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Learning, Sharing, and Teaching => Investor Alley => Topic started by: YoungStache on February 28, 2017, 05:39:40 PM

Title: Vanguard investment stock choice
Post by: YoungStache on February 28, 2017, 05:39:40 PM
Which Vanguard fund would you guys invest in now given current prices? I am a bit hesitant to invest in VTSAX due to it having grown so much in such a short amount of time.

VTSAX?

VTIAX?

or another Vanguard fund?
Title: Re: Vanguard investment stock choice
Post by: the_gastropod on February 28, 2017, 06:44:56 PM
You're probably thinking too short term here. In 30 years, they will both be up significantly. Choose an asset allocation—not based on current prices or recent performance—and stick to it. Rebalance about once per year. Simplicity reigns supreme.
Title: Re: Vanguard investment stock choice
Post by: Radagast on February 28, 2017, 09:34:11 PM
In the short term, you cannot predict. In the long term, some combination of both is likely best. In the intermediate term it is hard to say but VSIAX is possibly better, or maybe not. Solution: 50:50.
Title: Re: Vanguard investment stock choice
Post by: YoungStache on March 01, 2017, 02:35:12 AM
I'm 100% stocks asset allocation. About 50/50 vtsax and vtiax. Any other vanguard funds you guys recommend? Like something undervalued?
Title: Re: Vanguard investment stock choice
Post by: Mr Mark on March 01, 2017, 03:17:04 AM
I'm 100% stocks asset allocation. About 50/50 vtsax and vtiax. Any other vanguard funds you guys recommend? Like something undervalued?

define 'undervalued'? With thousands of full time stock analysts and professional money managers out there, all highly focused on finding unidentified value, with analytical resources we can't even imagine, how do you rate our chances?

If you're 50/50 on those 2 funds that's IMHO a very heavy international ratio, as VTIAX excludes the US and has been v poor performing since 2013 relative to US.

Also, you come across as pretty nervous about current stock valuations for someone committed to a 100% stock allocation. ;-) Will you keep to that if we get a 40% correction this year?



Title: Re: Vanguard investment stock choice
Post by: MustacheAndaHalf on March 01, 2017, 05:36:14 AM
The world is roughly 50% US and 50% international, so your allocation is fine.  For most people 50% international is too high because they haven't held their allocation very long.  So make sure you're confident in keeping this allocation when the U.S. beats international.  Most investors have a home country bias that keeps them from matching the world weights like you're doing.
Title: Re: Vanguard investment stock choice
Post by: Indexer on March 01, 2017, 06:10:07 AM
Like everyone else has said, both are good. Combined they represent over 9,000 stocks. Yes, some might be expensive today. Where will it be in 20 years?  Likely up, and likely up a lot.

For allocation:  The world is roughly 50/50.

I am 60% domestic, 40% international. There are several good research papers that show this split lowers the volatility of your portfolio more than other allocations. If you are 100% stocks then a 70/30 split accomplishes about the same thing.

(http://i.imgur.com/BLwuiAT.jpg)
source:https://personal.vanguard.com/pdf/icriecr.pdf
Title: Re: Vanguard investment stock choice
Post by: seanmerron on March 01, 2017, 06:34:31 AM
You have to understand your desired asset allocation and just rebalance from time to time and ignore the noise.

What's your desired percentage split between US, International, Stocks and Bonds? Don't try to time the market.
Title: Re: Vanguard investment stock choice
Post by: I'm a red panda on March 01, 2017, 07:38:54 AM
My vanguard account is 60/40 domestic/international, but my actual portfolio is closer to 80/20, since I only hold international stocks in taxable accounts.
Title: Re: Vanguard investment stock choice
Post by: YoungStache on March 01, 2017, 12:54:09 PM
So now that the US is beating international so much, am I supposed to buy more international since US prices are so high? And since I'm already 100% stocks, there's nothing to rebalance right?
Title: Re: Vanguard investment stock choice
Post by: I'm a red panda on March 01, 2017, 12:55:36 PM
So now that the US is beating international so much, am I supposed to buy more international since US prices are so high? And since I'm already 100% stocks, there's nothing to rebalance right?

What does your asset allocation say about US vs. international?  Follow that.
Title: Re: Vanguard investment stock choice
Post by: seanmerron on March 01, 2017, 01:41:41 PM
So now that the US is beating international so much, am I supposed to buy more international since US prices are so high? And since I'm already 100% stocks, there's nothing to rebalance right?

No. You need to know what % of your portfolio you want as international and what % as US to help diversify and stay within those percentages.