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80k posted:However, in my opinion, the best option for investors getting started is to open an account at a discount brokerage that has low trading commissions and then use ETF's for your portfolio instead of open-ended mutual funds. In general, you will have the lowest expense ratios from using ETF's, as well as have more trading flexibility (no account restrictions or minimums). You have access to ETF's from major companies like Vanguard, SSGA, Ishares, and more from which to build a very diversified portfolio covering any asset class you can think of. When I put my money into a Vanguard IRA account I am locked in to buying the things that Vanguard offers. In general this is not a bad thing but it limits my options. When my money goes into my IRA account, I still have to invest it in something - is that right? So when I automatically send money to Vanguard every month that money isn't necessarily being invested in a mutual fund? I selected the 2045 target fund - but do I need to actually purchase the fund with the money I put into the account every month? Vanguard charges for that? What you suggest is opening an account with OptionsHouse (I don't have 25k). When I send my money there it will sit there until I choose to invest in something with it. When I choose to invest in something (stock, fund, etc.) with the money in that account, I will pay 2.95 each time I purchase shares in a fund/stock etc. This is good because through OptionsHouse I can make many different kinds of investments that I would not make with Vanguard, at a lower cost. In theory if I pick the right investments I can outperform a mutual fund? How is this different from picking individual stocks and trying to beat the market? (Something I'm not convinced I can do, and if I did think I could do it I'm not sure I'd want to spend the requisite time to.) Also - EFT means Electronic Funds Transfer, correct? So you're saying I can transfer money around easily between my accounts? I'm trying to get a better grasp of the advice you're offering, please pardon the questions if they're dense.
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Dec 27, 2009 18:09
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ETFs are exchange-traded funds. You can get the same portfolio with ETFs that you could get with Vanguard funds, plus you have more options. The fee structure and how you maintain it is different (I would say more complex but I'm not sure because I've never used ETFs). It is different from picking individual stocks because an individual ETF is like an individual mutual fund, invested in potentially numerous stocks and bonds. It is easy to set up an automatic monthly investment into an IRA in a mutual fund like VFORX that doesn't require any interaction from you. I'm not sure how that would work with an ETF.
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Dec 27, 2009 18:28
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that one guy posted:When I put my money into a Vanguard IRA account I am locked in to buying the things that Vanguard offers. In general this is not a bad thing but it limits my options. When my money goes into my IRA account, I still have to invest it in something - is that right? So when I automatically send money to Vanguard every month that money isn't necessarily being invested in a mutual fund? I selected the 2045 target fund - but do I need to actually purchase the fund with the money I put into the account every month? Vanguard charges for that? - No, you are not locked into buying only Vanguard funds. There is a brokerage division that lets you invest in other fund families, stocks, bonds, ETF's, etc. It is free to invest in Vanguard mutual funds (provided you meet the minimums, and opt into e-delivery of statements). However, the brokerage commissions for accessing non-Vanguard funds is quite expensive, unless you qualify for the highest tier level of service (which requires $1M of household assets). - When you invest with Vanguard, the money has to go into some kind of mutual fund, even if it is just their money market fund. If you are automatically going into the 2045 Target Fund, then your money is going in there. Again, Vanguard doesn't charge for investing into Vanguard mutual funds. that one guy posted:What you suggest is opening an account with OptionsHouse (I don't have 25k). When I send my money there it will sit there until I choose to invest in something with it. When I choose to invest in something (stock, fund, etc.) with the money in that account, I will pay 2.95 each time I purchase shares in a fund/stock etc. This is good because through OptionsHouse I can make many different kinds of investments that I would not make with Vanguard, at a lower cost. In theory if I pick the right investments I can outperform a mutual fund? How is this different from picking individual stocks and trying to beat the market? (Something I'm not convinced I can do, and if I did think I could do it I'm not sure I'd want to spend the requisite time to.) My preference for ETF's over mutual funds is one of structure only. You don't need to meet fund minimums, nor do you have any account restrictions when you sell or buy shares. And they generally have lower expense ratios. Besides that, the strategy is the same: choose an asset allocation and buy-and-hold a diversified portfolio of ETF's. An ETF is the same as an index fund, just with different structure. Instead of having free purchases and sales (as with an open ended mutual fund), you have to pay commissions with a broker to buy shares of an ETF. That is the downside. But there are many upsides as mentioned above. that one guy posted:Also - EFT means Electronic Funds Transfer, correct? So you're saying I can transfer money around easily between my accounts? An ETF is an exchange traded fund. If you don't know what that is, then of course you are confused. Google them and learn a bit about the pros and cons of ETF's vs funds. Look, there is no problem with your original idea (going with Vanguard and investing in their funds). I recommend Vanguard a whole lot. But I felt a need to mention that I actually would recommend a different approach (that is, going with a discount broker and buying ETF's, even if the ETF's are Vanguard ETF's. Vanguard charges commissions for buying Vanguard ETF's, but not for their mutual funds).
