Author Topic: Vanguard vs TIAA-Cref advice  (Read 5638 times)

I'm a red panda

  • Walrus Stache
  • *******
  • Posts: 8011
  • Location: United States
Vanguard vs TIAA-Cref advice
« on: July 15, 2015, 07:13:27 AM »
For taxable investments, we recently stopped adding to our TIAA-Cref funds and opened Vanguard funds because we liked the lower fees better.  We didn't transfer the old accounts because for now it just seemed easier to leave them.

In TIAA-Cref, we hold the following equities: TSALX (Lifestyle Aggressive), TSMLX (Lifestyle Moderate), TICRX (Social Choice), and we have TSBRX (Social Choice Bonds).

In Vanguard, we have VBTLX, VTIBX, VTIAX, VTSAX.  The allocation is slightly more international, and slightly more bonds.

Now my issue: The vanguard account has only lost money since we opened it.  Not a big deal- it is going to be a long term thing, I'm sure it will go up.  (This is the US funds too, not just the internationals.)  However, in the same period- we've made money with TIAA-Cref.

If TIAA-Cref is making us money, and Vanguard isn't- it doesn't matter that the fees are lower.

Would you stick with Vanguard for the long term? Or start putting our biweekly deposits in TIAA-Cref again?
« Last Edit: July 15, 2015, 07:32:46 AM by iowajes »

I'm a red panda

  • Walrus Stache
  • *******
  • Posts: 8011
  • Location: United States
Re: Vanguard vs TIAA-Cref advice
« Reply #1 on: July 15, 2015, 07:31:00 AM »
I have TIAA-CREF for my work (and for past jobs too) 401k and we do Vanguard for the post-tax saving bit. I assume you no longer have TIAA-CREF for your job (pretax)? In any case, where you park cash depends on your allocation plan. Need more info, I think, before people can concretely advise you.

No, my pretax is all in TIAA-Cref; as all my jobs, including my current one, have used that.  I don't believe I have any sort of options there. I am only asking about my taxable accounts.  Sorry, I wasn't clear about that.  When I do my investments I generally ignore the 403b, since I have no intention of touching it for a very long time- this is "cash" only.  I've edited to make this more apparent.

What particular information do you need about my allocation plan? Right now, for taxable investments, we are balanced 80/20 across both accounts, but Vanguard is a bit heavier in bonds than TIAA-Cref to achieve that. 
« Last Edit: July 15, 2015, 07:33:46 AM by iowajes »

forummm

  • Walrus Stache
  • *******
  • Posts: 7396
  • Senior Mustachian
Re: Vanguard vs TIAA-Cref advice
« Reply #2 on: July 15, 2015, 07:40:42 AM »
In TIAA-Cref, we hold the following equities: TSALX (Lifestyle Aggressive), TSMLX (Lifestyle Moderate), TICRX (Social Choice), and we have TSBRX (Social Choice Bonds).

In Vanguard, we have VBTLX, VTIBX, VTIAX, VTSAX.  The allocation is slightly more international, and slightly more bonds.

Now my issue: The vanguard account has only lost money since we opened it.  Not a big deal- it is going to be a long term thing, I'm sure it will go up.  (This is the US funds too, not just the internationals.)  However, in the same period- we've made money with TIAA-Cref.

If TIAA-Cref is making us money, and Vanguard isn't- it doesn't matter that the fees are lower.

You're thinking about this wrong. You've invested in funds that track different indexes. You can't make apples-to-apples comparisons that way. Lower fee is the way to go. Stick with your AA across all accounts. Sometimes Intl > US, sometimes US > Intl. You can't predict when that will happen. Don't worry about the short term. Over the long run more diversification and lower fees are better. Don't even look at your account balances. The Vanguard funds you have are all good ones. Just keep saving.

