80:20, stocks:bonds balance. Now my questions is this, since my 403b is with TIAAcref and they offer an fund called TIAA-CREF Guaranteed which guarantees your principle and is currently paying 3% returns, can I simply put my 403 balance (20k) in there and keep my taxable account solely in VTI. If there is a need to rebalance I can move around the 403 as needed.
I used to work for a school and had TIAA-CREF, they are painfully high fee, I would get out if you can or at least switch to the "Stock" fund that is around 1% for an index fund. Depending on your time horizon I consider an 80/20 to be pretty conservative, but that is not your question.
3. Is placing my taxable assets (80k) simply in VTI okay. I have read about using international stocks, but that it is not a must.
Vanguard offers an international and a domestic. There is a Total World Market Fund that will cover everything, but this actually has a higher fee than buying them individually. I always recommend at least 20% of your stocks to be outside the US. There are a lot of different opinions on this and they have been discussed at length here before.
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Regarding 2.
I can not see any listing of fees for the fund which I named incorrectly. Its actually called "TIAA Traditional" with no risk to principle and currently paying 3%. You can move money into and out of this fund with no cost. I have had it for a few months and it pays 3%/364 per day.
My job only allows us to use TIAA so I thought I could keep what I should allocate to bonds in this fund, which is about 20% of my total portfolio and at the same time avoid the fees that TIAA usually charges. I think the fees are built into this 3% but I am not sure. The return on BND is lower than 3% and poses some risk, while this does not.