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Dec 28, 2009 09:03
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slap me silly posted:ETFs are exchange-traded funds. You can get the same portfolio with ETFs that you could get with Vanguard funds, plus you have more options. The fee structure and how you maintain it is different (I would say more complex but I'm not sure because I've never used ETFs). It is different from picking individual stocks because an individual ETF is like an individual mutual fund, invested in potentially numerous stocks and bonds. The fee structure is quite simple. Most discount brokers have a flat fee for trades (should be $5 or less from a competitive online broker). And then you have a bid-ask spread, which is miniscule if you are dealing with highly liquid ETF's. Other than that, you have the expense ratio, just as you would with an open-ended mutual fund. Doing automatic monthly investments is probably not possible with most brokers. Plus, because of the commissions involved, you probably do not want to be making purchases monthly .
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Dec 28, 2009 09:34
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80k posted:An ETF is an exchange traded fund. If you don't know what that is, then of course you are confused. Google them and learn a bit about the pros and cons of ETF's vs funds. Look, there is no problem with your original idea (going with Vanguard and investing in their funds). I recommend Vanguard a whole lot. But I felt a need to mention that I actually would recommend a different approach (that is, going with a discount broker and buying ETF's, even if the ETF's are Vanguard ETF's. Vanguard charges commissions for buying Vanguard ETF's, but not for their mutual funds).
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Dec 28, 2009 17:35
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that one guy posted:I appreciate the clarification and your alternative recommendations. I know I have a lot to learn and I am happy to learn it. ETFs are on my radar and I'll be looking into them as I move forward. My reasoning is not complicated. Meeting fund minimums is tough for the beginning investor to diversify into several mutual funds (Vanguard has $3K minimums, some are $10K minimums). With ETF's you do not need to worry about minimums, provided you don't let commissions eat into your return. A few tips: - Use discount broker like OptionsHouse or WellsFargo (if you qualify for free PMA account with $25K total assets) to minimize commissions. - Reduce the number of transactions you make per year. Instead of monthly purchases, do quarterly or semiannually. Whereas with open-ended mutual funds, you can make tiny additional investments of $100 or so, with ETF's you want to buy in larger chunks if you pay a commission. - Use limit orders, especially on less liquid ETF's. Once your account size grows, the benefit of ETF's becomes more important because the lower expense ratio will start having significant savings. ETF's may not be for everyone, but everyone I know who has switched over to a primarily ETF portfolio is happy they changed. One of the greatest new inventions for the retail investor.
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Dec 28, 2009 18:01
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80k posted:- Use limit orders, especially on less liquid ETF's. Even for longer term investments? Can you give an example of how this becomes important for something like an IRA? I'm following the rest of what you said but this I didn't understand.
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Dec 28, 2009 18:39
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slap me silly posted:Even for longer term investments? Can you give an example of how this becomes important for something like an IRA? I'm following the rest of what you said but this I didn't understand. I'm talking about setting a limit order with the intention of immediate execution: i.e. set it at or below the current bid (if you are selling) or above the ask (if you are buying) quotes. With less liquid ETF's, this will help you avoid getting a very bad price, and has nothing to do with whether you are using an IRA or not. Do it during normal trading hours, preferably not too close to market open. Also don't leave stale limit orders, if the market moves away from you. Cancel it or reissue it closer to the current market price. Using stale limit orders with the hope of getting a better price than the current market price can work against you. Market makers treat them like free put options. If you want a lower price, better to watch the market and place your order when you expect it can be filled immediately.
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Dec 28, 2009 19:27
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80k posted:Using stale limit orders with the hope of getting a better price than the current market price can work against you. Market makers treat them like free put options. Is this true? Holy gently caress. This sounds extremely unethical to me.
