SCHC
Schwab International Small-Cap Equity ETF
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I think I see where you're coming from and Schwab does offer a domestic TSM fund - SWTSX - but am not seeing a foreign/international TSM fund from them. If I saw such a fund from Schwab I'd probably go with that over the VXUS or SWISX/SCHC/SCHE shenanigans.
Age/location - I am 42 years old and live in the US. Employment - I am employed making $57,800/yr. Objective and time horizon - retirement, looking at 20+ years Risk tolerance wise don't mind wagering it all on blackjack I currently have SWPPX, SWISX, SWSSX, SCHC, SCHD, SCHE, VFIAX, and VIMAX. No debt. The big question - I am considering consolidating my positions in SWISX, SCHC, and SCHE into VXUS. This would be at Charles Schwab. I am wondering if this is a good idea or I am barking mad
AVUV/AVDV is expensive compared to the passive small cap funds. IJR for US small cap has an expense ratio of only 0.06% vs 0.25% and SCHC for international is only 0.08% vs 0.36%. You're also pretty correlated, might want to, definitely don't need to, add an uncorrelated asset like a corporate bond ETF or REIT. Other than that you're pretty safe.
Tons. You've got options like an international small cap like SCHC AVDV, or international high dividends paying like IDV or VIGI. For a lower risk like big cap S&P probably Schwabs SCHF - it's basic description: "The investment seeks to track as closely as possible, before fees and expenses, the total return of the FTSE Developed ex U.S. Index. The index is comprised of large and mid capitalization companies in developed countries outside the United States, as defined by the index provider. The index defines the large and mid capitalization universe as approximately the top 90% of the eligible universe. The fund will invest at least 90% of its net assets in stocks, including depositary receipts representing securities of the index; such depositary receipts may be in the form of American Depositary Receipts, Global Depositary Receipts and European Depositary Receipts." These have done \*very\* well lately. Also look at some individual country's markets like South Korea EWY - bananas growth, protect you from a crashing dollar, and they pay dividends too.
I see SCHC is a small cap international, I do not think I’ve seen anyone mention that ticker before.
International ETFs like VEU, SCHC are trading at a premium. GLD is up. I wonder why?
SCHH is Schwab’s REIT ETF (since you asked about REITs). SCHA is US small-cap. SCHC is foreign (developed) small-cap. For broader market ETFs you can go with SCHB (broad US market), SCHF (broad foreign (developed) market) and/or SCHE (broad foreign (emerging) market).
So just to get some wording strait because your wording is confusing saying bonds are safer than ETFs or MF ETF or Mutual funds are funds that hold other things, they are as safe or risky as their holdings They can hold very safe things like short term treasuries (SGOV) , or they can hold risky things like small cap foreign stock (SCHC) So you cannot really say ETFs are more risky than bonds , SGOV an ETF will be safer then some long duration junk bond. That said with bonds there are sort of two axis points duration (generally length to maturity ) and credit risk The shorter the duration and lower the credit risk the safer the bond, the longer the duration or the higher credit risk the riskier the bond Meaning on one end we have short term treasuries , low duration , low credit risk On the other end you have long dated , higher credit risk junk rated bonds Now there is also everything "in between", you can buy a 30 year government bond, low credit risk but long duration or even a short term junk bond. So something in between might be LQD what invest in mid term corporate bonds (investment grade) ; then there is also JNK what invest in mid term junk bonds that is higher risk. Generally, both will still be "safer" then stocks However as u/wild_b_cat said an easy answer is just allocate a bit to both using broad market index funds For example, 60% VTI (Total USA stock ) / 40% BND (Total USA bond ) and adjust the allocation as you see fit. The higher the bonds allocation, the "safer" the portfolio
Schwab rough equivalents would be SCHB and SCHF (though the latter is developed only and excludes small-cap while VXUS is total (SCHC is developed small-cap and SCHE is emerging markets (excluding small-cap)).
