AVGE
Avantis All Equity Markets ETF
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In this case Yes. That's way too concentrated. You need something to balance it out. You won't be happy when the S&P dips 20%. That's nearly half your value and you will be right back here asking when to sell. Now in something like VT or AVGE, 49% isn't bad because of the massive stock diversification. So if the S&P dips 20%, you would barely feel it if at all.
Fuck VT. Go with AVGE. Vanguard is outdated
Since this is a truly life changing windfall with potential returns dwarfing a $100k salary, your main task now is capital preservation, not growth. Here is what I would do if it were me: 1. Boost my emergency fund to a full year of living expenses. 2. Make a 5-year noncallable CD ladder. Each CD with at least a full year of living expenses. As each matures, buy another 5 year CD. This makes sure you always will have 5 years of living expenses not subject to any market risk. 3. To stay ahead of inflation you do need exposure to other assets like stocks or real estate. I know nothing about investing in real estate, I can say what I would do with stocks. 4. Invest in a simple worldwide index fund like VT or AVGE. Fidelity has a US total and an international total you could also use. If it were me I would invest 10% of the investable money every 6 months starting now. After all the money is invested it's fine to sell some yearly to buy your next 5 year CD. 5. Alternatively, you could dump everything in a conservative balanced fund right now. I would lean toward one that uses index funds and has no more than 50% stock. One worth a look is Vanguard Retirement Income, which is about 30% stock. https://investor.vanguard.com/investment-products/mutual-funds/profile/vtinx 6. Stay away from crypto, gold, commodities and buying a business. They are too risky.
AVGE seems one of best to me.
See, the problem with a direct "tilt" like that though is that you end up underweighting the top of the market (note: I haven't looked at the exact holdings of AVGE). In the world we currently live in where like 10 stocks make up more than a third of the S&P 500, market performance is VERY heavily tied to the performance of just a few companies. The idea of the portfolio construction I was proposing was to capture those players using MGK but then for the REST of the portfolio, go all in on value + quality (SCHD and SCHY probably aren't the purest way to approximate that, but they do align with the idea). Of course by doing that you create a "barbell" that is heavy at the top ((MGK) and heavy at the "bottom" (SCHD + SCHY) (in terms of valuation multiples), so what gets left out here is the "middle" of the market (i.e. large (but not mega) and mid cap growth). Any kind of active management will have some kind of tilt. The question is what. My idea was to primarily go after value (with quality to avoid value traps) but hedge the idea that the top players continue to dominate with a position in MGK.
I’m not reading that but you can check AVGE which is basically VT with light factor tilt
Last point in case it wasn't clear, AVGE is a one-fund portfolio. You can dump your money into that going forward and not think twice about it
Yes, exactly. Now the most popular ETF for this is VT, Vanguard's total stock market fund. But I would actually suggest a newer one AVGE from Avantis. They do a couple of nice things to get you a little more return 1) Vanguard rigidly follows an index and announces their trades ahead of time, so they get frontrun by hedge funds. Avantis keeps their intentions a secret until after they make a move 2) Avantis screens out small, unprofitable companies which tend to be leeches on global investment capital anyway 3) Slight value tilt helps mitigate bubbles and get you higher return because of that
Just buy the entire world market with a slight tilt to small and value. AVGE
Definitely invest. I did for 35 yrs then retired at 56 and now meet the definition of wealthy by most surveys. Primarily in lo cost index ETF’s like VT, AVGE, FXAIX and AVUV! I know there r many people who exceed me by gambling with puts, options, bit coin and single stocks. However, instead of taking a less than 1% chance of becoming rich I took the path of 100% chance of becoming wealthy! That was my point!
Adding some specifics to smash brother's comment for OP, some total US market funds are VTI, VTIAX, FSKAX. A couple of International total market funds are VXUS, VTWAX and FTIHX. Actually, there are even total world funds like VT, VTWAX, AVGE (has a small and value tilt) and DFAW.
Start with the basics like VOO or AVGE. Regardless of your age, funds like that should make up the majority of your investments. Individual stocks are way more exciting and fun when they go up, but they will crush your dreams when they suddenly correct. The safest and most realistic goal is to "get rich slowly".