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Dec 29, 2009 05:05
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Ravarek posted:Is this true? Holy gently caress. This sounds extremely unethical to me. If your limit order is marketable, you will get market price, so you are not vulnerable. I'm talking about stale limit orders, which stay on the books, and which market makers can see. Stale limit orders is a gift to market makers because you are willingly putting your cards out on the table. Calling them free options might be exaggerating because you can always cancel the limit order. But if you just leave them and walk away from the computer (or have a GTC order opened for days/weeks), you are engaging in similar asymmetric risk without earning a premium. A limit buy that is below the current ask leaves you unexposed if the stock goes up. If the stock moves sharply down below your limit, you will likely still have your order filled at the limit price. You could sell put options and earn a premium and accomplish the same thing. Same thing with a limit sell order. If the limit is above the current bid, you are exposed to the downside if the stock goes down. If it moves sharply up (above your limit price), you will likely still have your order filled at your limit price. You could have a covered call strategy and earn a premium for this. For longterm investors, my main point is to use marketable limit orders on thinly traded ETF's so as not to get screwed. But on the flipside, don't use limit orders for the purpose of trying to get better-than-market prices, unless you fully understand the game you are playing.
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Dec 29, 2009 08:23
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Could use a hand on I-bonds, still a little fuzzy despite reading through the IRS website So the interest rate consists of 2 parts, a fixed rate and a rate tied to inflation. If I purchase an I-bond then I will always get that fixed rate until I decide to cash it in. And the variable rate will match the CPI so I won't lose out on inflation. Right now the fixed rate for I bonds is 0.30% So purchasing an I-bond means that I will only get .3% growth above inflation for the amount that I put in. This sounds incredibly loving lovely. Granted, it is a great inflation hedge and a safe investment, but drat that is low. I was thinking of I-bonds for 2 reasons: 1) looked like a decent place to stash some portion of my emergency reserves. It is highly liquid and the early withdrawal penalties aren't stiff. However unlike putting it in a CD or high interest savings account, the I-bond is tax efficient 2) for my parents who are retiring and are interested in income preservation. The yield on the I-bond seems low compared to the current TIPS yield. Tax considerations won't be a big deal for them in retirement so the tax inefficiency with TIPS is less of a concern.
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Dec 30, 2009 07:04
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Happydayz posted:Could use a hand on I-bonds, still a little fuzzy despite reading through the IRS website The I-bond rate is lovely. You will likely eventually underperform inflation at that rate when you finally pay taxes upon redemption. If you are putting part of your emergency-fund in there, it likely is not meant to be a longterm holding. So the benefit of tax deferral over TIPS is not a great one. Main advantage of I-bonds is, of course, the put option (ability to redeem after 1 year, at a small cost). But if this is for the short-term, an inflation hedge is probably not so important. We are still facing strong deflationary forces. For an emergency fund, I'd stick with high quality short term muni's (Vanguard's Limited Term Tax Exempt Fund) if you are concerned about tax efficiency. I Bonds would be compelling for a longterm holding if the fixed rate rises closer to 2%. We are far from there right now.
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Dec 30, 2009 07:30
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That confirms my suspicion of the low I-bond rate. The Vanguard Limited Term Tax Exempt bonds do look appealing. Right now my emergency fund is in an ING account. I can deal with the low rate given the market, but my main concern was paying taxes on it. I'm set for some serious overtime in 2010 that will bump me up one, possibly even two, tax brackets. My only concern with bonds right now are the expected increases in the Fed interest rates. Am I correct in thinking that since these are short-term bonds that this will not be much of an issue?
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Dec 30, 2009 08:27
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Happydayz posted:That confirms my suspicion of the low I-bond rate. That fund has, if I recall correctly, a 2-2.5 yr duration. So there will be some sensitivity to interest rate hikes. For an immediate emergency fund, I'd stick with shorter term CD's or savings account. If this is an extended emergency fund or possible future downpayment for a home, then the muni fund is good. For a 1-3 yr holding period, I am not very worried about putting money in that fund, and is in fact, what I am doing right now.
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Dec 30, 2009 18:01
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80k posted:That fund has, if I recall correctly, a 2-2.5 yr duration. So there will be some sensitivity to interest rate hikes. For an immediate emergency fund, I'd stick with shorter term CD's or savings account. If this is an extended emergency fund or possible future downpayment for a home, then the muni fund is good. For a 1-3 yr holding period, I am not very worried about putting money in that fund, and is in fact, what I am doing right now. Yeah the money is a mix of emergency fund / home downpayment. I'll probably keep 3 months expenses in the online savings account and shift the rest to the muni fund. Thanks for the tip. Another question: my parents are planning for their retirement right now. They have a chunk of their nest egg that they know they won't need until around 10 years down the road. The exception might be for catastrophic medical coverage. Their tax rate will be low so tax concerns are not a big concern. Right now this money is in CD's and they are setting up a CD ladder. However my other thought was to put it into a mix of 5 and 10 year TIPs. The main concern for this money is preservation and inflation protection. Appreciation is nice, but not necessary. Wondering if TIPs is the optimal strategy or to stick with CD's. I-Bonds are another alternative for a short hold, with the added bonus that they seem more liquid then the alternatives once you pass the 1 and 5 year marks.
