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SpelledBackwards posted:Your heart's in the right place, but I'm gonna get super pedantic here and note that a stock/bond ratio of 15% is not at all what you meant. That would mean 15/100 = 3/20 which would mean holding 3% allocated to stocks for every 20% in bonds. ...So what should I be doing, then?
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# ? Aug 23, 2016 21:19 |
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# ? Apr 17, 2024 01:15 |
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Ignoranus posted:...So what should I be doing, then? He was just razzing me for my word choice, not saying anything about the 85% stock / 15% bond portfolio allocations.
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# ? Aug 23, 2016 21:22 |
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Greetings y'all. I'm currently invested in Vanguard's retirement fund (VFIFX) and I'm looking to invest in another fund. I want something very similar to my Roth account and basically having it on auto pilot. I'm thinking 10k should be a pretty good amount to start off with.
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# ? Aug 24, 2016 11:03 |
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obi_ant posted:Greetings y'all. So are you leaving the VFIFX fund or you want to just diversify into another similar fund that is managed elsewhere? Is this also in a Roth? An IRA? A brokerage?
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# ? Aug 24, 2016 14:00 |
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obi_ant posted:Greetings y'all. Have you maxed out your tax advantaged space?
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# ? Aug 24, 2016 14:30 |
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Nephzinho posted:So are you leaving the VFIFX fund or you want to just diversify into another similar fund that is managed elsewhere? Is this also in a Roth? An IRA? A brokerage? Nope, I wanted to stick with Vanguard, just wanted another fund on top of the VFIFX, it's a target retirement fund. It's a Roth. KYOON GRIFFEY JR posted:Have you maxed out your tax advantaged space? I have not, but the 401k expense ratio from my work place is fairly high compared to Vanguard. It do contribute to the max employer match.
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# ? Aug 24, 2016 15:31 |
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obi_ant posted:Nope, I wanted to stick with Vanguard, just wanted another fund on top of the VFIFX, it's a target retirement fund. It's a Roth. If you have a specific reason for putting money into another fund, ie. the target retirement is too aggressive or not aggressive enough for you, then fine. If you just want to find any other fund so you can have 2 funds without understanding the ramifications on your asset allocation, you're better off just putting that money in the target fund. e: a target retirement fund itself is made up of multiple other funds, they're all just collected under one ticker symbol Gray Matter fucked around with this message at 16:34 on Aug 24, 2016 |
# ? Aug 24, 2016 16:27 |
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obi_ant posted:Nope, I wanted to stick with Vanguard, just wanted another fund on top of the VFIFX, it's a target retirement fund. It's a Roth. What are the funds and ratios available with your employer? They would have to be pretty bad to justify paying taxes when you have tax advantaged space available.
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# ? Aug 24, 2016 20:09 |
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Leon Trotsky 2012 posted:What are the funds and ratios available with your employer? They would have to be pretty bad to justify paying taxes when you have tax advantaged space available. Yeah like 2-2.5% bad.
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# ? Aug 24, 2016 20:30 |
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Gray Matter posted:Typically a target retirement fund should be used with an all or nothing mindset. Either you put all your retirement dollars into it, or none of them and create your own portfolio using other funds. Reason being, target funds have specific ratios of equities and fixed income assets designed to automatically adjust your risk exposure downward as you get closer to the retirement year. I'm maxing out my Roth through Vanguard every year and I'm putting ~15% into my work's 401k. I was under the impression that because the fees were "high" through my work place, I should probably have another account on top of everything I already have (with lower fees). Cause the 10k I want to invest in is just "sitting around". But it seems what you're saying is that I should put the money into my work's 401k anyway. Leon Trotsky 2012 posted:What are the funds and ratios available with your employer? They would have to be pretty bad to justify paying taxes when you have tax advantaged space available. Looks like they have standard target accounts ranging from from .50%-.60%. Looks like these funds are available to me as well. Large U.S. Equity American Beacon Large Cap Val BlackRock Equity Index T Jennison Large Cap Growth Mid U.S. Equity RidgeWorth Mid Cap Value Eq TimesSquare Mid Cap Growth BlackRock Extended Equity Market Index T Small U.S. Equity Prudential Jennison Small Co Z Phocas Small Cap Value GIC/Stable Value Stable Value Fund International MFS International Equity
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# ? Aug 24, 2016 21:39 |
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Can you post the ER for each fund? I'm pretty sure I would still max my 401k if the ER was nearing 0.8%... And complain to the 401k committee.
