The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: Jenny1974 on May 19, 2017, 06:47:44 AM
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So, I transferred some extra cash (roughly $20,000) from our savings over to VG to put into some sort of mutual fund. I have quite a bit in the S&P 500 and total stock market index funds. I have a little in a VG REIT and was thinking about putting this $20,000 in that fund to up the real estate portion of our portfolio.
However, the more time I spend researching the more I can't make up my mind. Anyone have anything particularly compelling to add about a VG fund besides the S&P 500 and Total Stock Market Index funds?
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Have you read JL Collins stock market series? It will do wonders to shore up your resolve if you agree with his outlook. Good luck!
(I would go VTSAX all the way. I'm assuming you also still have some cash in savings and this money is not for a short-term goal? Our brokerage is all VTSAX offset by cash savings while retirement savings are 90/10 stock/bond. We're 36 & 37 with a kid and one coming soon.)
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Yes . . this is just excess cash that accumulated in our checking account basically. Still have about $40,000 cash for emergencies.
I haven't read that series . . I will definitely check it out.
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You need a formal Investment Policy Statement (IPS). This will make this decision and further decisions much easier. You need to set an Asset Allocation as well. Go check out this Bogleheads site for a proper primer on this.
https://www.bogleheads.org/wiki/Investment_policy_statement
Best of luck! JGS
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While you are on the Bogleheads site, see also Three-fund portfolio - Bogleheads (https://www.bogleheads.org/wiki/Three-fund_portfolio) and links therein.
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I think this would be another good resource for developing OP's thinking on this question:
https://www.bogleheads.org/wiki/Asset_allocation
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I would second (or third) the opinion of using it to add in a small amount of foreign market ETFs to balance out your US Total Market exposure. Don't do it because they're 'on sale', do it only if you feel that investment gives you an appropriate portfolio asset allocation.
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Personally I'd put it in VTIAX, but you're probably going to do just fine with any of them. Why overthink it? Pick one.
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Since you're just starting with international, try 20% total international and leave 80% in US stocks. That way you don't feel too bad if it's performance isn't what you expect, but you still get diversification from it.
There's nothing wrong with owing every stock in the US market, which is why I question you avoiding Vanguard Total Stock Market with further investment dollars. Every other US fund has to pick from the stocks in the Total Stock Market fund. You capture everything in the US by investing there, so I hope you don't avoid it because it's just one fund - it contains thousands of stocks.
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why do you own both S&P 500 and total market? there's significant overlap
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Do you own your own home? How does the equity in that home compare to your investments? If it's already substantial, I'd advise against the REIT and toward VTSAX
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Yes . . we own our home. The equity in our home is about 15% of our overall net worth.
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could probably put another 10% of NW into a REIT, then.