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  • jacoavlu
    replied
    Originally posted by Max Power View Post
    You could buy SCHX or ITOT with the tiny amount left... with no more trade fees, buying one or two shares is not an excuse anymore. Regardless, I doubt that last $20 or $50 left over will make or break ya (neither would $300).

    Not having 0.002% of your money in the fund/market is a small "risk" to pay for not being able to get in/out of the fund on a real-time basis. In my cash accounts, I usually have thousands at any given time just sitting from dividends paid or sold shares that I haven't bothered to find a place for. That money is also useful to buy back calls if I need to. Cash doesn't annoy me... in my savings, in my wallet, or in my brokerage.

    People can make endless excuses on why they want to "stick with what works" forever and buy the mutual funds their daddy bought... the bottom line is that the mutual funds are a thing of the past. They were somewhat viable until stock/ETF trade fees vanished and ETFs gradually expanded to cover whatever mutual funds do (based on popular demand). Every mutual fund- except the high load ones that were junk to begin with - now has an ETF (or five) that are its analog. An analog ETF that also - unilke the mutual fund - trades real-time, has no minimum, no goofball "customer service" to try to talk you out of selling when you want to sell, lower fees and more fees transparency, no shady CFP trying to sell it to you, etc.

    People can buy whatever they want, and I will admit that a few mutual funds are almost as good as their ETF counterpart (minus the real-time trading ability) - such as VOO vs VTSAX, but to continue to blanket advise people to buy mutual funds as if they are superior to ETFs in 2021 is tomfoolery. Mutual funds will see a continual decline in their popularity and overall market share... they will largely be reduced to "financial products" from CFPs, hedge funds pimping/shorting their own mutual funds, and they are perfect products to be offered in 401/403 (since it is much easier to hide fees and pay weird/no dividends with "proprietary" mutual funds).
    blanket advise ? lol I said “one advantage”

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  • Max Power
    replied
    Originally posted by jacoavlu View Post
    one advantage of a mutual fund in this case is that if you use VOO or SPY, you’re going to have an annoying cash balance left in your account because you can’t purchase fractional shares. This could be $300+ dollars given the share price.
    You could buy SCHX or ITOT with the tiny amount left... with no more trade fees, buying one or two shares is not an excuse anymore. Regardless, I doubt that last $20 or $50 left over will make or break ya (neither would $300).

    Not having 0.002% of your money in the fund/market is a small "risk" to pay for not being able to get in/out of the fund on a real-time basis. In my cash accounts, I usually have thousands at any given time just sitting from dividends paid or sold shares that I haven't bothered to find a place for. That money is also useful to buy back calls if I need to. Cash doesn't annoy me... in my savings, in my wallet, or in my brokerage.

    People can make endless excuses on why they want to "stick with what works" forever and buy the mutual funds their daddy bought... the bottom line is that the mutual funds are a thing of the past. They were somewhat viable until stock/ETF trade fees vanished and ETFs gradually expanded to cover whatever mutual funds do (based on popular demand). Every mutual fund- except the high load ones that were junk to begin with - now has an ETF (or five) that are its analog. An analog ETF that also - unilke the mutual fund - trades real-time, has no minimum, no goofball "customer service" to try to talk you out of selling when you want to sell, lower fees and more fees transparency, no shady CFP trying to sell it to you, etc.

    People can buy whatever they want, and I will admit that a few mutual funds are almost as good as their ETF counterpart (minus the real-time trading ability) - such as VOO vs VTSAX, but to continue to blanket advise people to buy mutual funds as if they are superior to ETFs in 2021 is tomfoolery. Mutual funds will see a continual decline in their popularity and overall market share... they will largely be reduced to "financial products" from CFPs, hedge funds pimping/shorting their own mutual funds, and they are perfect products to be offered in 401/403 (since it is much easier to hide fees and pay weird/no dividends with "proprietary" mutual funds).

    Leave a comment:


  • jacoavlu
    replied
    one advantage of a mutual fund in this case is that if you use VOO or SPY, you’re going to have an annoying cash balance left in your account because you can’t purchase fractional shares. This could be $300+ dollars given the share price.

    Leave a comment:


  • Max Power
    replied
    Originally posted by DynamicHipScrew View Post
    Differences are minimal. I have VOO in one account and SPY in another.
    Difference is substantial if you sell calls... SPY is unquestioned king due to its liquidity (and QQQ for nasdaq selling options).

    If you are doing buy-and-hold and simply want lowest ER, then VOO is probably best... IVV or others are fine too. I would tend to take IVV for higher dividend. SCHX is large cap so not technically 500 but is 0.03 and tracks it real well too (since 500 of the ~700 large cap are the same), and Fidelity Zero Large Cap probably works too. Even VTI and ITOT and Fidelity Zero Total and other total market ones will be pretty close to S&P since the 500 is 80% of the total US market value.