Rate my portfolio: * 25% GOOG * 10% VOO * 10% SCHX * 10% VEA * 10% OMFL * 10% PDGIX * 5% SCHM * 5% VTSAX * 5% SCHC * 10% cash in CDs and savings accounts yielding \~5% I'm relatively young, I have about 30 years to go toward retirement. So far this year my portfolio is beating every index by a solid margin, mostly attributable to Google outperforming the market. When Google is down, my portfolio is pretty similar to the SP500, unless Google is WAY down then I'm under the market.
> with 75% into RFHTX and 25% into the 500 Index Fund. I am not looking to change that allocation unless folks have a compelling recommendation. that allocation has you more concentrated in large US companies. you're increasing your risk. RFHTX is already 68% US stocks, then you're adding more of the same with the S&P 500. https://www.capitalgroup.com/individual/investments/fund/rfhtx#com-mod-holdings-section > As we are moving into Schwab, what index funds or ETFs would make the most sense for the Roth IRAs? Schwab has good options, but you can buy most US ETFs through most US brokerages. you could buy Vanguard, Fidelity, etc, within the Schwab account. but SCHB would give you coverage of most of the US market, SCHF for international large companies and SCHC for smaller international, plus perhaps a bond ETF. full list of Schwab ETFs here: https://www.schwab.com/etfs/invest-in-etfs or you could break it down with SCHK for large/mid US and SCHA if you wanted a heavier small-company stock allocation. >Should we be maxing out Traditional IRAs with the intent to do a backdoor conversion later? probably but check with a tax professional. >What should be done with the cash that we have in our bank’s low-interest savings account? I'd pay down the mortgage. because you would never take out a HELOC at 2.4% and put the cash in a low-interest savings account. and the people who say 'invest the cash because you can beat 2.4% in the market' are using hypothetical market returns. you are not guaranteed to get a return in the stock market. the US market was flat from about 1968-1982.
Stocks (20% of my portfolio) - ADS (Adidas) - WIZZ (Wizz Air) - APPL - GOOGL - BABA - TSCO - VOE (Voestalpine) - DIS (Disney) - AMZN ETFs (10% of my portfolio) - SPY - SCHC (Small-cap healthcare) - Emerging Markets Bond ETF - Cash (70%) What do you think? I tried to have a more diversified portfolio, bought most of these in the recent months. 70% is in cash because I got this part from my parents for my graduation to eventually buy a flat (with some loan of course) and I am more risk averse with this part of my portfolio. I would invest it in something safe, but currently in the Eurozone (where I live) interest rates are still super low. Any recommendations on what to do with it? Meanwhile I am investing my monthly savings in stocks/ETFs.
Okay thank you so much. That makes sense on timing the market doing that also. We do DCA into market already but we don't have enough to cover our travel + living expenses in 3.5-4% yearly. But seems like if we get there all inclusive then it will pay off big time. Our living expenses are cheap so travel is our big yearly category spender. May I ask what your recommendation would be if we invested about 3/4 of travel fund (would be about 50k). Would you just up your DCA in over 6 months or so? Or just put it in market as a bulk sum. I'd likely just drop it into our "Early retirement" which is SCHB, SCHF, SCHC, SCHE at 70/20/5/5 to consolidate with those funds.
I think you can get more for your diversification back by investing in international developed and emerging small cap value. For example, buying SCHC and DGS have lower correlation with VTI than VXUS. It could allow you to stay 80% US and get the same diversification benefits at 70%. It’s been a few years since, I’ve run the correlation and expected returns, but that’s the general concept.