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# ? Aug 24, 2016 21:45 |
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obi_ant posted:I'm maxing out my Roth through Vanguard every year and I'm putting ~15% into my work's 401k. I was under the impression that because the fees were "high" through my work place, I should probably have another account on top of everything I already have (with lower fees). Cause the 10k I want to invest in is just "sitting around". But it seems what you're saying is that I should put the money into my work's 401k anyway. Read this! It covers exactly your concern - http://jlcollinsnh.com/2013/06/28/stocks-part-viii-b-should-you-avoid-your-companys-401k/ I'm still not sure what your reasoning is behind wanting a new fund in addition to VIVFX. I'm not saying that you shouldn't, I just want to know what it is that you want to achieve by adding additional funds? Unless... by "funds" do you mean $$$ into your existing accounts, and not "new mutual funds"?
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# ? Aug 24, 2016 21:45 |
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obi_ant posted:I'm maxing out my Roth through Vanguard every year and I'm putting ~15% into my work's 401k. I was under the impression that because the fees were "high" through my work place, I should probably have another account on top of everything I already have (with lower fees). Cause the 10k I want to invest in is just "sitting around". But it seems what you're saying is that I should put the money into my work's 401k anyway. Those Target Date funds aren't especially great options, but they aren't horrible. The Blackrock funds have a super low expense ratio. You should definitely park whatever extra you want in the Blackrock Mid and Large cap funds. 0.03 and .11 ER are very low and give you a good spread with your limited options. The target date funds aren't horrible either, but those fees are a little high compared to Vanguard's .17 With your options you should definitely be parking excess money in the 401k and not a taxable account for sure.
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# ? Aug 24, 2016 21:59 |
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GoGoGadgetChris posted:Read this! It covers exactly your concern - http://jlcollinsnh.com/2013/06/28/stocks-part-viii-b-should-you-avoid-your-companys-401k/ Thanks for the link. I'll read it later tonight. My reasoning is because I have this "extra" money sitting in a savings account making 0.75% and I figured it might as well do better in the long run, cause I'm not going to be doing anything with the money. Leon Trotsky 2012 posted:Those Target Date funds aren't especially great options, but they aren't horrible. Thanks. I'll do some math and see what what is a reasonable amount to increase my contributions to in my 401k.
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# ? Aug 25, 2016 01:21 |
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obi_ant posted:Thanks for the link. I'll read it later tonight. I think the confusion is over why you're not just investing in the same fund in your taxable account as you do in your 401k.
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# ? Aug 25, 2016 01:29 |
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Doesn't help that Additional Funds can mean "more shares of the same fund" or "shares of new funds"
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# ? Aug 25, 2016 01:39 |
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I put non-retirement funds in a target fund at Vanguard while I waited for the new year and then transferred it to my Roth IRA. Doing that with the 10k would probably be fine. And then boost your 401k contributions up.
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# ? Aug 25, 2016 02:17 |
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I kinda have a macro level question about passive investment and I'd like someone to explain to me where I'm going wrong in my thinking. As more and more active investors get out of the market or switch over to roboinvestors or ETFs, does this mean that the dwindling number of active traders left in the market will be able to exert outsized influence on the movement of stocks or that the overall market will become less efficient since many more factors won't be getting "priced in" to the value of the stock owing to the diminished number of bettors speculating/making informed guesses? I.E. Imagine a market with 100,000 stocks and 1000 investors. Let's say 999 of the investors are using ETFs and auto-rebalancing based on the performance of the top 1,000 stocks. Since there are no other bettors, all stock performance is the same until the active investor purchases a share because he likes the ticker symbol, at which point the ETFs rebalance and amplify that one trader's decision many times over by purchasing up the "rising" stock and incorporating into the top 1,000. Seems like I'm going awry somewhere in my thinking, but I'm not sure where.
