Vangard ETF

[Anonymous No.635722]

You all talk about Vanguard this, Vanguard that, but which ones do you specifically endorse?
S&P 500 index ETF @ 29.77%?

[Anonymous No.635737]

You don't build a well-diversified portfolio with one fund or one ETF. (Well, there's all-in-one funds, of course But that's another issue altogether.)

Try googling "Three Fund Portfolio.". Feel free to ask follow-up questions as needed.

[Anonymous No.635740]

>>635737
This. Bogleheads has good information on allocations as well.

[Anonymous No.635807]

>>635722
VOO

When you have 10k in, then you can worry about bonds.

[Anonymous No.635862]

>>635722

[Anonymous No.635866]

>>635737
Let's say you did 33/33/33% (just hypothetically). How would you re-balance to always have 33%? What if one went to 25%, and another to 41%? Then you'd want to re-balance to 33% each again, or whatever allocation you had. But then you'd get taxed on it, right? Fuck.

[Anonymous No.635882]

VOOG is my ETF of choice.

[Anonymous No.635898]

>>635866

Also curious.

[Anonymous No.635902]

>>635866
Not unless its in a TFSA

[Anonymous No.635918]

>>635866
>>635898
There's two way to rebalance a portfolio (which only has to be done once or year, or even every other year depending on how out of balance you are).

1. Sell the fund that it over-allocated, and purchase the fund that is under-allocated. This will indeed incur capital gains unless this is in a tax-advantaged account (401k, IRA, TFSA).

2. Put new money into the under-allocated fund unless balance is restored. This has no tax consequences even in a taxable account.

You should be trying to do #2 as much as possible, since it will also boost your overall investment portfolio. Since you should be investing new money every year, you simply use that as an opportunity to rebalance too.

[Anonymous No.635923]

>>635866
>>635898
There's two ways to rebalance a portfolio (which only has to be done once or year, or even every other year depending on how out of balance you are).

1. Sell the fund that is over-allocated, and purchase the fund that is under-allocated. This will indeed incur capital gains unless this is in a tax-advantaged account (401k, IRA, TFSA).

2. Put new money into the under-allocated fund until balance is restored. This has no tax consequences even in a taxable account.

You should be trying to do #2 as much as possible, since it will also boost your overall investment portfolio. Since you should be investing new money every year, you simply use that as an opportunity to rebalance too.

[Anonymous No.635961]

>>635898
>>635902
>>635918
>>635923
Eurofag here (I asked the question). There's indeed a tax-advantaged account that will let me re-balance funds and even ETFs (like Vanguard, which is only avaliable in that form here) tax-free except for a nominal (or is it every quarter?) total tax of the account.

They calculate gains for a quarter of the year, and then tax that or something. I haven't read much yet, because I'm not getting into it right now, but it seems like the tax on it is pretty low.. seems like 0.12% taxes (some sign says 0.27%, but if I calculate their example, it turns out 0.12%). Their example was, someone puts 30k (of my currency) into their account, out of that, 7500 is counted as income and is then taxed for a total of 38 (assuming a prime rate of 1.7% - currently, it's at 0%). The only downside is, the 0.12% (0.27%?) is paid every year, regardless of wether you made or lost money. It's simply a percentage of the current balance, no matter what you did (even if you just deposited money, and made no gains at all, as in the example).

I'm just theorizing here, but wouldn't you technically be selling high and buying low, if you re-balance? One goes up, another goes down, you sell off the one that went up to buy the one that went down?

[Anonymous No.635965]

>>635722

VTI, VOO BND

[Anonymous No.635968]

>>635961
>one goes up, another goes down
>don't touch the "up" fund
>buy more of the "down" fund with fresh money from your regular income
>funds are rebalanced
>no tax is due

Do this every month of your life

[Anonymous No.635971]

>>635968
Yeah, neat. Except I don't care if I sell something, with this kind of account. There's never any tax due. It's always taxed 0.12% a year (depending on the interest current rate), and as long as the interest rate of the country is lower than what I make (currently at 0%, but normally under 1% at least), it doesn't matter what I do.