Good guess, but it is not. My international is in SCHC (small cap ex-US developed) and DGS (EM small cap dividend) with the thinking that small caps are more exposed to their local economy and less correlated with US stocks. I have trust issues with EM companies after seeing too much questionable accounting. I figure a dividend at least means the company is producing cash flows. Both have a small value tilt compared to total international. Then the rest I try to beat the market, but with a small enough potion of my portfolio that I don’t have to stay at my job for decades if I invest poorly. I keep a portfolio of mREIT preferred stocks like DC-X, NLY-F, and NRZ-D to add stability. I sell puts of high IV stocks (theta gang) against the margin of my low volatility holdings. I buy puts on the common stock of mREITs to protect my preferred stock. I also buy a handful of speculative investments. I have a couple of percent in each Bitcoin and GME (direct registered of course). I also have shares in LKQ, an auto recycler that is globally consolidating the mom and pop junk yards.
What is the disadvantage of having a (for example) Vanguard EFT held in a Schwab account? Or likewise, is there any advantage to holding a Schwab ETF in a Schwab account? I live and work overseas and Schwab is the only brokerage that will let me have a non-US address on my account. But I am interested in holding VT as just a single fund where I would have to hold SCHB+SCHF+SCHC+SCHE to do the same thing. From what I have searched, the main drawback I have read is that there is a transaction fee. But that info seems to be out of date as Schwab now has zero commission for online trades. So as far as I can tell, the only disadvantage to cross-brokerage holdings is no longer a disadvantage. Am I missing something obvious?
I’m buying SCHC options because there is literally 0 volume for them and it’s the most retarded thing I can come up with to do today I sincerely do not recommend doing the same
Hoo boy. There is as lot to unpack here. First, I use (and like) Schwab products as well. Do you have 3-months worth of living expenses covered as your emergency fund? If not, fix that first. As for the down payment, the market could potentially help raise funds quicker than a savings account. There's risk, of course. The ETF breakdown you're using looks quite aggressive. First, it's an 85/15 split between equities and bonds. Second, using SCHB over SCHX lends itself to more volatility. That's because SCHB includes small and mid cap equities on the come-up (or down) vs. only focusing on the S&P500 with SCHX. I've read that over time, that extra bit of volatility gives total market indices just a little bit more return. If you want to overweight the small caps, maybe give 5% of your SCHB to SCHA. And if you want to continue with your aggressive track, get that international allocation up to 20% (or higher). I'd do that by putting more toward the emerging markets (SCHE). So a new allocation might look like: 60% SCHB 5% SCHA 10% SCHF 7 SCHE 3% SCHC 15% SCHZ Assuming this is a brokerage account and not an IRA, then definitely go with ETFs for the tax reasons you listed. The rule of thumb is leave mutual funds to IRAs and 401Ks if you really must use them. And that actively managed mutual funds often don't beat the passive indices. I can't think of a reason to *also* put money toward a target date fund since you're actively doing the math and rebalancing every month. This takes a few minutes, really. Plus, you could choose your own level of aggressiveness versus leaving it up to the target funds. By the way, if you DO want a target date, make sure to use the "index" version for the much, much lower expense rate. For example, go with SWYGX vs. SWERX for a 2040 fund. If you're doing $1,000/month... Do the allocating yourself. Skip the target fund. Especially if you plan to use this money well ahead of said date. Also, there are no target date ETFs. Why not throw in some dividends? I'd buy into SCHD and SCHY (international) each month you do this. SCHD would count toward large cap percentages and SCHY would count toward international exposure. You can figure the math. If you want a little extra flavor that pays high-yield dividends... look at one of the "Fallen Angels" bond ETFs. This is a fixed income Personally, I include FALN to my portfolio. would add to your fixed income bond allocation. What you've described is a solid approach to trying to accomplish your goals. I wouldn't even look at "for fun" ETFs. The only caveat to that would be to look at the sectors getting hit hard now (technology in particular) and consider buying discounted prices on something in the red. Clean energy and tech won't stay down forever.