Going 50/50 into exactly two *single* investments is an incredibly plan. You should *strongly consider* buying at least one broad market fund. Something with at least hundreds of stocks in it, if not thousands, will provide you with a ‘core’ position. It doesn’t have to be 80% or even 50%. I personally wouldn’t consider going lower than 50% but maybe 33% will work. If it’s only one it should be worldly. Think: SPGM, VT, ACWI, AVGE, URTH, etc. even IOO would be better than only two equities.
If you're unsure, inexperienced, and risk averse but seeking consistent growth - nothing beats the classic 90/10 split into a 3 stock portfolio (or, to simplify it even further, just VT or AVGE instead of VIT and VXUS or something equivalent). I'd throw in a small amount of Bitcoin as well just for exposure, but I wouldn't do more than 5-10% personally. Sometimes the most "exciting" play is the one that's basically just the most guaranteed to make you money. Lump sum 100k now and DCA the rest at a rate of your choosing until the remaining 200k is exhausted (keep it in SPAXX or something in the meantime). That's what I'd do simply because agonizing over the lump sum vs DCA optimization will drive you mad, especially when putting down a large amount like that at once. Beyond that is when you start getting more speculative obviously. Honestly, there's so many conflicting events and factors currently affecting the market that I find it difficult to believe anyone who thinks they know what's going to go up. Personally, I'm about half VT and half split between SPMO/BRK/SMH. I think NVDA/AMD/SMH are still good buys for the foreseeable future despite what people think (hell, NVDA has mathematically been able to justify it's value year-over-year and isn't slowing down and AMD is pretty much the only company in the world poised to compete with them despite the current lag). I'm not really well versed enough in other sectors to sniff out potential bets in them though.
Buy AVGE. Globally diversified, tax efficient, modest factor exposure. Don’t focus on dividends or options. Let it compound with divs reinvesting automatically and in 30 years it’ll be a huge head start.
You could add the US extended market (small and midcap) as well as ex-US developed and emerging markets. The easy was is just a single fund like VT, AVGE, etc. instead of the S&P 500. You could instead combine a cap weighted total US (VTI, ITOT) with an ex-US fund (VXUS, IXUS). If someone already has a S&P 500 fund (e.g. VOO), they could add extended market (VXF) and ex-US (VXUS).
Universe doesn’t hate u! U just need to b more diversified and stop trying to time the market. Just choose a lo cost S&P 500 index fund or worldwide index fund like AVGE, DFAW or VT. Stock markets make a very small insignificant number of people wealthy in the short term but if u consistently invest 10-15% of your salary over a 30 to 40 yr period in a diversified portfolio and ride out the ups and downs u will b wealthy!! And don’t let your politics influence your investing!
Both of those funds have had a great run this year, but both are heavily concentrated. Unless you have to takeoversized risk, why not diversify across the world with a fund like VT or AVGE? Or at least across the US with VTI?
Not trying to be insulting but $10k per child isn't close to where you would have serious tax problems. More like $5m per child. An IUL solves problems you don't have. You can stuff $10k in a 529 and help pay for college. That's not substantial but it is impactful. You can create a UGMA at say Wealthfront or Schwab Intelligent Portfolios. You can use any broker and put it AVGE or AVGV or similar all-in-one. I'd suggest the robo (Wealthfront, Schwab...) for now since it sounds like you don't invest and the robo will do a nice job taking the pressure off.
If you’re actually asking do 50/50 RSSB and AVGV. It basically equates to 100% stocks, 50% bonds with slight use of leverage. Diversified across the world, value tilt, slight small cap tilt. It will probably beat the market slightly over 30 years. If you have to pick just one do AVGE or AVGV and call it a day.
Both are good but not truly diversified stock portfolios when taken alone. VOO = mega cap growth. Missing Midcap, small cap and international. A bet that the next 15 years will be like the last 15 and US mega cap will outperform. VTI = total US, market-cap weighted. About 80% of this is VOO. No international. Again, a bet the US will, as a country, continue to outperform. If I could only choose 1 fund I would choose VT or AVGE. VT is a true total world stock index. AVGE is a world stock ETF, somewhat run through some rules to have a bit of tilt toward smaller and value. I want to own the world's stocks for real diversification. My belief is the next 15 years will be unlikely to mirror the last 15. But let there be no doubt, VOO and VTI will almost certainly outperform a large majority of actively managed funds.
