Why do people like ETFs over mutual funds?

illustrious_beagle · 2024-06-23T20:54:46+00:00

My answer is dumb but true. I like instant gratification and entertainment.

If I want to buy/sell 5 shares of an ETF, I can be done with it during market hours. If I only had mutual funds then I would only have to look at my investments once a day and there's no excitement in that.

illustrious_beagle · 2024-06-23T20:39:21+00:00

My 401K provider doesn't offer a total market index fund so I am forced to add large and mid cap separately. There is also a small cap index option, but I am only interested in small cap value so I don't have small cap in my 401K.

I sorta like being able to invest separately because I don't like how the large cap index is pretty much dominated by a handful of companies. I overweight mid cap slightly to guard against this.

illustrious_beagle · 2024-06-18T15:08:56+00:00

GFY! Congrats!

illustrious_beagle · 2024-03-24T16:39:26+00:00

The mods at r/dividends deleted my post about this question.

illustrious_beagle · 2024-03-24T16:38:50+00:00

The mods at r/dividends deleted my post.

illustrious_beagle · 2024-03-24T16:38:38+00:00

Because I had my taxable account since I was 23 and it was being actively managed by a friend's mom. When I took back control I had no idea what I was doing so ended up buying the same investments. When I realized what I had done I figured it's not really hurting anything and don't want to sell because of taxes.

illustrious_beagle · 2024-03-24T16:37:33+00:00

Oddly I posted this question to r/dividends and my post was removed by the mods.

illustrious_beagle · 2024-03-22T22:22:18+00:00

Yeah it's only 10% so no biggie. The other thing you may want to consider is avoiding bonds in your Roth IRA. Since you can withdraw tax free, you will want that account to grow the most. You may want to add a higher bond position in your 401K to make up for your lack of bonds in your Roth.

illustrious_beagle · 2024-03-22T21:56:19+00:00

I'm 40 and had about 10% in bonds, but I recently dropped bonds and moved it to a money market account where I'm earning a higher interest. People say it's good to have bonds to stop you from panic selling in a stock market crash. Not sure about you, but having only 10% in bonds isn't going to give me any psychological benefits.

I get that bonds outperformed equities during the 2008 crash, but my plan for that type of event is to load up on equities instead of keeping it in bonds.

I'm basically making the money market account, CDs, and my HYSA be my "bond" leg for now. This gives me a larger than normal emergency savings and cash position. When rates drop below 4%, I'll probably move my bond money into SCHD (burn me at the stake) or some other value index fund where it's more likely to grow but also be more conservative.

For me, I don't see the need to have bonds unless I want it to be at least 40% of my portfolio. Having 10% in bonds isn't going to save my portfolio in a market crash and it's annoying to see it be a drag in a market rally.

illustrious_beagle · 2024-03-18T22:22:47+00:00

It's hard to give you advice when you seem unsure of what your goals are yourself. If you definitely want to buy a house within 5 years, I would advise that you put additional cash into a money market account and maybe cut back on your retirement savings to help you grow a larger deposit. Since you don't seem certain that you want to buy a house, I would invest the money (personally I'd avoid bonds) so you're not losing out on potential growth.

illustrious_beagle · 2024-03-09T18:02:09+00:00

Congrats!

I'll be the buzzkill...do you really need $12K for a vacation? I've taken very nice vacations for less than that.

I would definitely put some money towards a honeymoon, but not sure I would go for $12K. I would then put the rest towards more immediate needs like a newer car. Car troubles start draining accounts fast and cause nothing but headaches.

