VTI, VOOAny recommendations on which to invest?
Looking for Index funds that are "set it and forget it" and low cost.
Thanks.
No, I'd probably pick one or the other. VTI is basically a weighted ETF of the entire US stock market (meaning that VOO, which is an ETF of the 500 largest US companies is a huge part of VTI). Basically VTI gives you exposure to some of the smaller companies outside the S&P 500. If you want to diversify outside of that you can look at VXUS which is an ETF of the rest of the world's markets, sans the US.Thank you.
Sorry, I'm new at this.
The ideal portfolio would 50/50 in these two? Look for diversification?
Any recommendations on which to invest?
Looking for Index funds that are "set it and forget it" and low cost.
Thanks.
No, I'd probably pick one or the other. VTI is basically a weighted ETF of the entire US stock market (meaning that VOO, which is an ETF of the 500 largest US companies is a huge part of VTI). Basically VTI gives you exposure to some of the smaller companies outside the S&P 500. If you want to diversify outside of that you can look at VXUS which is an ETF of the rest of the world's markets, sans the US.
If you really want to just set and forget and never touch it again, you should look into a target date fund, that is synchronized with your expected retirement year. This will automatically adjust your investments as you get older so you don't have to (increasing allocation to safer ones with regular interest payouts or dividends as you get older and your risk tolerance goes down). The tradeoff with this as opposed to picking the funds yourself is a slightly higher expense ratio, but if you don't know anything about the markets and don't really want to learn, it's probably the best option.
A well managed manual split will outperform a target date fund over time, both on paper and simply due to expense ratios being lower. Target date funds often have an allocation of bonds and other safe investments even early in your career which will normalize your returns somewhat, meaning less drawdowns, but also less booms.target date fund through retirement or some more manual split of index funds/bonds/cash buffer (in case of need to ride out a bear period)?
if a target date fund gets you 90% of the benefit without the manual overhead of managing drawdown strategies that would be good, but I don't want to leave returns on the table (within reason)
thoughts on VXUS? I have my roth IRA set to VTI/VXUS 75:25 split (I contribute to VOO with personal stocks). My 401K is also set by my employer to Vanguard's 2060 retirement target. All of these are similar so I'm wondering if I should diversify more (I have SCHX and SCHD with personal stocks as well as some other smaller ETFs)
What kinds of thoughts? It's exactly what it says on the tin. World stock market, cap-weighted, excluding US securities. Pair it with VTI, and you basically get the cap-weighted world stock market.
Keep in mind that VOO and SCHX are extremely close to being the same thing. Technically the former is an S&P500 tracker while the other isn't, but they're very similar and have extremely close correlation. Holding both isn't going to cause problems or anything, but don't assume that it's giving you any real diversification.(I have SCHX and SCHD with personal stocks as well as some other smaller ETFs)
I carry some VXUS as well for non-US exposure but I'm heavily overweight US because I think most economic and demographic factors heavily favor the US economy going forward. Europe is stagnant and has very few mega cap companies in sectors that are poised for growth, China is a mess and it's demographics are going to crater in the next few decades etc. India is where most of the ex-US growth is likely to come from imo.thoughts on VXUS? I have my roth IRA set to VTI/VXUS 75:25 split (I contribute to VOO with personal stocks). My 401K is also set by my employer to Vanguard's 2060 retirement target. All of these are similar so I'm wondering if I should diversify more (I have SCHX and SCHD with personal stocks as well as some other smaller ETFs)
What kinds of thoughts? It's exactly what it says on the tin. World stock market, cap-weighted, excluding US securities. Pair it with VTI, and you basically get the cap-weighted world stock market.
Currently the capitalization of the US market is about 50% bigger than that of the rest of the world, so a split of 60% VTI and 40% VXUS would approximately capture the full world stock market at their cap weights. That's also basically what VT is.
Or, since you mentioned that you're in Vanguard Target Retirement 2060, that's VTTSX. If you check the "Portfolio Composition" section, you'll notice that it holds VSMPX (institutional-class mutual fund version of VTI) and VTIAX (mutual fund version of VXUS) in a roughly 60-40 split.
The level of international inclusion in a portfolio has always been a heated conversation: it's how people who hate picking stocks pick fights. Very few people argue in favor of holding ex-US at greater than global cap weight, but quite a few prefer to overweight domestic, for a variety of reasons (mostly involving vaguely waving their hands at a chart of returns over the past ten years, prompting the other side of the argument to whip up a chart over a longer timescale and resume the vague gesturing).
Keep in mind that VOO and SCHX are extremely close to being the same thing. Technically the former is an S&P500 tracker while the other isn't, but they're very similar and have extremely close correlation. Holding both isn't going to cause problems or anything, but don't assume that it's giving you any real diversification.
Thank you for your inputsI carry some VXUS as well for non-US exposure but I'm heavily overweight US because I think most economic and demographic factors heavily favor the US economy going forward. Europe is stagnant and has very few mega cap companies in sectors that are poised for growth, China is a mess and it's demographics are going to crater in the next few decades etc. India is where most of the ex-US growth is likely to come from imo.
This video got me fucked up:
View: https://youtu.be/JlgMSDYnT2o
Obviously we don't know what will happen in the future, but due to inflation (which I think will run slightly higher than the historical average in the future), it will dramatically hurt the real world returns from bonds, making them more inherently risky than stocks.
The key thing here is that I don't think I will be phased by 40%+ draw downs to equities so I'm less likely to make any drastic decision that would hurt the overall performance of my portfolio from a long term perspective. I don't really get emotional when it comes to making selling decisions investing. My experience with crypto and stocks that have been manipulated by shorters have battle tested me 🤣.
I'm about 15 years away from early retirement target. My current allocation to total bond funds is 4.1% across my total portfolio and I currently have my 401K contributions set to 25% purchase of bonds. I was originally going to target 10% bonds total for my entire portfolio and then possibly shift to 20% for retirement. Contemplating if only having 5% or no bond allocation is the best move. I'm still leaning towards just getting to 10% allocation and then maintaining that in retirement (rather than increasing it 20%+).
Any thoughts? After viewing this video, would you consider changing your long term strategy?
Various mixed thoughts.
If you're expecting a standard retirement age of mid-60s, the general rule of thumb is to aim for 25x your annual expenses. This equates to a 4% withdrawal rate that historically will last for a 30 yr retirement.I'm so sorry for a stupid and probably commonly asked question.
Looking at opening roth's for my wife and I as I look at a potential job transition. I'm 38, and have only put the bare minimum into my work account... I'm embarrassed about where I'm at with saving...
From what I've read here and reddit I'm in way over my head in understanding this stuff. If I go with one of the big 3, I pick a target age and how much I can afford to put in per month and then set it and forget it? How much should I plan to have for retirement? A safe number. Pay bills. I'm not looking for anything crazy travel after retiring.
Sorry if this has been answered a million times. Just a stressful time for us and trying to fix financial ships during a rough time.