AVGE gives you global diversification, tax-free rebalancing, and a modest tilt to factors shown to historically outperform. No better 1-ticker portfolio I can think of. $1000 or $100M, it could be your entire portfolio.
This post just made my day. Usually folks hear this and don't listen, they prefer thinking they found a free-money tree. So glad to hear someone got the message! REITs are a sector, it is a sector-tilt. I would avoid it. Want to juice expected returns a bit? Tilt to value, size, profitability, momentum. Avantis has some great products, including some 1-fund solutions like AVGE (modest tilt, 70/30 US/ex-US) or the more cost-effective all-value offering AVGV (60/40 US/ex-US). AVGV would be a fantastic compliment to VTI by giving you some ex-US and value exposure.
I like AVGE, RDIV, SCHD and SPHD. They seem pretty solid with some dividends. Also been liking GGN. Nice gold dividends etf and PAAS for silver/gold. That 6 of my favorite solid gainers.
Both have advantages. All at once (lump sum) wins must of the time because the long term trend in the market is up. I think it's about 2/3 of the time this wins. Investing it over time (dollar cost averaging) only wins about 1/3 of the time. However this method lowers the risk that you invest at a relatively bad time. There is no rush and no deadline. It's OK to take some time to come up with a plan. If you do this park the $ in savings or money market account getting 4% or so. If you have income a Roth IRA is a great place to put $7k/year. I lean against adding to the 403b because most have less investment choice and more fees than an IRA. My opinion is to "be the market" with the money and buy VT or AVGE, very widely diversified world stock market funds. I wouldn't take above-market risk with more than about 10% of the $. While VOO and QQQ have done very well for the last 5-10 years they are not widely diversified, lacking Midcap, small cap and international companies. QQQ also lacks some industry sectors. I also suggest the Money Guy podcast and the Talking Real Money podcast. At your age Money Guy probably will speak to you more.
If you want a fund to do this all for you, consider AVGV. Great compliment to VOO. It’s global 60/40 US/ex and all value. AVGE is a less tilted one, 70% US, and could be your entire portfolio. Or add small value directly with AVUV (US), AVDV (DM), and AVES (EM).
Buy AVGE. Globally diversified, tilted to factors shown to outperform, tax-free rebalancing. Enjoy life.
AVGE would give you some ex-US and multi factor exposures tax efficiently. All in on VOO is a meh total portfolio.
I’ll end it by saying AVGE is better. More tax efficient than VT, higher expected return.
1 ETF only. AVGE and chill for me.
Do you have an emergency fund of at least 3 months' of living expenses? If not, an EF could be a good first step. And it should be in something very liquid like a savings account or money market. You should be able to find one with a 4% or higher yield. Are you able to contribute to a 401k, 403b, 457 or TSP retirement plan at work? If so, contributing enough to get the full match is another good move. Are you qualified for an HSA? For non retirement investing (not including your EF) a broadly diversified ETF or mutual fund is often suggested. I like the total world stock funds like VT or AVGE for that. For retirement accounts, a good choice for most is a target retirement date fund. Pick the one closest to when you turn 65.
I love it. You can get similar exposure by simply buying a single fund, AVGE. Tax free rebalancing, more tax efficient than VT (because it holds separate ex-US ETFs you actually get the foreign tax credit). 70% US, 30% ex, modest factor tilt.
VGT has recently had higher returns than the broad index (FXAIX), doesn’t mean it is expected to forever. In fact, if you believe there’s a premium to value stocks, VGT should do worse. Historically if you wanted high risk high reward you wanted small value, like AVUV. I’d recommend you buy AVGE and nothing else. It’s 70% US, 30% int, and tilts to factors shown to outperform and diversify.