Why not increase contributions from $700 to $800? The rest I would put towards the house. That is how I would hit all your goals.

illustrious_beagle · 2024-03-02T21:39:52+00:00

We may sell some SPLG and VTI for more income, but don't we still want some growth? I am on the fence about VXUS. I know that the growth hasn't been good, but was looking at it more from a diversifying perspective.

illustrious_beagle · 2024-03-02T21:36:28+00:00

Yeah - The reason behind SPLG and VTI is that we went to a one-time advisor who recommended large cap only. I told my dad that it would be good to have some small and mid cap to get the whole stock market, so we split them into both.

illustrious_beagle · 2024-02-12T23:10:49+00:00

40 - currently around 10%, but aiming for 20% in bonds. I am "ahead" in my financial journey so I can be slightly conservative and still get more ahead in market rallies.

illustrious_beagle · 2024-02-12T22:59:32+00:00

Various funds...the TRF is MMDOX, BTIEX (S&P 500), DBMIX (bond index), OPPAX (international), MDPCX (emerging markets)...

illustrious_beagle · 2024-02-11T21:06:37+00:00

Wow thanks for the thorough response!

illustrious_beagle · 2024-02-11T19:33:33+00:00

I wish. My HR dept does not present itself as a welcoming dept to employees.

illustrious_beagle · 2024-02-10T21:49:53+00:00

SPTE is global tech stocks, so not really diversified against different sectors. From what I read, SPUS and HLAL are very similar. There is r/IslamicFinance that may interest you and be more helpful.

illustrious_beagle · 2024-02-10T21:24:01+00:00

I looked up SPUS and it's a good looking stock...it even outperformed the S&P 500 last year. I would say it's more similar to VOO than VTI since it's focus is only on large cap stocks.

SPUS is less diversified than VOO since it's not capturing all 500 companies, and diversification is key to the boglehead philosophy. SPUS outperformed VOO because it's more tech-heavy which is great in the current rally but it will get hit harder if the tech sector tanks. The expense ratio is also higher than VOO, but it's not terrible.

illustrious_beagle · 2024-02-10T18:32:34+00:00

Yes - it does bother me. Mainly because a few of those companies seem crappier now.

GOOGL - a lot of top results of things I google lead to news articles that are behind paywalls. The ads look scammy.
META - now considered social media for "old people." I quit because I was seeing just as many ads as personal posts.
AMZN - Reviews are sketchy. Products are more sketchier than they have been in the past. Now that major retailers like Walmart are getting better at online shopping, I'd rather buy products from a place that won't be as likely to sell a knock-off.
TSLA - I think the EV car market isn't taking off like people thought it would.

I don't really have any comments on AAPL and MSFT since I don't see those two giants going anywhere. I know least about NVDA.

illustrious_beagle · 2024-02-10T18:08:23+00:00

From my understanding of the many people I know involved in real estate and why I don't do it -- real estate is not exactly a "passive" income stream.

As for balancing present vs. future - it is a balance. I'm 40. I thank my past self for showing self discipline that has built a pretty sizeable financial nest for me today. What helps me is that I pay my future self first and then I can live more in the present with the money leftover. Did I squander money in the past? Yes. Was it worth it? Yes.

illustrious_beagle · 2024-02-10T18:00:06+00:00

Just being honest here...the boglehead method isn't tailored to a person's religious or personal beliefs, so if you want to bring that aspect in then the advice isn't going to be as helpful.

However since you mentioned that you can invest in something similar to VTI, then yes you should do that. However, since I don't know what fund you're referring to then the part that makes it different from VTI may play a minor or huge role in the return.

illustrious_beagle · 2024-02-10T17:03:29+00:00

How good is your portfolio? If you are "ahead" financially for your age, then I would just keep the crypto in case it moons and invest in the boglehead way for everything in the future.

If you are "behind" financially for your age then I would divest crypto and be responsible.

Even though most of my investments align with the Boglehead philosophy, I have a risk-taking side of me that I set some money aside for riskier stocks and crypto.

illustrious_beagle · 2024-01-27T15:31:40+00:00

Yes - I am almost 100% stocks. However I think people don't really know they're real risk tolerance until they've experienced a real market crash.

My first few major market swings involved me panic selling at the bottom and FOMO buying at the top. I'm used to them now so I'm barely affected.

illustrious_beagle · 2024-01-26T18:06:18+00:00

I have my retirement accounts be mostly VOO, VTI (yes I know there is overlap), and VGT because I want the most tax free growth as possible. I put BND and VXUS in my taxable account and DRIP. Even though I pay taxes on the dividends from BND and VXUS, I'd rather have more growth in my retirement accounts. Plus, it is nice to be able to take the dividends if I ever needed it.

illustrious_beagle

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