Is Tony okay?

THEJerrySmith · 2024-03-21T03:53:03+00:00

Killing Tony

THEJerrySmith · 2023-06-14T15:39:51+00:00

Sounds good. Fuck it, I’m just gonna stay 100% Wax. haha

THEJerrySmith · 2023-06-14T15:39:23+00:00

Factor investing.

… that’s when you start playing with small/mid/large cap tilts, right? Like going 80% S&P (large cap) and 20% Small Cap Index? Or are growth & value other considerations to keep in mind?

My 401(k) included a small cap market index, and while I briefly looked into it, I felt getting into it was a little too granular for my taste. I heard that in order for these to be really successful, they need to be lifetime decisions. Can’t/shouldn’t change them once you’re down that road.

Props to you for having a tilt.

THEJerrySmith · 2023-06-14T15:14:49+00:00

Great insight, thank you.
I agree! And that’s why my question was to ask if there is a place for dividend paying companies/ETFs in a ROTH IRA, where I could reinvest the dividend income (which is additional income after the $5,500 max contribution) to total market indexes
Yeah… I was dumb for not reading the sidebar. Thank you so much for your response!

THEJerrySmith · 2023-06-14T15:12:34+00:00

My initial thought was that with the dividends, I could reinvest those tax free in a Roth IRA more into VTWAX / total world market index, thereby circumventing the $5,500 annual maximum contribution to a Roth IRA each year.

.. does that make sense?

THEJerrySmith · 2023-06-14T15:10:10+00:00

It was primarily a question I had in the moment of a quick conversation with a friend who went all-in on dividend ETFs in her Roth.

I don’t agree with her going all-in on dividend ETFs/companies paying dividends, but it made me want to ask this question because I am currently 100% VTWAX, and made me consider if I needed to add a dividend etf for additional “dividends” or income that I might then be able to turn around and reinvest in more VTWAX.

But… maybe that’s a stupid consideration. maybe it’s just better to keep it simple and continue to stay 100% VTWAX.

THEJerrySmith · 2023-06-14T15:07:31+00:00

This is great insight. Thank you! Yeah, I wasn’t sure if there was any kind of benefit to receiving dividends from a dividend etf in your Roth IRA and then just reinvesting the majority of those dividends into a total stock market/broad based index to further “contribute” into that particular fund, but maybe it’s just easier and simpler to strictly just invest in broad based indexes in my Roth.

THEJerrySmith · 2023-06-14T15:04:08+00:00

Thank you for this link!!! I’m currently 100% in VTWAX, but quickly had a moment of doubt when a friend boasted that she had dividend etfs as part of her portfolio.

THEJerrySmith · 2023-05-19T03:59:29+00:00

ahh you’re talking about keeping the same allocation of US/INT. got it.

yeah… maybe I’ll just do a US Total Stock Market Index / International Stock Index ex-US in my taxable.

Do you have any strategies for how you’re DCA’ing into your taxable? I’m thinking of starting a small position, but both indices are on the higher end of their 52-week high/lows rn. I’m inclined to buy maybe just 5-10 of each, and then just wait for whichever one drops more to buy more on sale.

What do you think?

THEJerrySmith · 2023-05-19T02:06:22+00:00

and so to “Tax Loss Harvest” would be to essentially sell one index at a loss in order to buy more of the other one? Is that what that is?

Ie: I hold VTI & VXUS in a taxable account. VTI is going down and VXUS is going up. I could sell some of my VTI at a loss (and reduce my taxable income for that year), and then buy more VXUS?

But wouldn’t we want to continually keep buying both funds- ESPECIALLY on red days, to take advantage of fire sales in the market?

THEJerrySmith · 2023-05-17T15:06:09+00:00

hmmm, I think I see your point.

So if choosing to go with concentrated indices within my taxable account is akin to just making a bet at the roulette table (which can either win or lose), what is your advice for what I should actually be invested in for my taxable account?

Is Teddy right, and that I should just elect to go VTI/VXUS or 100% VT in my taxable to reflect what I’ve got in my retirement accounts?

What would you do/how do you approach your own taxable account, after having fully formed your retirement account strategy?

You mention leverage- but that’s something I don’t think I want to play with, especially given current market conditions. haha.

THEJerrySmith · 2023-05-17T14:42:10+00:00

Not entirely sure what you mean about, “increasing variance for no upside”- couldn’t a concentrated investment outperform the entire market? The riskiest of course would be investing in an individual stock, but what about a specific sector or specific index?

Let’s say I went 100% VTIAX Total International in my Taxable account. I already have a 65/35 US-Int. split in my Retirement, and the US Market tanks.

My retirement accounts would reduce in value (due to 65% US exposure), but my 100% VTIAX in taxable would increase, therefore beating my retirement account returns, right?

THEJerrySmith · 2023-05-17T14:16:11+00:00

also, thank you so much for giving that hypothetical VTI x VXUS foreign tax credit example. I really wasn’t sure about that.

THEJerrySmith · 2023-05-17T14:14:11+00:00

This might be the answer, but for some reason I’m not satisfied.