I recently started moving more into an internationally diversified total market fund. The Avantis All Equity Markets ETF (AVGE) is now my go-to choice. Slightly higher expense ratio than VTI, but also better performance.
AVGE if you want something easy and all encompassing.
Nope. There are single ETFs that provide a portfolio far more thoughtful, diverse, and tax efficient than most advisor managed accounts. It feels too easy but just buying AVGE and nothing else for your equity allocation will set you up so well. 70% US, 30% ex, and tilted to factors shown historically to diversify and outperform.
Don’t fall for the dividend fallacy. VNQ/JEPI aren’t prudent. Avoid single names. Holding VT plus VTI/VXUS is nonsensical. I’d sell it all and buy VT or AVGE if you want a modest tilt to factors shown to outperform historically.
You are aware that growth doesn’t mean higher returns, right? Buy AVGE. Infinitely better and more diversified. If you must slice and dice, buy value, not growth.
AVGE. Total world stock ETF with some smaller cap and some value tilts. I want you to be diversified.
AVGE. Globally diversified and tilted to factors historically shown to outperform. More diversified than any of the 3+ fund ports you see posted here.
If this were me I would start with 100% total world stock market ETF VT. For a bit of value tilt instead, check out AVGE.
To each their own. This is a terrible idea for any investor, but especially a 3 year old. I would just buy AVGE to get some ex-US exposure and a modest tilt to value, profitability, and size factors and stop trying to game the market (but still be expected to outperform it).
Buy AVGE. All you will ever need for stock side.
Someone that is a child can very easily buy AVUV, AVDV, and AVES. Or just buy AVGV which invests in global large and small value stocks. Or if you want a bit less tracking error, just invest in AVGE which has a bit more US (70% vs. 60%) and is a more modest tilt. None of this is difficult to implement, the hard part is dealing with tracking error. But to say that investing in small-value as a young person with a long horizon is a "terrible" idea is just flat wrong, but I get it, you just learned what the term means. But for someone with a truly long horizon, it is your best chance at outperforming.
80% bonds seems too high imo. If you are really worried about stock volatility, leave the individual stocks and go to an All Equity etf like AVGE or an all stock etf like ITOT, SCHB or VTI. That way you don't need to worry about anything if something were to happen that moved stocks one way or another. A simple all bond etf like IUSB is all you need. If you like to diversify more, the treasury related bond fund GOVT is a good addition. Have you also considered a CD ladder?
$10k/mo for 20 years at 6% real returns is $4.6m. You can pull $184k annually real from $4.6m easily and likely quite a bit more. And of course the business is worth something. So you will get there. If you don't need access to the money I'd suggest funding a few different portfolios inside taxfree options. I'm assuming the tax deduction is more important. There are all-in-one ETFs which are designed as total portfolios. My recommend would be AVGE by Avantis. Do that for 2 years and then you'll know enough to pick another. If you don't even want to trade you can use robo advisors for example https://www.schwab.com/intelligent-portfolios which is what I put family in. You throw the money in and a computer maniges it. FWIW I don't like Vanguard's all-in-ones but since you mentioned it they do have them. Now there is a complicating factor since you have a business. Do you need access to the money (taxable access) for the business. The more you want in and out access for money the better insurance products work (IUL, VUL, Whole life). If you are just stuffing money in for retirement without the need for access then I wouldn't worry about this. But it is worth mentioning that the normal rules for what's best for employees may not apply to you since you may want to borrow out profits (thereby getting a better tax deduction), and have better access to funds.
If you are looking for high dividend yield and heavy tech funds, you're doing it wrong. Start at the basics. To answer your question, I'd start by just buying AVGE which is an ETF-of-ETFs that will give you exposure to US (70%), ex-US (30%) equities while also tilting modestly to value, size, and profitability factors to boost expected returns.
Lot of tickers, I would simplify. No need for bonds at 18. Buy AVGE and you'll be infinitely more diversified, more tax-efficient, and can focus on building your income/savings. 70% US, 30% ex-US, modest tilt to value, size, and profitability factors.
