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TDA AMERITRADE FREE ETF's-NEED HELP WITH ASSET ALLOCATION IN MY solo401K

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  • TDA AMERITRADE FREE ETF's-NEED HELP WITH ASSET ALLOCATION IN MY solo401K

    Early 40s, have multiple part time jobs, some W-2, some 1099. Plan was : 50% domestic blend, 30% foreign and 20% bonds

    Retirement accounts:

    ***gov 457-NO match, Have been putting in 18K yearly as of recently -low 100s

    allocation: 75% Vang Inst Index Fund(0.04), 15% Vanguard Mid Cap (0.08), 10% Small cap(0.08), foreign options and bonds suck and are over 1% cost.

    ****Backdoor Roth -Vanguard-thanks WCI!, started 2015, 5.5K went into Total Stock Market

    *****TDA Ameritrade solo 401K, started in 2015, put in around 30K last year, plan to do more this year but am really struggling with asset allocation.I wanted to do the free ETFs (due to dollar cost averaging) and invest in foreign and bond but not sure that the funds they have are any good in the free list.

    Right now: buying VEU(Vanguard FTSE All-World ex-US Index Fund ETF Shares) and VSS (Vanguard FTSE All-World ex-US Small-Cap Index Fund ETF Shares)(ratio 75 to 15) and then also BND (Vanguard Total Bond Market Index Fund ETF Shares)

    Questions:

    1. If you have a TDA account-how are you allocating the commission free ETFs-ideas for a good portfolio.

    2. What re your thoughts of VEU/VSS for sole foreign investments?

    3. Read the latest article that ETFs for Bonds are not good--thoughts about BND for Bonds?

    4. If I sell and buy ETFs frequently (but not within the 30 day period) will I be loosing money due to the bid/ask spread?

    ---------------

    I do kinda regret not doing Vanguard for my solo401K--but was fixated on not being able to get Admiral Shares--but maybe I am loosing more with TDA?

  • #2




    Early 40s, have multiple part time jobs, some W-2, some 1099. Plan was : 50% domestic blend, 30% foreign and 20% bonds

    Retirement accounts:

    ***gov 457-NO match, Have been putting in 18K yearly as of recently -low 100s

    allocation: 75% Vang Inst Index Fund(0.04), 15% Vanguard Mid Cap (0.08), 10% Small cap(0.08), foreign options and bonds suck and are over 1% cost.

    ****Backdoor Roth -Vanguard-thanks WCI!, started 2015, 5.5K went into Total Stock Market

    *****TDA Ameritrade solo 401K, started in 2015, put in around 30K last year, plan to do more this year but am really struggling with asset allocation.I wanted to do the free ETFs (due to dollar cost averaging) and invest in foreign and bond but not sure that the funds they have are any good in the free list.

    Right now: buying VEU(Vanguard FTSE All-World ex-US Index Fund ETF Shares) and VSS (Vanguard FTSE All-World ex-US Small-Cap Index Fund ETF Shares)(ratio 75 to 15) and then also BND (Vanguard Total Bond Market Index Fund ETF Shares)

    Questions:

    1. If you have a TDA account-how are you allocating the commission free ETFs-ideas for a good portfolio.

    2. What re your thoughts of VEU/VSS for sole foreign investments?

    3. Read the latest article that ETFs for Bonds are not good–thoughts about BND for Bonds?

    4. If I sell and buy ETFs frequently (but not within the 30 day period) will I be loosing money due to the bid/ask spread?

    —————

    I do kinda regret not doing Vanguard for my solo401K–but was fixated on not being able to get Admiral Shares–but maybe I am loosing more with TDA?
    Click to expand...


    Not losing that much.  You can buy low cost Vanguard ETFs through TD Ameritrade.  It simply requires more work managing that portfolio and rebalancing it, not to mention doing lots of research.  I use 13 ETFs (including 3 bond ones) and some are not Vanguard (for asset classes that Vanguard does not have as ETFs).  Bond ETFs are just fine, and yes there are spreads on those ETFs depending on the volume, but I bet that the timing of the purchase has more effect on the actual cost to you, so if you just buy your ETFs several times a year you will be just fine, especially when there is no commission to buy.

    The only way to get Admiral shares at Vanguard is via VRIP account that would require a third party administrator, so this is really only worth it for those who contribute a lot and who might have many accounts that they want to roll into that VRIP.
    Kon Litovsky, Principal, Litovsky Asset Management | [email protected] | 401k and Cash Balance plans for solo and group practices, fixed/flat fee, no AUM fees

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