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# ? Aug 25, 2016 03:32 |
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El Mero Mero posted:I kinda have a macro level question about passive investment and I'd like someone to explain to me where I'm going wrong in my thinking. The one active investor would have nobody to buy or sell from but long term yes passive investing's growth will lead to liquidity issues and manipulability. S&P indexes are cap weighted and in a scenario where the vast majority of a stock was held by passive index funds a small number of actively traded shares could control the price and market cap. I like this thought experiment and it feels like the winning move would be to pump #501 and dump #500 to trigger an index composition change and massive institutional buying. Kind of like a short squeeze.
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# ? Aug 25, 2016 03:57 |
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El Mero Mero posted:I kinda have a macro level question about passive investment and I'd like someone to explain to me where I'm going wrong in my thinking. This is a pretty common question on Bogleheads. The current theory is that if enough people indexed, there would be market inefficiencies created that active management could exploit. shame on an IGA posted:The one active investor would have nobody to buy or sell from but long term yes passive investing's growth will lead to liquidity issues and manipulability. S&P indexes are cap weighted and in a scenario where the vast majority of a stock was held by passive index funds a small number of actively traded shares could control the price and market cap. I like this thought experiment and it feels like the winning move would be to pump #501 and dump #500 to trigger an index composition change and massive institutional buying. Kind of like a short squeeze. There are people who do something like that now (buy new entries into the S&P 500 and sell once the fund has bought it.) It's called index front-running. It's a good reason to buy a total market fund.
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# ? Aug 25, 2016 04:05 |
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El Mero Mero posted:I kinda have a macro level question about passive investment and I'd like someone to explain to me where I'm going wrong in my thinking.
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# ? Aug 25, 2016 06:12 |
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Ralith posted:By definition, if this got far enough along to be a problem then there'd be tons of easy money to be made in active management to draw people back towards it, so it's probably self-regulating.
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# ? Aug 25, 2016 07:21 |
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Desuwa posted:I think the confusion is over why you're not just investing in the same fund in your taxable account as you do in your 401k. Sorry, what do you mean by taxable account? Do you mean my Roth? Cause I'm maxing that out every year. I'm shying a bit from the 401k because the last time I checked, ~30% of the target retirement fund was in the company stock.
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# ? Aug 25, 2016 08:04 |
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obi_ant posted:Sorry, what do you mean by taxable account? Do you mean my Roth? Cause I'm maxing that out every year. I'm shying a bit from the 401k because the last time I checked, ~30% of the target retirement fund was in the company stock. Non retirement fund - not a 401(k) or IRA. you should post your 401(k) fund tickers and ERs....
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# ? Aug 25, 2016 14:54 |
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obi_ant posted:Sorry, what do you mean by taxable account? Do you mean my Roth? Cause I'm maxing that out every year. Any account without some kind of tax advantaged status in some way is just a normal taxable account. Also when talking about your Roth IRA keep in mind there are also Roth 401(k)s, so just saying Roth can cause some confusion. obi_ant posted:~30% of the target retirement fund was in the company stock. That is horrifying, that's definitely not an index fund or fund of funds like we recommend in this thread. There has to be a better option than whatever the hell that is.
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# ? Aug 26, 2016 06:13 |
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Desuwa posted:That is horrifying, that's definitely not an index fund or fund of funds like we recommend in this thread. There has to be a better option than whatever the hell that is.
