I believe Jack Bogle's recommendation with respect to international was to go no higher than 20% of the EQUITY total, not 20% of the whole portfolio. "I recommend that [International stocks] account for no more than about 20 percent of your own equity portfolio." from The Little Book of Common Sense Investing.
안녕 Tae! New subscriber here 🤩I got started late in investing (in my late thirties, 42 now) and I have VTSAX in my Roth IRA and just recently invested in VFORX in my Roth. My question is if this is redundant? In other words, should I just keep the VFORX or keep both? After watching this video I am considering adding VBTLX. 감사해요!
Here is my 2024 Main portfolio break down: 1. **Foundation (VOO)**: - **Percentage**: 55% - **Focus**: Provides broad market exposure to the largest U.S. companies, serving as the stable foundation of your portfolio. 2. **Growth**: - **Total Allocation**: 35% - **VGT**: 30% of the growth segment - **QQQM**: 30% of the growth segment - **SOXQ**: 26% of the growth segment - **Amazon**: 5% - **Meta**: 5% - **Tesla**: 4% - **Focus**: This segment includes ETFs targeting technology and semiconductors, as well as direct investments in Amazon, Meta, and Tesla, aligning with sectors known for rapid growth. 3. **Dividend (DGRO, SCHD)**: - **Percentage**: 10% - **Focus**: Equally divided between DGRO and SCHD, these ETFs provide income through dividends, enhancing portfolio income and reducing volatility.
Hello Tae. I really love your channel. I am a long time Vanguard account holder. The only thing I would say is please slow down your rate of speech. It is hard for me to catch everything when you speak so quickly. Keep up the good work!
I like the "slow and steady" approach and makes sense for an investor like me in retirement. I'm a fan of both companies BUT upon review in doing some research the Fidelity funds in your 5 to hold forever seemed to have greater risk percentages than upside? Otherwise, I thought your material was good.
I understand the reason(s) behind an international fund, but I choose not to hold any of them at all. It is a personal decision, but after 5 years of nothing but falling behind I said that was enough. Those 5 years are from '10-'15.
Thanks for your videos. Your videos cover important ground, and are very clear. Sorry, I do have a "but". What's your argument against Vanguard's huge actively managed funds VWIAX, VWENX and VGSTX? I lot of proven performance for minimal cost. Do you think individual investors can get better risk corrected returns by building their own index fund portfolios?
Great info! I have one question tho. If I hold a certain percentage of VBTLX in my roth account, will it still grow tax free? You said it is not tax efficient at 14:30 so I'm a little confused.
“Not tax efficient” means don’t hold VBTLX in a taxable account due to higher turnover which triggers capital gains taxes every year. If you hold VBTLX in a Roth account the higher turnover doesn’t matter, you won’t pay any taxes. Everything in Roth grows tax free.
Serious question: How do I setup all 3 funds in my Roth if they all have a 3k minimum investment? That’s 9k to setup this initial 3 part portfolio. Max contribution is only 6k in my Roth 🤔
Just do two funds for the first year and add the third the next year for your Roth IRA account. US stock market is a little precarious right now, so maybe start with the international stocks and bonds first. If the US market goes down, you can add US stocks at a discount next year.
Some other index funds might not have a minimum. I’m with Schwab and the three index funds that equate to these Vanguard ones only have a $1 minimum investment on them.
I have one question : what is meant by placing VBTLX in a tax advantage account. Do you mean I use money in tax-advantage account to invest in VBTLX . I am new to investments. TIA.
If each of the Vanguard funds have a $3000 minimum and I want to build a 90/10 portfolio of VTSAX and VBTLX does that mean I would need $30,000 to initially fund the portfolio? The initial asset mix in that case would be $27,000 of VTSAX (90%) and $3000 of VBTLX (10%). The $0 min of Fidelity index funds seem a better entry point to starting a brokerage account than Vanguard for an investor like myself with limited starting capital.
because bonds and stocks are historically inversely correlated. When one is up, the other is down; when you combine this with portfolio rebalancing, holding bonds can allow you to accumulate more stocks when the stocks are low. Lets say the stock market has a bad year, and your stocks are down 30%, but your bonds are relatively flat. When you look at your portfolio that started out 80% stock, 20% bonds you will notice that now, by value, you have a higher percentage of bonds (as compared to the initial 20%) and a lower percentage of stocks (as compared to the original 80%). So you sell off the bond fund to get it back down to 20% and use that money to buy stocks, which are cheap now because they had a bad year. Now you have many more shares of stocks, so that the next year, when stocks do well you get more growth. And vice versa. You rebalance at a regular interval, which insures that you are always buying whichever asset is priced more cheaply relative to the other. Basically, the bonds can act as a store of value for when the stocks are down hard, and allow you to purchase more shares of cheap stocks in the downturns. In theory this works with global equities as well; when the U.S. is doing well you will have excess purchasing power to buy cheap foreign stocks, and then when you get huge percentage gains from those developing economies you can accumulate more American equities. However, there is some school of thought that says the world is becoming more globally connected, and that international and domestic stocks actually correlate closely, such that they both rise and fall together, which negates the advantage.
