Author Topic: Taxable brokerage allocations  (Read 390 times)

zoochadookdook

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Taxable brokerage allocations
« on: March 18, 2020, 12:56:04 PM »
Hi all,

Sitting on 160k liquid right now due to the house being sold.

Have 5k more to go to my roth this year (vanguard 2060, dumping in this week).

I'm trying to figure out how to allocate the other 95k into a taxable brokerade (markets tanking, I'm 27, don't need the money in the foreseeable future- seems like the move to make).

I'm keeping out 20k/emergency fund and 40k extra/possible house down payment.

I'm looking at VTI/VXUS or VTSAX/VFIAX. Any reason to go ETF's or MF's in my scenario? Should I look at adding a more agressive fund in for the sake of it?  Looking 60/40 split.


Aggie1999

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Re: Taxable brokerage allocations
« Reply #1 on: March 18, 2020, 01:04:06 PM »
I personally prefer the simplicity of Vanguard mutual funds over their ETF equivalent. Just say buy or sell at end of day for X amount. No having to deal with left over money from a purchase, etc.

Above only applies with Vanguard funds. Other funds are not tax efficient like ETF's are.

zoochadookdook

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Re: Taxable brokerage allocations
« Reply #2 on: March 18, 2020, 01:05:23 PM »
I personally prefer the simplicity of Vanguard mutual funds over their ETF equivalent. Just say buy or sell at end of day for X amount. No having to deal with left over money from a purchase, etc.

Above only applies with Vanguard funds. Other funds are not tax efficient like ETF's are.

So a MF just sells or buys for the closing average price of the day? You won't know what that is until the order is completed?

MustacheAndaHalf

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Re: Taxable brokerage allocations
« Reply #3 on: March 18, 2020, 01:37:42 PM »
That's correct: mutual funds only trade once a day, after the market close.  Note if you buy now, after 3:30pm EST, you probably won't buy in today.  Your purchase will probably happen tomorrow, after the market closes.

With an ETF, you get the market price as it stands right now.  Really large ETFs have the advantage of being very liquid, so you don't see much (or any) loss between people buying and selling.

ysette9

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Re: Taxable brokerage allocations
« Reply #4 on: March 18, 2020, 02:41:37 PM »
If you are going and don’t need this money for a long time then I think you should go more aggressive than 60/40. We were probably 90/10 during accumulation phase. That said, things are very volatile right now so you need to be strong enough to be okay with a bumpy ride. If not, then add in more bonds. Frankly though you are in an enviable position a a going investor. A market dump is exactly what someone in your position wants so you can buy on sale and léger reap the profit$.

MDM

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Re: Taxable brokerage allocations
« Reply #5 on: March 18, 2020, 08:45:30 PM »
See ETFs vs mutual funds - Bogleheads for that question.

Your asset allocation is really up to you.