The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: daveydinner on August 21, 2014, 10:47:54 AM
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I have about $7k in my HSA which allows me to invest via TD Ameritrade brokerage online. Most all of it is already in VTSMX.
Since finding MMM, I've started Maxing it.
Question: Should I move it all over to VTI - Vanguard's sister ETF?
VTI says expense ratio is 0.05% "Commission Free"
VTSMX says 0.17% and is "No Load"
Seems like VTI is the better deal if the expense is less, but holds the same total market. Or am I missing something?
I'll be investing in chunks of $500 - $1000 between my contributions and my employers. Moving the money over from the HSA every few paychecks.
I searched for this topic and found an older thread that didn't quite answer my question.
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The only advantage I see would be if the investments in the mutual fund could be automated. Otherwise, yeah I'm going with VTI here. (or maybe VT (total world), ideally I would go about 60/40 in VTI/VXUS, but annoyingly TDAmeritrade doesn't offer VXUS (total international) for free in their brokerage account)
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I like vti because I can use the dividends to invest in other funds (I have it going to vti currently, but if I want to rebalance, it's easier than selling shares since I can redirect dividends to buy the other ones I want to go to
mutual funds reinvest in themselves so I can't rebalance this way
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I like vti because I can use the dividends to invest in other funds (I have it going to vti currently, but if I want to rebalance, it's easier than selling shares since I can redirect dividends to buy the other ones I want to go to
mutual funds reinvest in themselves so I can't rebalance this way
On my vanguard page it says I can reinvest the dividends/capital gains from VTSAX to any fund I have open in any account. So, this is probably brokerage dependent.
Pros of mutual funds
* can buy fractional shares (not always possible with ETFs)
* "easier" (no buy/ask spread to understand, you just buy $X at the NAV at the end of the day)
Pros of ETFs
* can buy/sell any time during the day.
* typically cheaper if you don't have access to admiral/institutional shares
So, VTI if you can buy fractional shares, otherwise I'd stick with VTSMX just for the simplicity of buying by $ amount. Or maybe a combination of both. Use VTSMX to hold your incoming cash (so it all gets invested) and then every quarter/year move over to VTI whatever you can.