AVGE was initially an option I was considering for a 1 fund portfolio but I find it does not have enough weight on small cap value for my taste, so figured I could make a blend of ETFs of my own. I find rebalancing not to be too complication when both rebalancing and contributing is done once yearly. Another simpler approach I have seen around is VOO+AVUV and VXUS+AVDV but this one lacks exposure on emerging markets to my understanding, while my custom blend splits ex-US and Emerging into 50/50. Appreciate your input, instead of the usual "Complicated. Just buy *Vanilla.*"
If you want to control the percentage of foreign exposure, buy VTI & VXUS at your target weight. I'd buy AVGE. It is 70% US, 30% ex-US, and tilts moderately to size, value, and profitability factors, all shown to outperform (and diversify) over the long run. Quite tax-efficient too. If buying in an IRA I may consider RSST which is 100% S&P500 plus 100% managed-futures trend replication.
Copy thanks for the color, perhaps at 57 it makes more sense but I still wouldn't have used these particular tickers. I also wouldn't have used LPL financial (no idea what that is). You can open an IRA at Robinhood or Fidelity (I would go with Fidelity to be clear, much better brokerage). No need to open it at some obscure place. AVGE may be a touch more risk than someone at 57 would normally want for all their capital, but would totally be appropriate for an IRA if you have some cash in taxable accounts. Good luck! Praying for a mega-bull for us both!
No, I'm not paying him, it was a free service through the credit union. I had no idea what I was doing so I trusted him to make a good decision, and we agreed that I would need to start making monthly deposits up to the allowed amount per year. Unfortunately, *after* he had already transferred the money, he told me that LPL is not set up for deposits...but it's "supposed" to be in the future. That was eight months ago. So while waiting to be able to do that, I decided to just start investing through apps like Fidelity and Robinhood myself. I've actually done alright for with it (and having a lot of fun learning), but I'd really prefer to have the additional option to be adding to the IRA. I'll be 57 next month and yes, this is all I have in terms of a retirement account. I've already accepted that I'll be working well into my 70s and it's no one's fault but my own, I didn't make good financial decisions in the past. All I can do is start moving forward from here, one step at a time, with a realistic view of the future. I think my next step will be calling the credit union back and asking for a different advisor. And I've made a note about AVGE or something similar, thank you so much for your help!
How old are you? PSDTX is basically a bank account. With only $6K to your name I can't fathom why you'd me in that. You aren't paying this advisor, are you? I'd just invest it all in something like AVGE, set dividends to auto-reinvest, and enjoy your life. AVGE is 70% US, 30% ex-US so you are globally diversified. It also tilts to small, value, and profitability, all shown to outperform and diversify the beyond the cap-weighted market.
I started from scratch last year at 34, you’ll be fine. My personal accounts, 401k: 100% FXAIX (Fidelity S&P 500 index fund), and my taxable brokerage is is 65% SPLG (SPDR S&P 500 ETF) 35% AVGE (Avantis All Equity Markets ETF). AVGE is a Fund of Funds, it is essentially a total market ETF, but it is factor tilted. Meaning Avantis screens companies based on the Fama French 5 factor asset pricing model, which are size, value, quality, profitability, and investment pattern. Factor investing isn’t for everyone, but it screens out shitty companies that may suppress a funds risk adjusted, compound annual growth, and total returns. I use AVGE as a hedge against the S&P. It’s served me well so far.
You should keep investing at the rate you set. Think of it as buying stocks on sale. You don't mention what you are investing in. I hope it's a total market or total global index like VTI, VT, or AVGE. And not individual stocks.
The segment shown to add outsized returns in the last 80 years is small cap value. If you wanted an all world fund that overweights small cap and value, take a look at AVGE.
For me I prefer flexibility of Fidelity , where you can do auto buy and partial shares purchases of etfs, you can not do either of those things at schwab. Also a pretty minor thing is CMA at fidelity where you can potentially have a \~5% yielding checking account with reimbursed atm fees. For me that is why I chose fidelity over schwab after leaving vanguard. Right now I do weekly buys of AVGE and some ftec and soxq for funsies.
