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VGSTX vs. VWELX vs. VTSMX

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wyclef
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VGSTX vs. VWELX vs. VTSMX  Reply with quote  

Hello,

I've got 10k in Vanguard Star Fund. Thinking about adding another 10k and was pondering switching from Star Fund to Wellington and then putting the other 10k in the Vanguard Total Stock Index. I'm in mid thirties. Wondering if I should just put everything in VTSMX. I'm sort of partial to using Vanguard as I've been happy with them and like their funds.

Thoughts?
Post Mon Jan 12, 2015 5:14 pm
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littleroc02us
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I love the VTSMX, it's my go to fund for just about everything I invest in as far as Roth IRA's. I also have the Wellington Fund, but haven't been adding much to it, because the performance hasn't matched the Total Stock market index fund. The VTSMX gives you a great exposure to the market of over 3000 holdings in America's largest companies. I have their admiral VTSMX and it's expense ratio is .05% which is like nothing. Here are the returns thus to date. 1 year, 3 year, 5 year, 10 year and since inception.

12.43% 20.34% 15.56% 7.99% 9.62%

As you can see the fund has been doing quite well. Where as the Wellington fund hasn't performed quite as well.

9.82% 13.94% 11.25% 7.97% 8.32%

I simply invest and hold long term.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Mon Jan 12, 2015 5:31 pm
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wyclef
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So you think it would be a smart move and an improvement to bail on Star and switch to Wellington and then start up the Vanguard Total Stock Index? Currently Star is in Roth IRA... how does Vanguard handle switches like this? Can I have 2 funds under one IRA?
Post Mon Jan 12, 2015 5:58 pm
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wyclef
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What would the pros/cons be to having the VTSMX in the Roth IRA vs Taxable Account?
Post Mon Jan 12, 2015 6:33 pm
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littleroc02us
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IMO, I'd rather pay taxes now while you know what tax rate you have. You never know what congress will come up with when you retire. What if income tax brackets jump to 50% for the middle class?

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Tue Jan 13, 2015 9:50 pm
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wyclef
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Right. But there is a max i can contribute to the Roth IRA every year so... I can max that out I suppose and then have extra in taxable account
Post Wed Jan 14, 2015 12:42 am
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littleroc02us
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yes, exactly. Max out the Roth first and then other investment vehicles second.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Wed Jan 14, 2015 3:17 pm
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wyclef
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Ok, I think I'm going to exch the current STAR shares I have for VWELX and then max out 2014 contributions. Is using the default cost-basis method where it averages the shares when you exchange what most people normally do? Are there any fees associated with exchanging? Also, when I do this will it keep everything in Roth IRA? or will it be considered taking money out of Roth IRA to do this.
Post Fri Jan 23, 2015 7:15 pm
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oldguy
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If the money is Roth, the cost - basis may not be an issue.
Post Fri Jan 23, 2015 7:44 pm
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wyclef
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i see. is that only an issue if you are selling? do you know if i would be charged any fees to exchange star fund for wellington in roth? it's unclear to me. Also, would I be taxed in anyway now for exchanging?
Post Fri Jan 23, 2015 8:07 pm
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blixet
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There is no tax on an exchange within the Roth. And you can have as many funds as you want within an IRA account.

Information is more valuable sold than used – Fischer Black
Post Fri Jan 23, 2015 9:54 pm
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wyclef
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So I got VWELX in Roth IRA and maxed out. Now I want to get VTSAX but am unclear how it works. I only have a Roth IRA through Vanguard.... do I need to open a new brokerage account? When I go to open account I get 2 options... Open New Account or Open Brokerage Account... the process is a bit confusing. Anyone familiar with this?
Post Mon Feb 23, 2015 6:18 pm
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GardenCat
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You are confusing yourself. You already have an "account", your Roth IRA account. You just want to add a different Mutual Fund to that account. You do not need to open another "account". You can have many mutual funds within one IRA account.

You have a Vanguard account. You need to set up your online account access, which will involve choosing a log-in name and a password. Then when you go on-line to Vanguard you will log into your existing account. If this seems confusing to you, call the good people at Vanguard. They can help guide you in getting set up and through the steps of moving money around. If you can, be in front of your computer when you call them as it will make the process easier as they will walk you step by step.

Once you have a Roth account, you can add to it using the same mutual fund or adding different funds within that account. Within Vanguard there are no fees to transfer money from one fund to a different fund within the same account.

You do not need a brokerage account to add different mutual funds to your Roth IRA.

With an IRA or a Roth IRA you cannot truly "max out the account", you can only max out your annual contribution, which at this time is $5,500/year. In any given year, you can only contribute this total amount whether into one IRA or more than one IRA - OR whether into one mutual fund or more than one mutual fund.

Good Luck[/u]
Post Tue Feb 24, 2015 9:31 pm
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moneymaker56
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Post Thu May 21, 2015 11:10 pm
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