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Dec 30, 2009 19:12
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Happydayz posted:Yeah the money is a mix of emergency fund / home downpayment. I'll probably keep 3 months expenses in the online savings account and shift the rest to the muni fund. Thanks for the tip. 5-yr TIPS are yielding practically nothing, so I-bonds would be a superior choice for shorter-term needs, if you desire/need inflation protection. 10-yr and 20-yr TIPS are ok (better choice than nominal treasuries). But yields are still unattractive, so I would hesitate putting too much money into them. But retirees are sensitive to inflation and so should have a portion of their money in them. A CD ladder, some I-bonds, and a healthy chunk of 10-yr TIPS might be an optimum strategy. For a 10-yr horizon, it would not be unreasonable to add some equities. Consider Vanguard's Dividend Appreciation Index fund (VDAIX), which covers a rather elite group of US blue chip companies that have a history of paying and growing dividends. If they can handle volatility in NAV, the income should be reliable and well covered by earnings and cashflow. They can reinvest dividends for 10 years and then use the income when they start needing it.
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Dec 30, 2009 19:57
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I'm 21 and my girlfriend is 23. We have a combined income of $30,000, but will be taking a pay cut in this next year since we'll both be enrolled in university and won't be able to work as much. Regardless, we want to start saving for retirement, even though we can each probably only make half of the maximum contribution in this next year. Is it legal (and does it make sense) for us to both contribute to a single IRA? or are we meant to half-fund two separate IRAs?
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Dec 30, 2009 21:38
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elevatordeadline posted:I'm 21 and my girlfriend is 23. We have a combined income of $30,000, but will be taking a pay cut in this next year since we'll both be enrolled in university and won't be able to work as much. Regardless, we want to start saving for retirement, even though we can each probably only make half of the maximum contribution in this next year. Is it legal (and does it make sense) for us to both contribute to a single IRA? or are we meant to half-fund two separate IRAs? IRA's are individual accounts, so you cannot have an IRA in two names. If you are considering maxing out one person's account and forgoing the other person's, that is certainly possible, but really a bad idea. I read your post on the other thread about using a joint account with your GF, and whereas that is a bad idea, this idea is even worse. Just half-fund each.
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Dec 30, 2009 21:54
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80k posted:IRA's are individual accounts, so you cannot have an IRA in two names. If you are considering maxing out one person's account and forgoing the other person's, that is certainly possible, but really a bad idea. I read your post on the other thread about using a joint account with your GF, and whereas that is a bad idea, this idea is even worse. Just half-fund each.
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Dec 30, 2009 22:02
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80k posted:IRA's are individual accounts, so you cannot have an IRA in two names. If you are considering maxing out one person's account and forgoing the other person's, that is certainly possible, but really a bad idea. I read your post on the other thread about using a joint account with your GF, and whereas that is a bad idea, this idea is even worse. Just half-fund each.
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Dec 30, 2009 23:54
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that one guy posted:Why is it a bad idea to fully fund one? I'm guessing you mean it's because they might break up and then the money would be lost to the other, correct? Or is there some kind of "not maximizing gains" answer too? Yea, that's it, as hard as it may be to believe with those two lovebirds.
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Dec 30, 2009 23:58
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I figured, I was just making sure. Right now we're funding my wife's Roth IRA with all the IRA money we have and are waiting a little bit on opening one for me until we get some more saved up. I was making sure we weren't going to miss out on anything if we had less than 5k to contribute in a year and weren't splitting it up.
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Dec 31, 2009 00:22
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Is there somewhere I can find the market caps for different countries/regions (or ideally, the caps for indexes)? I can find some old references, but no up to date numbers and not in formats that are usable. I want to work out my US/International/Emerging/Canadian allocation. I'm using Vanguard funds, so I'd like to have the caps for the MSCI indexes.
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Dec 31, 2009 17:45
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EchoBase posted:Is there somewhere I can find the market caps for different countries/regions (or ideally, the caps for indexes)? I can find some old references, but no up to date numbers and not in formats that are usable. I want to work out my US/International/Emerging/Canadian allocation. I'm using Vanguard funds, so I'd like to have the caps for the MSCI indexes. Vanguard's Fund Profile > Portfolio & Management. Example Scroll down and you will see percent weightings for every country. Morningstar's Fund profile also has information on regional exposure (again, scroll down). Example You'll find the Vanguard site more accurate though. You might want to also check the MSCI website.