With a small portfolio, your savings rate will be infinitely more important than optimizing your allocation given that you have a reasonable allocation. I'd just all in VTI to get started. Add in some ex-US when you're comfortable, bonds when appropriate. Other honorable mentions are indexed TDFs in tax-advantaged accounts, balanced funds, all-world cap-weighted (VT), all-world factor tilt (AVGE).
This is beyond over-complicated, this is nuts. Also AVGV is not an international fund, it is a global fund (60/40 US/ex-US). Just buy AVGE (70/30 US/ex-US, modest value tilt) while you learn more (or hold it for your entire life, you really don't need anything more).
First off taxable brokerage and Roth IRA have to be treated differently. One you need to worry about taxability, one you don't. VOO is mostly large cap USA growth. VUG is doubling down. Terrible portfolio. Yes you are taking on risk. If you want a set it and forget it ETF something like AVGE (not a Vanguard product but similar) is designed for that. For the Roth you can do VHGEX as an all in one. I do something similar with my Roth (DODWX). VHGEX is a bit growthy and large so not to dissimilar to your taste but will get you diversification. If you really like cap weighted indexing then VT is similar to VOO but 1. It includes some smaller stuff 2. Does the whole world not just the USA.
VT and AVGE would be other easy routes.
QQQM because I wanted something to track large-cap growth and to be riskier with I chose against AVUV/AVGE since SWTSX covers smallcap and qqqm is where I play riskier with 10% to diversify
GSLC is $100 a share. BTW FWIW AVGE might be a better choice and that one is only $70 / share.
It is sound. But your assets are not diversified you are heavily concentrated in USA large cap growth. Something more balanced and diversified across equity like AVGE (https://www.avantisinvestors.com/avantis-investments/avantis-all-equity-markets-etf/) would be better.
Far better than just buying SPY. I’d ditch real estate (sector fund, why?) and swap small cap with small value (ideally held globally). Just buying a fund of funds, AVGE, would beat this IMHO. 70% US, 30% ex, modest tilt to value, size, and profitability factors.
does this mean you are 100% AVGE?
I’d argue that ETFs are more tax-efficient than long-only direct indexing (long/short like those provided by AQR are another story) but we’ve beaten this thread dead by now ;). I hear you. Perhaps the FTC issue in VT is too small for some folks to worry about. I’ll allow it. I’d still push for a 1-fund solution like AVGE which will get FTC, plus modest factor tilts.
Exposure is fine in taxable but it’s not a great vehicle for US investors since you won’t get the foreign tax credit. AVGE is an ETF of ETFs so it would get FTC. It’s 70% US, 30% ex, and tilts modestly to value, size, and profitability factors.
AVGE would be an excellent 1-fund option. 70% US, 30% international, modest tilt to value, size, profitability.
AVGE is meant to be a balanced all in one ETF. Similar to a TDF but more tax efficient.
VT isn’t great in taxable though since you won’t get the foreign tax credit. AVGE is a good 1-fund solution that would get FTC and tilts modestly to value, profitability, and size factors.
I would just invest in AVGE and call it a day
Buy AVGE (globally diversified factors) and thank me later. Want US only? AVUV. Your portfolio is garbage and also oddly doesn’t fit your goals given that you want to avoid dividends and have SCHD. Both of my suggestions have higher expected returns than two funds that are identical or basically US large cap, and a high beta nearly meme stock.
I wouldn’t. Can build a lower cost, more diversified, more tax-efficient portfolio of ETFs yourself. Could just buy AVGE and call it a day. These are nasty traps, once you invest and gain $ you’re trapped in complexity.
Well you are missing inflation. The real return of the S&P500 has been closer to 6-7%, so those would be better numbers to use (an then compare to final growth to today's dollars). Also the US market has been one of the best performers of all time. Will it continue? I'd argue no given valuations. 4-5% longterm real returns are totally possible. You may even have lower returns over your lifetime. Don't give in to recency bias. Hold some ex-US stocks too. Tilt to small-value. Maybe just buy AVGE and call it a day (70% US, 30% ex-US, modest tilt to value/size/profitability). Good luck!