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# ? Aug 26, 2016 10:11 |
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Has anyone had to deal with IRA withdrawals for contributing over your limit? I'm aware this goes into humble brag / good problem to have territory, but I've been maxing my Roth IRA and realized that for 2016 when including my wife's income since we file jointly, we make enough to go into that area where the contribution limit is reduced. I put in the 5500 (or whatever the max was) for 2016 earlier this year, but if my math is right I need to take roughly half of that out. It's an estimation because my wife and I each have a bonus component to our compensation that can be hard to predict. On top of that I'm unclear on what to do with dividends earned by the excess amount in the meantime. To be safe I'm probably going to take several hundred more out than what I calculated and then wait for 2017 to roll around so I can calculate how much I can contribute without any of the figures moving on me. I will probably do that going forward, unless our household income situation changes for the worse, since you have until april to contribute for the previous year. On that note, if my contribution is limited to let's say $2k per year, then it's not going to be a very exciting retirement account, and now I'm not sure if picking Roth over Traditional was the right choice. I feel like I'm whining: when I spreadsheet out my 401k and personal investments, all signs point to me being very far away from ever having to eat cat food in my winter years. I get that this is more of a tax advantage aimed at people whose income is below a certain band. I found the form on vanguard but was wondering if anyone has had to navigate this before? If i just over-withdraw (say for simplicity, I can only contribute 2k/5k, so I withdraw 4k to be safe) and say goodbye to the taxes/fees of that, will that be it? Or will it cause a problem if I'm withdrawing more of whatever the excess is. Bhaal fucked around with this message at 23:48 on Aug 26, 2016 |
# ? Aug 26, 2016 23:42 |
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Bhaal posted:Has anyone had to deal with IRA withdrawals for contributing over your limit? You should look into the Backdoor Roth - it lets you circumvent the income limits on the Roth, provided you don't have any money in a Traditional tax-deferred IRA (due to how the backdoor technique works - technically it's not forbidden but it makes it a lot less appealing.) If you qualified, you could just recharacterize your $5500 contribution (or whatever the "over" amount was) as a Traditional (non-deductible) IRA instead, then immediately convert it into a Roth. You'll probably have to pay taxes on gains, that will go on your form 8606 (see the link), but the good news is that in upcoming years you'd just go: $5500 Traditional -> immediately convert to Roth, meaning you could always fill up your Roth without worrying about income limits and wouldn't owe any additional taxes because that $5500 would only be in your Traditional account for a day or something.
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# ? Aug 26, 2016 23:51 |
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SiGmA_X posted:Non retirement fund - not a 401(k) or IRA. Sorry, fund ticker? Desuwa posted:That is horrifying, that's definitely not an index fund or fund of funds like we recommend in this thread. There has to be a better option than whatever the hell that is. Yeah which is why I've been trying to shy away from my work's 401k. Funny note, I got an e-mail today... [quote=******* Fund Restrictions: You may need to take action To promote diversification, ******* is implementing restrictions regarding how much of your 401(k) Plan balance can be invested in the ***** Stock fund. The new restrictions will be effective September 28, 2016, and will limit: Investment elections for future contributions to the ******* Stock fund to no more than 20%, and Future account balances in the ***** Stock fund to no more than 20%. However, stock holders with an account balance greater than 20% will have the opportunity to keep their existing stock balance if they take action during the election window, which will take place September 28 - October 21, 2016.][/quote]
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# ? Aug 27, 2016 09:14 |
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obi_ant posted:Sorry, fund ticker? Fund tickers is the name of the letter abreviations for the funds (exp: VTTHX = Vanguard TDF 2035).
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# ? Aug 27, 2016 15:06 |
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This is old news, but I just came across https://myra.gov/. It's kinda neat in that it lets anyone (not just federal employees) put up to 15K into TSP's G fund (which is guaranteed a positive return) via a roth IRA with no fees.
El Mero Mero fucked around with this message at 02:39 on Aug 28, 2016 |
# ? Aug 28, 2016 02:36 |
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El Mero Mero posted:I kinda have a macro level question about passive investment and I'd like someone to explain to me where I'm going wrong in my thinking. A highly simplified model of a market which consists of only index funds and companies with honest, intelligent CFOs sort of works, so I don't think that the rise of index funds poses much of a threat yet in that regard. However some people have suggested that diversified funds are anticompetitive and maybe should be illegal https://www.bloomberg.com/view/articles/2015-04-16/should-mutual-funds-be-illegal- https://www.bloomberg.com/view/articles/2016-08-24/are-index-funds-communist
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# ? Aug 29, 2016 18:18 |
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pointsofdata posted:A highly simplified model of a market which consists of only index funds and companies with honest, intelligent CFOs sort of works, so I don't think that the rise of index funds poses much of a threat yet in that regard. The second article posted:The basic idea is straightforward. The function of the capital markets is to allocate capital. Good companies' stock prices should go up, so they can raise money and expand. Bad companies should go bankrupt, so that their resources can be re-allocated to more productive purposes. Analysts should be constantly thinking about whether companies are over- or underpriced, so that they can buy the underpriced ones and sell the overpriced ones and keep capital flowing to its best possible uses.