TheThirstyStag

  • Bristles
  • ***
  • Posts: 301
Re: Vanguard vs TIAA-Cref advice
« Reply #3 on: July 15, 2015, 07:57:48 AM »
If have regular, non-tax-advantaged accounts in both TIAA-CREF and Vanguard, then I would suggest you transfer the taxable funds in T-C to your Vanguard account.  T-C has decent expense ratios, but you can find comparable funds in Vanguard at a much cheaper price.

forummm is right in that you are not making an apples-to-apples comparison, as they are tracking different indexes.  If you had invested in the T-C funds analogous to VBTLX, VTIBX, VTIAX, VTSAX, you would have seen similar losses. 

I'm a red panda

  • Walrus Stache
  • *******
  • Posts: 8011
  • Location: United States
Re: Vanguard vs TIAA-Cref advice
« Reply #4 on: July 15, 2015, 08:02:32 AM »
forummm is right in that you are not making an apples-to-apples comparison, as they are tracking different indexes.  If you had invested in the T-C funds analogous to VBTLX, VTIBX, VTIAX, VTSAX, you would have seen similar losses.

So is it just that over the long term I can't expect the T-C funds to do as well as an index?  Because, if they are tracking different indexes, maybe those ones are BETTER funds if they are still making me money when the market as a whole is dropping.


(edit: index and fund are not synonyms)
« Last Edit: July 16, 2015, 09:43:34 AM by iowajes »

TheThirstyStag

  • Bristles
  • ***
  • Posts: 301
Re: Vanguard vs TIAA-Cref advice
« Reply #5 on: July 15, 2015, 08:11:00 AM »
forummm is right in that you are not making an apples-to-apples comparison, as they are tracking different indexes.  If you had invested in the T-C funds analogous to VBTLX, VTIBX, VTIAX, VTSAX, you would have seen similar losses.

So is it just that over the long term I can't expect the T-C funds to do as well as an index?  Because, if they are tracking different indexes, maybe those ones are BETTER indexes if they are still making me money when the market as a whole is dropping.

No, there are many T-C funds that are index funds.  You just haven't selected any of them.  For example, the T-C index fund comparable to VTSAX would be TIEIX.  The T-C index fund comparable to VTIAX would be TCIEX, etc.


spokey doke

  • Pencil Stache
  • ****
  • Posts: 513
  • Escaped from the ivory tower basement
Re: Vanguard vs TIAA-Cref advice
« Reply #6 on: July 16, 2015, 09:42:19 AM »
And just for reference sake, there are now a number of index funds from T-C that have quite low expense ratios. Here are a few that I have access to:

TILIX: .06
TIEIX: .05
TISPX: .06
TCIEX: .06

TheThirstyStag

  • Bristles
  • ***
  • Posts: 301
Re: Vanguard vs TIAA-Cref advice
« Reply #7 on: July 16, 2015, 10:01:35 AM »
And just for reference sake, there are now a number of index funds from T-C that have quite low expense ratios. Here are a few that I have access to:

TILIX: .06
TIEIX: .05
TISPX: .06
TCIEX: .06

Those are great expense ratios.  Gotta love institutional class, if your employer is large enough.

I'm a red panda

  • Walrus Stache
  • *******
  • Posts: 8011
  • Location: United States
Re: Vanguard vs TIAA-Cref advice
« Reply #8 on: July 16, 2015, 10:44:45 AM »
And just for reference sake, there are now a number of index funds from T-C that have quite low expense ratios. Here are a few that I have access to:

TILIX: .06
TIEIX: .05
TISPX: .06
TCIEX: .06

I don't have any of those things available through my employer.
0.375% is the lowest thing available to me now, with an equity index (My current, and former employers, are now all R2 classified.)

And since those are institutional class, I don't believe I am able to put taxable investments into them- which is what I am asking about in this thread.

forummm

  • Walrus Stache
  • *******
  • Posts: 7396
  • Senior Mustachian
Re: Vanguard vs TIAA-Cref advice
« Reply #9 on: July 16, 2015, 03:34:46 PM »
For taxable, you won't find anything better than Vanguard. Don't be fooled by short term fluctuations in value. Don't even look at them. Just keep buying. Over the long run the lowest fees are the best options. You could potentially increase long term returns with riskier funds--but they are also riskier. Just VTSAX and relax. (And VTIAX, etc--they just didn't rhyme).