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Dec 31, 2009 18:59
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Hey 80k, How much REIT exposure would you say is reasonable for a retail investor?
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Jan 1, 2010 19:11
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Ravarek posted:Hey 80k, I've been going back and forth on this myself. I would like some REIT exposure, however if you hold the Vanguard Total Stock Market Index you already have around 2.5% of that in REITs. So anything over that is tilting your exposure toward REIT's above and beyond what their market share is
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Jan 1, 2010 21:22
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On REITs, I think anything from 0% (beyond TSM weighting) to 10% of total portfolio is ok. I've been market timing RWX and VNQ so I am not the best person to ask on this. If you are adding new money, I would tread carefully. Given the problems facing the REIT sector in the short-term, I would have a DCA plan that gets you fully invested in your target allocation over the span of 2-3 years.
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Jan 1, 2010 21:54
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Worked out what my long term retirement asset allocation is. Out of 100% quote:Taxable Account Roughly works out to 70% equities (60-40 US-Int'l split), and 30% fixed income Elsewhere I have 3 months income in emergency reserves, and another pot of money in the Vanguard Limited-Term Tax Exempt Bond Fund for a possible future home down payment. Future contributions will come from TSP / 401(k) contributions and annual Roth IRA contributions. These contributions will reflect my desired allocation. Things are kind of screwy right now because I had to jigger things around to maximize tax efficiency as well as tap into the G fund. Don't predict putting anything else into a taxable long-term account. Only two uncertain things on my end; the bond allocation and the equity split. For bonds - I really like the G fund. Principal is guaranteed, interest rate adjusts on a monthly basis, and it yields about what a 9-10 year Treasury gives. The 10% in the Total Bond index is because I wanted a 30% bond allocation but only had enough room in my TSP for 20%. Not sure what to do with this 10% TBM stake for the long term. Future bond contributions will likely all be in the G fund. But I have this gut feeling that I should still hold some corporate issued bonds instead of just Treasuries, even if I am getting a great deal. If I decide for all G fund I am not sure if I should keep the TBM holding and let it shrink as a percentage of my portfolio, or actively swap it out for G fund holdings as my TSP portfolio grows (could make this swap happen with 6 additional months of TSP contributions). As for equity stake - I am tilted toward the US domestic market. Since the global equity split is 40% US / 60% international, I should hold a 40-60 split instead of 60-40 if I wanted to reflect the market. Still undecided about whether I want to tilt toward the US or not, or perhaps split difference with a 50-50 allocation. If I do change to a 50-50 or 40-60 allocation I would probably do a gradual change through TSP contributions rather then sell domestic stocks for international ones. This is mainly to avoid paying capital gains as this exchange would have to occur from within my taxable account. I'm tempted to diversify further with some REITs or a commodity fund, but I already have market-weighted exposure due to my holding the Total Stock Market Index. For what it's worth - I'm going to pay the money and get CFP assistance through Vanguard before I make this move. But I wanted to sound it out here first
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Jan 2, 2010 02:11
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I would prioritize FTSE All World Ex-US Stock Index in taxable so you can fully claim the foreign tax credit. Move a portion of domestic stocks into your Roth instead.
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Jan 2, 2010 02:46
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80k posted:I would prioritize FTSE All World Ex-US Stock Index in taxable so you can fully claim the foreign tax credit. Move a portion of domestic stocks into your Roth instead. I thought of that. My concern is having to pay capital gains. Most of the shares were purchased when the Dow was around 8500. Capital gains would be about 3.5% of the total value. I wasn't sure how valuable the foreign tax credit was, and whether ~35 years of slightly increased tax efficiency outweighed taking a 3.5% haircut today.
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Jan 2, 2010 07:42
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Happydayz posted:I thought of that. My concern is having to pay capital gains. Most of the shares were purchased when the Dow was around 8500. Capital gains would be about 3.5% of the total value. No it is not worth switching then.