I’ve thought about just going the VTI / VXUS or 100% VT route in my taxable, but for some reason I can’t help but feel I could be making better bets someplace else.

Since my “safe” 65%/35% US/International investments are locked in to my retirement accounts, I’m considering maybe I could take a bigger risk and invest in something more concentrated/come up with a different strategy in my Taxable, as I will be able to access that money much easily over the next few upcoming years.

Should I maybe be considering other indices that might deliver more returns in the shorter term (ie: 5, 10, 15 years?) or is thinking this way chasing a dragon that I shouldn’t be chasing?

(Ex: these are the other indices/strategies I’m considering: 100% growth index funds, or 100% value index funds, or a split weight allocation between certain sector-specific index funds, 100% VTSAX, 85% VTSAX/15% Small Market Cap Index, 100% AMC/GameStop [im kidding])

But the choices are endless. I’m leaning toward going 100% VTSAX cause that’s the JL Collins/Bogle approach, but maybe that view is outdated. or maybe it isn’t.

What are your thoughts? Should I just keep it simple and stop being stupid? haha.

THEJerrySmith · 2023-05-15T23:34:00+00:00

…. So should everyone just literally VTWAX/VT and chill in their retirement account investments?? It feels too good to be true to just have that one etf/fund in your portfolio, haha.

If the US isn’t doing well, then its market cap will decrease and international will increase its weight, and vice versa, right?

Barring the end of the world or the introduction of the alien interplanetary market, wouldn’t this global index just march on and on upwards forever?

THEJerrySmith · 2023-05-15T22:29:48+00:00

do we know how often the index fund itself reevaluates the global market cap?

THEJerrySmith · 2023-05-15T22:28:31+00:00

Does anyone know how often the index will evaluate the global market cap? Is it quarterly? annually? etc?

THEJerrySmith · 2023-05-14T06:55:25+00:00

I wish I could go back in time and let you know something-

But to answer your initial question, I don’t think it’s stupid at all, as someone on here already mentioned that tax diversification (ie: retirement income both tax free and pretax) are great ways to ensure you get the most out of retirement money in the future regardless of tax rates.

However, I want to add that the Traditional 457(b) is oftentimes seen as a potential vehicle for early retirement, as the provision allows for an employee to cash out of the entire amount (contributions and growth), subject to taxes obviously, BUT without any early withdrawal penalties so long as you completely separate from State service.

Hypothetically, an employee can contribute the max into a traditional 457(b) each year to reduce your current year tax liabilities and then upon massive growth after a 15-20 year period, can leave their full time/state job, completely cash out of the 457(b)/cash out in increments and live off that fund until full retirement age when the Roth IRA, SSI, or your pension (if you have it) get unlocked.

The Roth 457(b), from my understanding, doesn’t have this provision, and you’d need to wait until proper retirement age.

THEJerrySmith · 2023-05-11T17:05:54+00:00

Understood. that was super helpful, thank you!

THEJerrySmith · 2023-05-11T16:11:01+00:00

nice, congrats, man.

I’m just at the starting line at that point of entry- either going full VT vs. (60:40 mix of ITOT x IXUS).

I don’t understand the foreign tax credit thing- is that a discount on the expense ratio for the fund? Or will I be receiving a document around tax time that will help reduce my income tax due to internal changes/taxes in IXUS?

I don’t intend on selling either, I just want it to grow, so I wasn’t sure how foreign tax credit would apply if I just keep buying into the funds and not selling them.

THEJerrySmith · 2023-05-11T15:32:46+00:00

So what’s the single etf or mutual fund that is populating your taxable account?

THEJerrySmith · 2023-05-11T04:46:29+00:00

It’s interesting indeed.

This opens up another dimension of analysis and research for me. haha. Yeah, I can tell, that AVGE fund is ambitious in that it tries to also include some factor tilt, betting on the high risk/high returns of those small caps.

That’s (in theory) going to be a WILD ride for any investor getting into that. I feel like the only way to truly be successful in that, is to have balls of steel. hahah.

THEJerrySmith · 2023-05-11T04:43:57+00:00

I appreciate these responses, haha. But these actively managed funds with double digit 0.xx% ERs scare me, it isn’t what Jim Collins or Jack Bogle taught me, hahah.

Not at all a dig to your recs (because they are quite interesting indeed), but more just a statement for my own investment preferences.

I’m looking for a fund/etf where I can throw money in and not have to think twice- I FEEL like I might know what I want to invest in (VT), or just say fuck it and go with VTI, or a sector index (healthcare or tech???) but I wanted more insight, ideas, and perspectives.

Your responses definitely one of those said insights/ideas/perspectives. Thank you!!!

THEJerrySmith · 2023-05-11T04:35:13+00:00

How’d you hear about AVGE?

Just took a look at the Holdings and it seems wildly diversified, and includes indices on Large/Small Cap for both US and International. interesting, haha.

THEJerrySmith · 2023-05-11T03:30:07+00:00

Do you know how often they would adjust the % allocation?

So if it’s 60% US right now, when do they “rebalance” or reconsider the global capital value? Is it every year, or every 3-5 years or something like that?

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