    Personally, I see no reason why everyone shouldn't do SPY if they want a S&P 500 fund, though. Its ER is 0.09, but it has been tracking the index the longest (accurately), its divi is higher than VOO, and liquidity is a lot better than IVV or other indexes with ER <0.1. It even makes more sense to use it over the Fidelity Zero funds (since they are brand new, lower dividend, no liquidity for options). People will do what they want, but sometimes, you're stepping over dollar to save a dime. To me, I sell 2-6week calls constantly (OTM if I'm bullish or ATM if bearish), and it is a no-brainer to use SPY for that.

    As for trade fees and "free trades on select funds," all stock/ETF and options trades should be free everywhere (except the nominal SEC commission or whatever). It has been that way for at least a year now at all major brokerages. If you are still paying $5 or $7 or $10 per trade, you need to switch brokerages... yesterday!

    ...Mutual funds were fun to discuss... until about 10 years ago when they became completely antiquated. The only potentially useful ones are Fidelity Zero funds... until they, and other companies, make ETFs with zero ER for their customers in a year or two
    Last edited by Max Power; 01-02-2021, 05:29 PM.

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  • EntrepreneurMD
    replied
    Originally posted by Tim View Post

    I would hope one chooses with a little more understanding. YTD regardless is a poor basis. Personal preference. Know what you own.
    Good point. I personally choose what to buy based on long term (5 or 10 year) returns. The higher the better. That's how I chose my favorite fund, generally holding strong companies over the long term.

    I choose when to buy based on the shorter term data (1month to 3 year). The lower the better when the overall market corrects. That's how my favorite fund grew to my largest holding, with optimal timing of repeat share acquisition.

    In essence, I prefer something that corrects significantly for opportunity, but rebounds well and maintains over the long term in quality companies for consistency. Amazingly simple, has worked quite well. hence retirement account returns several fold 20% this year, with all the mistakes made.

    Leave a comment:


  • racelari
    replied
    hey guys I think for the difference between S and P and total stock you can thank Tesla.

    On another note I'm not an academic but I think this was a good example of the small cap premium at work where while Tesla was still in the small cap index its rise in price really was a benefit to any fund tracking the small cap index, but now that it is no longer small it will be sold at a high price, capturing a lot of profit off it's rise in capitalization.

    Leave a comment:


  • childay
    replied
    Originally posted by jhwkr542 View Post
    They're all the same. I keep total stock market index funds in my retirement accounts and s&p 500 fund in taxable for purposes of TLH and avoiding a wash sale rule. The s&p500 and total market funds have such high correlation that I don't consider them identical when looking at my portfolio.
    That's what I do as well, but in reverse.

    Leave a comment:


  • Tim
    replied
    Originally posted by Peds View Post

    google.

    total US 20.4% YTD
    s&p500 17.6% YTD

    thats 16% difference.
    I would hope one chooses with a little more understanding. YTD regardless is a poor basis. Personal preference. Know what you own.

    Leave a comment:


  • EntrepreneurMD
    replied
    Originally posted by Peds View Post

    google.

    total US 20.4% YTD
    s&p500 17.6% YTD

    thats 16% difference.
    Everywhere I check I see 15.6% SPX YTD. I also saw this number on CNBC. Interestingly though you are correct, I see VFIAX at 17.6% so not sure where that difference cones from. I mistakenly assumed VFIAX just mirrored SPX.

    S&P 500 PR (SPX) Quote | Morningstar

    S&P 500 Index - CNNMoney.com

    Vanguard 500 Index Admiral (VFIAX) Performance | Morningstar

    Although most would still be happy with 16% more.

    Thanks!

    Leave a comment:


  • Peds
    replied
    Originally posted by EntrepreneurMD View Post
    Anyway, I think total market outperformed SP index this year by about 33% (20% vs. 15%, VTSAX vs VFIAX).
    google.

    total US 20.4% YTD
    s&p500 17.6% YTD

    thats 16% difference.

    Leave a comment:


  • EntrepreneurMD
    replied
    Nasdaq/100 was the index to be in the past few years, perhaps SP or total markets will start catch-up. I shifted there 2014.

    Anyway, I think total market outperformed SP index this year by about 33% (20% vs. 15%, VTSAX vs VFIAX).

    Leave a comment:


  • jhwkr542
    replied
    They're all the same. I keep total stock market index funds in my retirement accounts and s&p 500 fund in taxable for purposes of TLH and avoiding a wash sale rule. The s&p500 and total market funds have such high correlation that I consider them identical when looking at my portfolio.
    Last edited by jhwkr542; 12-31-2020, 12:57 PM.

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  • Hatton
    replied
    These fees are so low they make no difference

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  • Cubicle
    replied
    I'd definitely avoid the transaction fee. Wouldn't that hit with each contribution?

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  • VagabondMD
    replied
    In 2020, you should not be paying a transaction fee for an S&P 500 fund. You did not indicate where your assets are held, but you can likely buy it for no fee there.

    For perspective, when I first bought the Vanguard S&P 500 fund, the expense ratio was 0.4%, and it was the cheapest mutual fund available. Today, they are practically free. Do not overthink it.

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