How To in a Taxable account

[PHANTASOS]

I would recommend avoiding the first and last 30 minutes of the trading day and ALWAYS using a marketable limit order.  Using a marketable limit order isn't to help you save a fraction of a penny on what price you get.  It is to protect you from paying a really bad price if you place a market order during a 1 second period of the day when the only people who want to sell are asking 2% higher - which nobody would pay unless they had naively placed a market order.  I think it is good form even for very high volume ETFs (like VTI, VXUS, etc.).  Your marketable limit order should execute immediately - there should never be a delay.

'Best practices’ for ETF trading: Seven rules of the road

[nachos31]

ReFinDoc wrote:

You said “VG Int’l Small (VSS) since it doesn’t exist as MF.” It does not exist as an Admiral fund.

Click to expand...

Yep, I clarified. See above. I use VSS because it is cheaper than its corresponding Investor class MF. I don't trade often. If there was an Admiral share class then I would most certainly use it as I do with my other holdings.

[ReFinDoc]

ETF's allow you to do exactly what you shouldn't do...trade more often. I see no advantage to ETF's.

You said "VG Int’l Small (VSS) since it doesn’t exist as MF." It does not exist as an Admiral fund.

[nachos31]

ReFinDoc wrote:

How about: Vanguard FTSE All-World ex-US Small-Cap Index Fund Investor Shares (VFSVX)

Click to expand...

Sorry, no Admiral share class of VFSVX (Investor share class with ER 0.27) whereas VSS has ER 0.13.

[ReFinDoc]

How about: Vanguard FTSE All-World ex-US Small-Cap Index Fund Investor Shares (VFSVX)

[nachos31]

Re: ETFs v MFs in taxable: aren't ETFs better able to flush out capital gains compared to MFs?

I'm guessing maybe not a big concern for PoF and WCI since they likely hold VG and their ETFs are share classes of their corresponding MFs?

The lack of fractional shares with ETFs do frustrate me. The only ETF I own is VG Int'l Small (VSS) since it doesn't exist as MF.

[G]

FIREshrink wrote:

Ever since the flash crash, I’ve used limit orders when I buy and sell ETFs. There’s no reason to take the chance, rare as it might be, that your ETF crashes just when you want to sell or surges just when you want to buy. Limit orders prevent that chance.

If you can’t be bothered to learn how to write a limit order, stick with mutual funds.

Click to expand...

I happened to be watching CNBC (don't worry, it was for entertainment, not advice!) when the Flash Crash occurred--it was so shocking, if only I wasn't suffering from apoplexy....

FWIW, I often have absurdly low buy and ridiculously high sell orders in play, just in case the stars align and it works out for me.  However, after reading "Flash Boys" I'm pretty confident that much more sophisticated (professional) folks will reap that harvest long before my piddling lots.

[FIREshrink]

Ever since the flash crash, I've used limit orders when I buy and sell ETFs. There's no reason to take the chance, rare as it might be, that your ETF crashes just when you want to sell or surges just when you want to buy. Limit orders prevent that chance.

If you can't be bothered to learn how to write a limit order, stick with mutual funds.

[Lithium]

There are a few reasons I prefer ETFs over mutual funds, but the main one is portability.  I make a few thousand dollars a year moving my taxable account and Roth IRA around for brokerage bonuses.

I don't think limit orders are worth the trouble if it saves you less than $1.

[Craigy]

I used to do market orders.  I now do limit orders.  I might change back one day, but with a limit order, you know your price.  With a market order, invariably the price ends up being some inexplicable fractionally higher amount than the market price.  If you're buying a few shares of something that trades in high volumes, this is probably no big deal, but if you're buying a lot of something that doesn't really move much, the difference could be hundreds or thousands of dollars.

Also, if you're buying with a finite amount of money, a few cents or a dollar more per share might mean you can only buy 123 shares instead of the 124 you budgeted for, and your trade may never occur on that basis as well.

[The White Coat Investor]

I generally do limit orders, but certainly don't have a good reason to in the ETFs I buy which are mostly just VTI (Vanguard total Stock) and VSS (Vanguard small international.) I do ETFs in my taxable and partnership 401(k), but funds everywhere else. It's just a cost thing in the 401(k). I don't really have a great reason to be using the ETFs in the taxable account.

[PhysicianOnFIRE]

StarTrekDoc wrote:

PoF – yes, if it’s set and forget — but if worthy for Tax Harvesting opportunities — ETFs better — especially now when we all are just waiting for that correction.

Click to expand...

I managed to TLH $46,000 in paper losses in 2016 with mutual funds, a year in which the market gained about 10%.

I can see where with ETFs, you might be able to catch a mid-day trough, whereas with mutual funds, you're guaranteed the end of the trading day price. Are there other advantages to ETFs in terms of TLH?

 

[StarTrekDoc]

I usually Market order if middle of the day and make sure no volitility ongoing that day for ETFs.   Never after hours or at beginning/end of day/week where volatility is highest.

PoF - yes, if it's set and forget --  but if worthy for Tax Harvesting opportunities -- ETFs better -- especially now when we all are just waiting for that correction.

 

[PhysicianOnFIRE]

I keep it simple and buy mutual funds.

[beagler]

Quote about Aug 24, 2015 flash etf crash from Barron's:

ETFs are supposed to—and generally do—trade in lockstep with the stocks they own, with very little tracking error. Yet when the S&P 500 fell as much as 5.3% in the opening minutes of trading, the $65 billion iShares Core S&P 500 ETF (ticker: IVV) fell as much as 26%, some 20 percentage points below its fair value. Disorderly trading affected big ETFs from every major provider: The $18 billion Vanguard Dividend Appreciation ETF (VIG) and the $12 billion SPDR S&P Dividend (SDY) plunged 38% apiece, while thePowerShares S&P 500 Low Volatility ETF (SPLV) fell as much as 46% before clawing back an hour after markets opened.