Most equity ETFs will be able to use the create-redeem process to wash away any capital-gains from their internal sales as well, so not only will you get the same tax-efficiency as holding individual stocks, but you'll get low cost diversification too! No reason to hold anything but an ETF. VTI and VXUS will give you global cap-weighted exposure (VT is global but not great in taxable as you won't get the foreign tax credit). If you want to increase expected returns you could tilt to size/value/profitability. Could even buy a 1 fund solution like AVGE which is 70% US and 30% ex-US. Lots of options, but certainly pick an equity ETF over stock-picking.
He wants a more diverse holding with some bonds in there. I'm assuming the 4.8% draw is inflation-adjusted and dual-life. That's not super high but it is not trivial either. A robo advisor might be a good idea if they don't know what they are doing at all as this can pay out income. If you aren't going to dp that assuming they are not all that well off ($4k / mo). Then I'd recommend 50% high yield bonds (VWEHX), 50% diverse portfolio (AVGE for example) will produce slighly more income consistently than they are asking for. Use excess income to buy more AVGE (there won't be too much excess and not for long). Replenish the bonds as little as needed when the income becomes too low.
Was your 401k a Roth or pre-tax/traditional like most 401ks by default? If the latter, be careful as moving to Roth is a taxable event. May make sense in your tax-bracket, but just pointing that out. I would focus on small-value personally. AVUV, AVDV, and AVES would give you global exposure. Want to make life simpler? Just buy AVGV which is a global value fund (holds those tickers plus some large-value). Don't want as much value exposure (want less tracking error, but less expected return)? AVGE is a similar product but with more modest tilts, and with 70% US instead of 60%.
AVGE is a great single ticker solution. 70/30 US/ex. Moderate tilt to size/value/profitability factors. Much better one fund solution than VOO.
If you had put $10K into an IRA and grew it to $80K over 30 years, would you move it to cash (no tax hit) and then DCA it back into the market? Would you repeat this yearly? If not, why? Outside of your emotions, this new $80K is no different. Invest as much as you can, as soon as you can. Also I’d diversify beyond US large cap. AVGE is a one ticker solution worth consideration. 70/30 US/ex and modest tilts to value, profitability, and size factors.
If it made sense to DCA with a new $1M in cash I handed you, it would also make sense to take a 30 year old 401k that is $1M and mostly made up of gains, move it to money market (no taxes due) and re-DCA it. Nobody does that... DCA is an emotional crutch, nothing more. Invest as much as you can, as soon as you can. 75/25 VTI/VXUS is an alright portfolio but I would personally just buy AVGE. It will be 70/30 US/ex-US, but also come with modest tilts to value, size, and profitability factors (increasing expected returns and diversification) and due to ETF-of-ETF structure, give you tax-free hands-free rebalancing.
First off you can diversify inside the old IRA. One of the advantages of tax-advantaged is buys and sells don't matter much. You are way under-diversified. Something like AVGE or a robo advisor.
First off you are way ahead of the game. Congradulations! The problem you have are great. Your number one asset is your future wages. Putting yourself into poverty can be destracting and destructive to your most important asset. You clearly want to save and invest, but don't lose sight of what is most important to focus on getting great returns on $28k. You want to maintain liquidity for college. If ultimately it all goes to housing and board that's not a bad use of the funds. While early savings is great, having lots of excess income to save faster is better. Now in terms of retirement savings you can put $7k / yr into a Roth. You just missed the date for 2023 but 2024 is still open. If you don't know anything just throw it all into AVGE. That's a reasonable total portfolio. Keep doing that till you get to $100k and perhaps beyond. Now that probably isn't fast enough. A good way to accomplish both liquidity and growth is a taxable high draw portfolio. A taxable setup like: 15% AVUV, 15% AVEM, 70% VCSH will get you long term growth about 1.5% below 80/20 with liquidity not much worse than short term bonds. You can draw fast if you need to, but can leave it in there for years without hurting yourself too badly. BTW what you are doing isn't "passive income". Passive income is income (not capital gains) from investing. You are just having a subsidized standard of living.
Sell them all. They just pump out taxable distributions with no real benefit. I would sell everything, buy AVGE, get tax-efficient global exposure to equities plus factors shown to beat the market (size, value, profitability) and then focus on increasing my income.