So, then, with no taxes on selling, would it not be benificial to rebalance in favour of the weaker part of your portfolio (assuming they move in somewhat opposite ways/one goes up and another goes down)? Would it not be like selling high and buying low?

[Anonymous No.635984]

>>635971
In theory, yes. But your new money has to go somewhere. So rebalance first with your new money, then sell any excess overperformers needed to get to your target allocations.

[Anonymous No.636009]

>>635722
>@ 29.77%
What does this relate to in the S&P 500 or Vanguard.

[Anonymous No.636030]

>>635984
Yeah, that's a good idea. I wasn't meaning to say it wasn't. I just meant (what I was asking about), since I "researched" (googled) and found that there is indeed an account that lets you do anything you like without change in taxes, isn't it best to rebalance this stuff as soon as any major changes like that happen?

Should one still stick to it once a month, base it on events/bigger differences, or is it best to try to continually (maybe every week or however often you feel like doing it) adjust the percentages? It's just a bit of clicking and whatnot, so the actual work of doing it would be worth the extra 0.whatever% you'd get out of it, no?

In any case, this seems good. I was worried about the whole 30% tax bullshit, and how to rebalance, but hey, there's the answer. Now I just need money to actually invest, too.

[Anonymous No.636063]

>>636030
>isn't it best to rebalance this stuff as soon as any major changes like that happen?
I'm not aware of any research that suggests its more beneficial to rebalance on a more frequent basis (even with no tax consequences or transaction fees).

I'm not saying its wrong or worse to rebalance frequently, just that there's no real evidence either way (AFAIK).

[Anonymous No.636071]

>>636063
There's actually no evidence for re-balancing at all.
>>636009
Please OP, answer. It's a splinter in my mind right now.

[Anonymous No.636078]

>>635722
I use Sharebuilder which has a neat feature that lets you build a portfolio instantly of a diverse amount of ETFs. I like Vanguard because of the low expense ratios. The commission cost to use the ETF feature is a little higher than their regular for one trade (18.95 vs. 6.95) but it lets you buy 8 so it's pretty good for a onetime buy.

Pic related is my picks.

[Anonymous No.636093]

>>636063
Yeah, if I had read anything I wouldn't have theorized. But I figured since you're essentially selling high and buying low, you're growing your account at a faster rate than if you just let your savings naturally fluctuate with the market.

Are there any kinds of simulators that will let you test things like this? (Setting it not count any taxes)

>>636071
>There's actually no evidence for re-balancing at all.
Well, it keeps your allocation as intended, for one.

[Anonymous No.636122]

Ukfag here.

I'm 20, 21 in April, and have about 10k I want to invest in some form of Index fund, something that is low hassle, low commission, returns a competitive rate, and I can leave to accumulate compound interest over 5 years or so until I need it.

What would people recommend?

[Anonymous No.636540]

>>636078
allowing a loss of 17%? seriously?

[Anonymous No.636757]

Now hold the fuck up.

Why would you ever need to rebalance? Put 1/3-1/3-1/3 in each of your funds. Why specifically pour more money into a fund that doesn't perform as well as the others?

[Anonymous No.636832]

>>636757
Because from year to year, the market segments that perform better will change. Last year's zero may be this year's hero.

Also, people use allocations to achieve a certain risk and income profile. When the allocations get out of alignment, they aren't matching their strategy.

[Anonymous No.637577]

>>636832
Interesting point, didn't think about that.

[Anonymous No.637626]

OP here, surely im not hallucinating. See for yourself.

https://www.vanguardcanada.ca/individual/etfs/etfs.htm

[Anonymous No.637648]

>>636071
>There's actually no evidence for re-balancing at all.

Yes there is. See >>636832

Rebalancing your portfolio ensures you buy low. If a fund is underperforming, don't sell, double down. In the long run it will come back up and you'll have gotten in on it when it was low.