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# ? Aug 30, 2016 00:31 |
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Hoodwinker posted:That's quite, uh, a logical leap in there. I assume his statement would be correct if a huge percentage of, say, Apple stock was owned by passive index funds... but as long as the shares are mostly owned individually/actively (I assume today? what % of Apple shares do you think come from passive indexes?), that should drive the price way more than people just buying a bunch of passive funds. Right? (I have no idea what I'm talking about.) Blinky2099 fucked around with this message at 00:46 on Aug 30, 2016 |
# ? Aug 30, 2016 00:44 |
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Blinky2099 posted:Passive index funds act solely based on allocation percentage and don't take performance into account at all, right? Two paragraphs later: "There is a lot of debate over whether this is actually how it works. For one thing, public stock markets are not really a mechanism for raising capital any more." So you have the right idea. The primary capital force behind companies is not stocks.
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# ? Aug 30, 2016 00:48 |
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So Der Kammisars on wall street should decide a 5 year investment plan. For the glory of our nation?
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# ? Aug 30, 2016 15:06 |
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I plan on selling some funds in a taxable account that have been sitting around for a while (10+ years). So far I get that I need to pay 15% on the gain, but are there any other circumstances to be aware of that lower or raise the expected taxes? That is, is there a right way to sell them (time frame, amount of shares, etc.) such that I'm minimizing the taxes?
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# ? Aug 30, 2016 15:33 |
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Xguard86 posted:So Der Kammisars on wall street should decide a 5 year investment plan. For the glory of our nation? Not really. quote:There are three basic approaches that you can take: The piece really kind of just looks at, as a simple fun thought experiment, the long-term implications of the current trends in investing. quote:o the logical/whimsical end point is, if you want to invest in U.S. business, you give your money to the Best Capital Allocating Robot (U.S. Division), and that robot -- whose prowess has been proven over time in fierce competition -- applies the best algorithms to the best data set to make the best possible capital-allocation decisions, and you get the best returns, and the economy gets the best capital allocation. It's interesting to think about in an abstract sense, because you could make a career out of picking out the details. But index funds haven't been around for a long time (happy 40th birthday to VFINX tomorrow) and that sort of passive or pseudo-passive investing is still evolving. So it's not so far-fetched to think about the implications of ideas taken to the extreme - the best types of thought experiments.
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# ? Aug 30, 2016 15:34 |
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Well if we're just talking thought experiments What about a post scarcity future of perfect abundance and happiness. But on your 18th birthday you have to VC pitch your life plan to the actively managed robo fund that controls all human resources. If it declines funding, you are executed on the spot. The twist at the end is when a plucky band of underwater basket weavers who evaded execution penetrate the server farm. Deep in what was once valley forge PA, stenciled on the side of the server wrack, in faded ink, are the letters "VFINX"
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# ? Aug 30, 2016 18:49 |
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# ? Apr 17, 2024 01:15 |
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I rolled my old job's 401k into a roth IRA and traditional IRA with schwab (I do my checking through them and my brother/dad said they're a solid choice). Now that they're both funded, I'm having trouble comparing ETFs with index funds. I did 33/33/33 small/mid/500 in my 401k. I'd like to keep this the same, more or less, but I'm not sure why I'd choose an ETF or an index fund, other than expense ratios. 1/3 SWSSX vs SCHA for small cap (this is the one I'm confused about) 1/3 SCHX for mid cap (schwab doesn't appear to have a schwab-owned mid cap index as far as I can tell) 1/3 SWPPX index for S&P 500. Does this sound about right?
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# ? Aug 30, 2016 18:51 |