Interesting, I didn't consider AVGE and ex-US funds. I am mainly in the well, TSP doesn't have many fund options and the C (S&P500) is the best performing (generally speaking, I know the S has previously performed quite well). I decided to keep my Roth in the S&P while I continue to learn and plan to diversify into other funds once I hit $100k (currently at $55k). What about just only S&P is inefficient though? It is a broad Index with great returns across its lifetime. Just trying to understand the efficiencies here. I would greatly prefer to maximize efficiency but not introduce more risk if I can help it.
If you REALLY want factor investing look into AVGE, it's basically everything that you have combined and it's by a great company.
Ideally you would pick tax-efficient investments that do not have capital-gain distributions. Some equity mutual funds will, but equity ETFs rarely do (especially major ones like a Vanguard/iShares S&P500 etc...). So you invest, you will get recurring dividend payments which will mostly be qualified meaning you pay long-term capital-gains rate, and then whenever you sell you'll pay short/long-term cap-gains on the profit. I would consider some ex-US funds... or at a minimum some diversification into value/size. Personally I would just buy AVGE in taxable to get 70% US, 30% ex-US, and a modest tilt to factors shown to outperform the market. 100% S&P500 is an inefficient portfolio.
AVGE and chill. 70% US, 30% ex-US, modest tilt to size/value/profitability factors, and tax-efficient automated rebalancing. Higher expected return than VOO, and even more so VUG.
This is just recency-bias. You want some global diversification, and I'd also suggest some factor exposure to diversify further while increasing expected returns (things like small-value). I'd buy AVGE if you want 1 ticker ease. 70% US, 30% ex-US, and a modest tilt to size, value, and profitability factors. Will be more diverse and have a higher expected-return than VOO.
Solid option. My main gripe with VT is that for US based taxable investors, you do not get the FTC (foreign tax credit) like you would if you held VTI/VXUS. Personally I recommend using AVGE (or AVGV if you are okay with all-value) for single ticker, globally diversified, tax-efficient (ETF-of-ETF structure does get the FTC) with a modest tilt to size/value/profitability factors. AVGE is 70/30 US/ex, AVGV is 60/40 and all value.
JEPQ doesn't generate income in any sense outside of it generating taxable income (which isn't good). Dividends/distributions are just forced sales, and thus taxable events. On ex-dividend your share price will drop by the amount of the upcoming dividend, so you didn't actually make a penny via the act of receiving or reinvesting the divvy. I'd just buy something simple, at-least until you learn more. A great option (that even an experienced person) would be AVGE which is an ETF-of-ETFs that gives you tax-efficient global exposure to equities with a modest tilt to size, value, and profitability factors (historically beat the market while diversifying), all in one single ticker. But being all equities isn't great for a 3-5 year period to save up for a house... but would be a great option for longer term savings. PS: I wouldn't call your current approach Warren Buffett... the man hates dividends, and you are seeking them out.
I'd just buy AVGE and keep life simple. Tax-efficient (tax-free rebalancing), 70% US, 30% ex-US, with a modest tilt to small/value/profitability factors. Let it run the portfolio for you. Can use in Roth IRA, taxable, anywhere. Then focus on your income. VTI, VXUS, and small-value is fine too but that is essentially what AVGE is, all in one easy to use low-cost tax-efficient package.
i'm assuming this is fun money for you given the amounts? If it is series money and you are brand new AVGE or a robo (ex Wealthfront) is my general recommendation.
The only issue I have had is missing alerts for dividends. It happens occasionally, and seems to have started last year. I know a dividend should be paid around a certain date. Several days later: no alert. I have to go to the account's transaction history to find the dividend. It is really annoying. Also since Morgan Stanley took over it seems dividend payments can be a day or so late; I am not totally certain. It would not be so annoying but I keep a running total of all my dividend payments then at the first of each quarter use them to buy AVGE (used to be VT). I have a considerable amount with eTrade and never had problems other than the above.
My choice of simple investment is AVGV. If you aren't willing to tolerate much of a value tilt and want to track other all in one stock portfolios better: AVGE. Make sure to leave enough in cashish to cover the taxes.