@@austinfehr9447 Thank you! May i ask what about a Portfolio only with international Stocks and international Bonds ? Does the rebalencing make sense too ? Thank you and greetings from Germany ;)
I personally haven't found a good reason for an international index fund. I've invested in one for the past 15-20 years, but to me it seems like as US stocks go so does the rest of the world. And I've moved away from vbtlx to vwenx to try to keep pace w/ inflation. As for my Roth I'm looking for high dividend producer w/ low expense fees like vexrx, vwenx, and vwuax.
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So I’ve just found your channel and I can say that I’ve watched 100’s of financial DIY videos…You Sir hit a home run with this one. Well done!
Thanks for including the Fidelity funds, though you can hold the Vanguard funds in a Fidelity account as well as Blackrock equivalents.
Finally somebody that knows what he's talking about and can break down all details.
This video answered all the questions I had in my mind. Thank you, Tae!
I've watched about 15 of your vids so far! best financial advisor on youtube.
I believe Jack Bogle's recommendation with respect to international was to go no higher than 20% of the EQUITY total, not 20% of the whole portfolio. "I recommend that [International stocks] account for no more than about 20 percent of your own equity portfolio." from The Little Book of Common Sense Investing.
Thank you so much. Your videos are really insightful.
안녕 Tae! New subscriber here 🤩I got started late in investing (in my late thirties, 42 now) and I have VTSAX in my Roth IRA and just recently invested in VFORX in my Roth. My question is if this is redundant? In other words, should I just keep the VFORX or keep both? After watching this video I am considering adding VBTLX. 감사해요!
Here is my 2024 Main portfolio break down:
1. **Foundation (VOO)**:
- **Percentage**: 55%
- **Focus**: Provides broad market exposure to the largest U.S. companies, serving as the stable foundation of your portfolio.
2. **Growth**:
- **Total Allocation**: 35%
- **VGT**: 30% of the growth segment
- **QQQM**: 30% of the growth segment
- **SOXQ**: 26% of the growth segment
- **Amazon**: 5%
- **Meta**: 5%
- **Tesla**: 4%
- **Focus**: This segment includes ETFs targeting technology and semiconductors, as well as direct investments in Amazon, Meta, and Tesla, aligning with sectors known for rapid growth.
3. **Dividend (DGRO, SCHD)**:
- **Percentage**: 10%
- **Focus**: Equally divided between DGRO and SCHD, these ETFs provide income through dividends, enhancing portfolio income and reducing volatility.
Hello Tae. I really love your channel. I am a long time Vanguard account holder. The only thing I would say is please slow down your rate of speech. It is hard for me to catch everything when you speak so quickly. Keep up the good work!
Just so you know, you can click on right bottom corner fo the video screen where settings are and change the speed to your liking.
I like the "slow and steady" approach and makes sense for an investor like me in retirement. I'm a fan of both companies BUT upon review in doing some research the Fidelity funds in your 5 to hold forever seemed to have greater risk percentages than upside? Otherwise, I thought your material was good.
Great info. So I should max out my roth RIA before I invest in VTSAX, VBTLX, VTIAX or invest in those through my Roth RIA?
Invest in those in your Roth. I’m doing so in my Roth and my 401K
I understand the reason(s) behind an international fund, but I choose not to hold any of them at all. It is a personal decision, but after 5 years of nothing but falling behind I said that was enough. Those 5 years are from '10-'15.
Hi Tae, Thank you for your content. Do you still recommend vbtlx as 1 of the 3? Since 2012 it's up, but since mid 2020 it's been tough. Thx, Tom
Great video! Learned so much and love the graphics. New subbie ❤
Thanks for your videos. Your videos cover important ground, and are very clear. Sorry, I do have a "but". What's your argument against Vanguard's huge actively managed funds VWIAX, VWENX and VGSTX? I lot of proven performance for minimal cost. Do you think individual investors can get better risk corrected returns by building their own index fund portfolios?
virtually no difference. If that is your preference, go with it.
Is it recommended to hold this 3 fund combination in a Roth IRA or regular individual account?
Why do you choose regular index funds over their ETFs? Example VTSAX vs VTI. The expense ratio is lower on the ETFs it seems.
Hey, I enjoy watching your videos! Are you in audea btw?
Great info! I have one question tho. If I hold a certain percentage of VBTLX in my roth account, will it still grow tax free? You said it is not tax efficient at 14:30 so I'm a little confused.