Hi, My wife and I are trying to save for a future down payment to a home, which would be our first home (she is her mid 20s, I am in my early 30s). We already have some emergency funds saved apart in some accessible savings accounts, and we would now like to build some separate savings, invested in the market, for a down payment on a home as we would like to buy (with a mortgage of course) in 4-5 years from now. So the idea is to save a bit each month on our paychecks, not to move the little cash that we already have in our hands, which is strictly for emergencies. For this purpose, we have a brokerage Schwab account for investing a little bit of the money that we put aside each month in the market, as it often beats by quite a lot any other form of savings. The goal is to find an investment strategy which makes sense for our goals, which is not too risky for such a short time frame (its highly possible to see a down market in a 4-5 years period, but in this case we could delay a bit our purchase), and which beats inflation and if possible the increase in the housing market. Let's be clear : 4-5 years is a short period of time for investing, and we understand the fact that the market might take a big dip before we buy. If that happens, we will just buy with our savings not in the market, not using our under-valued stocks and bonds that we will keep. That would be annoying, as that would imply a smaller down payment, so a longer and more expensive mortgage, but that would not be the end of the world either. This is the "3 ETF portfolio" (which happens to be a 5 ETF portfolio in order to achieve that with Schwab) that I currently use for other purpose : \- 68% on SCHB for some diversified US stocks (https://www.schwabassetmanagement.com/products/schb) \- 11% on SCHF for large and mid cap foreign stocks (https://www.schwabassetmanagement.com/products/schf) \- 2% on SCHC for small-cap foreign stock (https://www.schwabassetmanagement.com/products/schc) \- 4% on SCHE for stocks in the emergent markets (https://www.schwabassetmanagement.com/products/sche) \- 15% on SCHZ for US bonds ([https://www.schwabassetmanagement.com/products/schz](https://www.schwabassetmanagement.com/products/schz)). I went to ETFs for the tax efficiency and their very low expense ratio, but it took me a while to decide between them and mutual funds. Any advice on what I did regarding this is welcome too. The reason for the percentages shown above is that I am trying at an approximate \[85% stock / 15% bonds\] and \[80% US / 20% international\] strategy (no international bonds though). So every time I invest some more money, I make sure to re-balance towards these target percentages. I would like something roughly equivalent to this, with a small Expense Ratio, but a little bit easier to manage. That would be cool if we would not have to re-balance as I am doing for my small portfolio (even though it's not a big issue). A good all-in-one solution, like a good target-date mutual fund could be a very good idea for our project for instance. Let's say we will put aside $1k / month on this brokerage for this project. My questions are : 1. Do you have any target-date fund that you would advise for this kind of project? I have considered Schwab Target 2035 Index Fund (SWYFX) and Schwab Target 2030 Index Fund (SWYEX). Their target dates are a bit further away than the date we are aiming for our home (and I know they are a bit more targeted for retirement), so there would some extra risks, but that's because I'd like to benefit from climbing stocks, and 2025 target date funds have just too much bonds in them (which makes sense for retirement, but we'd be willing to take some reasonable risk to make this money grow during 4-5 years). What do you think of this please? 2. Would you advise something else (still in the market please, as we will put aside some money into non-risky savings accounts too, like CDs)? A mutual fund ? A 3 (or 5) funds portfolio as I did for myself? By the way, is there some target-date ETF? I couldn't find them, so I guess this is not a thing. ETF seems to be a bit better for tax purposes, and as we're talking about taxed accounts, that could make more sense, I don't know. 3. Do you have any other suggestion, things to look for, or things to be careful with, please? I would be willing to have something a little bit less aggressive than my (5 ETFs) personal investment strategy as this will be her money too for our common project. But still, we needs to take some risks to make it grow a bit. Any advice on this would be greatly appreciated. I am still a complete novice in investing so I would appreciate ideas regarding which MF or ETFs to chose for this project. Many thanks in advance! :)
I agree with the VXUS comments. But just to give some other alternatives, you can find ETFs that specifically target international developed vs. emerging markets if you want to control your portfolio composition a bit more. Schwab has some: SCHE = emerging SCHF = international developed (large cap) SCHC = international developed (small cap)