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Jan 2, 2010 09:18
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Anyone care to comment on my portfolio? I'm trying to decide what to do with my 2010 IRA contribution. I have been toying with the idea of splitting my US stocks into small/large cap. I'm not quite sure how much I should increase my bond allocation to offset the added risk. I looked up Larry Swredroe's portfolio, but I don't know if I could pull that off. Right now I have about 16K in my IRA. The 3K minimum for NAESX is about 15% Current: VBMFX 25% (Total Bond) VGTSX 37.5% (Total International) VTSMX 37.5% (Total US Stock) Idea for 2010: VBMFX 35% (Total Bond) VGTSX 25% (Total International) VLACX 25% (Large Cap Index) NAESX 15% (Small Cap Index)
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Jan 2, 2010 22:32
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I'm in the process of transferring a Traditional IRA account from State Farm to Vanguard. It's in the vicinity of 4k. I'm thinking I want to convert it to a Roth IRA once the money is finally transferred but I'm a bit wary of the possible costs involved. Is it worth it to convert it?
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Jan 3, 2010 05:43
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80k posted:
Are you referring to the huge wave of mortgage resets coming in the next year?
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Jan 3, 2010 15:47
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that one guy posted:I'm in the process of transferring a Traditional IRA account from State Farm to Vanguard. It's in the vicinity of 4k. I'm thinking I want to convert it to a Roth IRA once the money is finally transferred but I'm a bit wary of the possible costs involved. Is it worth it to convert it? That's not a very large amount. You can always just keep it and put future money into a Roth, of course. fool.com has a calculator for this: http://www.fool.com/calcs/calculators.htm#roth
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Jan 3, 2010 16:46
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Ravarek posted:Are you referring to the huge wave of mortgage resets coming in the next year? Lots of things bother me about REITs right now. In general, they've temporarily avoided going out of business with substantial equity raising since March, but there is going to have to be a lot more of it in the coming year if they are to meet their debt maturities. My belief is that the nearterm refinancing problems could be catastrophic for the sector, and current valuations may not reflect that. As a result, there is a high likelihood of a wave of distressed selling among public and especially private commercial RE companies in the coming years, meaning still major downside in property values. RE transaction volume is still understandably very low, as investors are still trying to digest major tenant defaults and dramatically reduced occupancy across all of the REIT subsectors. Prices and cashflow need to stabilize before a real recovery can happen. Current yield is unsustainable. It is troubling that dividends are higher than operating income and being supported by raised equity among many REITs. There is still substantial net selling among insiders. Valuations in general are not even attractive, despite all the problems. Nowhere near the valuations at the bottom of the 90's RE crash. Maybe longterm, RE has diversification benefits, but I can't help but feel there are better places to put your money. edit: this discussion doesn't really belong in this thread. I'll give my opinion when asked but it is always better to stick to your longterm plan than to believe the prognostications of someone on the internet. 80k fucked around with this message at 21:06 on Jan 3, 2010 |
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Jan 3, 2010 20:59
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that one guy posted:I'm in the process of transferring a Traditional IRA account from State Farm to Vanguard. It's in the vicinity of 4k. I'm thinking I want to convert it to a Roth IRA once the money is finally transferred but I'm a bit wary of the possible costs involved. Is it worth it to convert it? Why do you want to convert it? You should have a clear reason, based on current vs future tax brackets. Otherwise, there is no harm in leaving it alone.
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Jan 3, 2010 21:00
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ZeroAX posted:Anyone care to comment on my portfolio? I'm trying to decide what to do with my 2010 IRA contribution. I have been toying with the idea of splitting my US stocks into small/large cap. I'm not quite sure how much I should increase my bond allocation to offset the added risk. I looked up Larry Swredroe's portfolio, but I don't know if I could pull that off. That sounds ok and is a fair adjustment in equity/bond ratio in response to the greater risk from small-tilting. You might find the Small Value index fund to provide better diversification though, since you are investing in Roth and are not concerned about tax efficiency.
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Jan 3, 2010 21:07
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80k posted:Why do you want to convert it? You should have a clear reason, based on current vs future tax brackets. Otherwise, there is no harm in leaving it alone.
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Jan 4, 2010 14:06
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2 quick questions about TFSAs, I guess this is the right thread? -I opened a TFSA savings account through ING just this December. I have been led to believe that I get the whole $5000 contribution room from 2009 because of this? So when added to my 2010 limit, I could theoretically put $10000 into my TFSA tomorrow? Then another $5000 on Jan 1 2011? -If I put $10000 into a TFSA today, in the summer the account will be sitting at $10050 or whatever. I now want to buy a car/yacht/airplane, I take out $6000 to do it. 2 months later I win the lottery or something, I can just put $6000 right back in right? My only loss is the 2 months of interest on $6000?
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Jan 4, 2010 18:34
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