Author Topic: Where to invest?  (Read 1914 times)

I'm a red panda

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Where to invest?
« on: May 19, 2015, 01:51:38 PM »
In the past, our taxable accounts have been with TIAA-Cref. Their fees aren't that high, but they are higher than Vanguard, so we thought we should open Vanguard accounts and see how they do, and then maybe eventually move the TIAA ones over.

I used their assset allocator on their website and this was the recommendations they gave me, for $40k.

36%    $14,400.00  VTSMX
24%    $9,600.00     VGTSX
28%    $11,200.00 VBMFX
12%    $4,800.00    VTIBX


At this point, I'm just looking for steady wealth growth, and to get the money out of a cash account where it is doing nothing.  No retirement plan or actual "need" for this.  I assume it will sit for at least 15 years, if not more.
We have way too much in cash because I'm fairly conservative and nervous about big drops- I'd assume that is why Vanguard gave me such a high bond percentage.  I'm okay with that.

It doesn't look like the website gave me admiral shares as a recommendation. But would it be better to substitute VTSAX for VTSMX?  Isn't it a 10k minimum? Is there a similar fund to VBMFX for admiral shares? VGTSX? (We could put a bit more than what is up there to reach the minimum.)  If you are only putting 10k in, is it worth using admiral shares? Because if it drops, they reclassify you- and this can drop daily. Do they change investor shares to admiral shares if it goes back up?

I've liked investing in Social Choice fund in the past, to keep my money out of guns and tobacco. Does Vanguard have funds people recommend like this?


With such a small amount (assuming we aren't buying admiral shares and don't need the 10k min.) would you recommend buying in slowly over time, $500 a month; or is it better to just buy it all right now so the money doesn't sit doing nothing any longer?

Other opinions?
« Last Edit: May 19, 2015, 01:59:36 PM by iowajes »

forummm

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Re: Where to invest?
« Reply #1 on: May 19, 2015, 02:43:57 PM »
I'd just buy all at once. This is for the long term, so if the market goes down in the meantime, it's not a big deal. It's more likely to keep going up. The Vanguard allocation looks fine. I agree about using VTSAX instead of VTSMX though. I don't know how old you are--that could be related to the bond percentage. But that's something you can adjust based on your risk tolerance. If the market drops 50% in 6 years, will you panic and sell? Or shrug and go on with your life?

I'm a red panda

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Re: Where to invest?
« Reply #2 on: May 19, 2015, 03:01:09 PM »
50%  Eek....  I don't know about that....

I'm fairly young though, so in theory, I should be good and hold on...

forummm

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Re: Where to invest?
« Reply #3 on: May 19, 2015, 04:29:40 PM »
The S&P500 dropped about 50% during the 2000 (dotcom) and 2008 (real estate/banking) crashes. Then it came back up over time. It's what stocks do. 20-30% crashes happen more frequently. It's a risk/reward game.

I've been investing since 2000 (when I learned what a Roth IRA was and why it was important). I've been 100% stocks since then. I'll probably stay 90+% stocks for decades. Your risk tolerance may be different. It's important to know that. Your bonds (at least those bond funds in your post) will probably not drop at all, and may actually increase, if there's a big market crash. So your total portfolio might only go down 20-25% in a huge crash if you have 40% bonds. That one of the big reasons a lot of people hold bonds.

I'm a red panda

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Re: Where to invest?
« Reply #4 on: May 19, 2015, 04:42:11 PM »
Wow, I didn't realize the crash was that big in 2008.  I didn't reallocated my portfolio when that happened, but that was just my 403b, I didn't have taxable accounts yet.