“Not tax efficient” means don’t hold VBTLX in a taxable account due to higher turnover which triggers capital gains taxes every year.
If you hold VBTLX in a Roth account the higher turnover doesn’t matter, you won’t pay any taxes. Everything in Roth grows tax free.
1. VTSAX
2. VBTLX
3. VTIAX
Would probably be a good idea to throw a reit in there or no
Why not just buy VSMGX and let Vanguard do the allocations?
Can i still invest in those fonds if i m not living in usa?
Thank you so much Tae
Well put
100% index fund. I want to retire in early 60s.
Why VTSAX instead of VTI?
Serious question: How do I setup all 3 funds in my Roth if they all have a 3k minimum investment? That’s 9k to setup this initial 3 part portfolio. Max contribution is only 6k in my Roth 🤔
Just do two funds for the first year and add the third the next year for your Roth IRA account. US stock market is a little precarious right now, so maybe start with the international stocks and bonds first. If the US market goes down, you can add US stocks at a discount next year.
Some other index funds might not have a minimum. I’m with Schwab and the three index funds that equate to these Vanguard ones only have a $1 minimum investment on them.
@@84rinne_moo I’m with Schwab as well. Besides SWPPX what other ones are similar to the one in the video?
Buy the ETF versions VTI or VOO, VXUS or VEA, and BND.
@@youngjedi5599 SWTSX total market SWISX total intl SWAGX bond fund are the ones I use.
Great info 👍
Why not just etfs ?
I have one question : what is meant by placing VBTLX in a tax advantage account. Do you mean I use money in tax-advantage account to invest in VBTLX . I am new to investments. TIA.
It means hold it in a ROTH IRA or ROTH 401k so the gains aren’t taxed.
Great video always. You should have millions viewers
Hello, do you have to invest with Vanguard to invest in the Vanguard indexes you suggest in this video? Can you invest in them with Schwab?
Yeah you probably need to pay like $20-$25 bucks or something just check with Schwab
great video
It has been shown that using an annuity as a major component of your bond segment improve overall returns due to the stability of the annuity.
If each of the Vanguard funds have a $3000 minimum and I want to build a 90/10 portfolio of VTSAX and VBTLX does that mean I would need $30,000 to initially fund the portfolio? The initial asset mix in that case would be $27,000 of VTSAX (90%) and $3000 of VBTLX (10%). The $0 min of Fidelity index funds seem a better entry point to starting a brokerage account than Vanguard for an investor like myself with limited starting capital.
I agree, FXNAX, FTIHX, and FXNAX.
FSKAX, FTIHX, and FXNAX.
Serious question: Why would I invest ANY money in bonds (ibonds aside) until the yields catch up with inflation AND inflation takes a breather?
Because your not suppose to be investing for the short term your thinking too small your suppose to think about a 20year span
because bonds and stocks are historically inversely correlated. When one is up, the other is down; when you combine this with portfolio rebalancing, holding bonds can allow you to accumulate more stocks when the stocks are low. Lets say the stock market has a bad year, and your stocks are down 30%, but your bonds are relatively flat. When you look at your portfolio that started out 80% stock, 20% bonds you will notice that now, by value, you have a higher percentage of bonds (as compared to the initial 20%) and a lower percentage of stocks (as compared to the original 80%). So you sell off the bond fund to get it back down to 20% and use that money to buy stocks, which are cheap now because they had a bad year. Now you have many more shares of stocks, so that the next year, when stocks do well you get more growth. And vice versa. You rebalance at a regular interval, which insures that you are always buying whichever asset is priced more cheaply relative to the other.
Basically, the bonds can act as a store of value for when the stocks are down hard, and allow you to purchase more shares of cheap stocks in the downturns. In theory this works with global equities as well; when the U.S. is doing well you will have excess purchasing power to buy cheap foreign stocks, and then when you get huge percentage gains from those developing economies you can accumulate more American equities. However, there is some school of thought that says the world is becoming more globally connected, and that international and domestic stocks actually correlate closely, such that they both rise and fall together, which negates the advantage.
@@austinfehr9447 Thank you! May i ask what about a Portfolio only with international Stocks and international Bonds ? Does the rebalencing make sense too ? Thank you and greetings from Germany ;)
@@in_my_mind7781 yessir
@@austinfehr9447 Thx Buddy
I personally haven't found a good reason for an international index fund. I've invested in one for the past 15-20 years, but to me it seems like as US stocks go so does the rest of the world. And I've moved away from vbtlx to vwenx to try to keep pace w/ inflation. As for my Roth I'm looking for high dividend producer w/ low expense fees like vexrx, vwenx, and vwuax.
Financial advisors don’t want you to watch this
💵🐢💵🐢💵🐢🥳