I’m lucky to have started investing fairly soon after finishing college. They say, “time in market beats timing the market.” So I’m lucky that I have time in the market. But I made the mistake of picking a bunch of stocks instead of investing in the overall market itself. I feel like I’m stuck because while I’ve chosen a lot of stocks that have gone up a lot, I feel like I’d pay a lot of capital gains taxes to redistribute into index funds. Of course if I lost confidence in a pick, I would sell it and take the hit, but I’d rather not have to worry about it. I’m watching this JL Collins talks and I thought I’d write this blog entry as something to pass on to my kids. Who knows if they’ll ever read it though.
If I was going to pick investments today, I’d probably pick stick with a Bogleheads Three Fund Portfolio. The universal one liner would be something like VTI, VXUS, and BND. The good thing about stock indices is that the bad companies fall off and the good companies can go to the moon. One of the things I missed when I started investing in ETFs 20 years ago is tax-efficient placement. From the link: “In general, the international fund should go into a taxable account, the bond fund should go into a tax-advantaged account, and the domestic equity fund should fill in the remaining space.” I had bonds in my regular brokerage account for too long and have been paying unnecessary taxes on their distributions.
I want to keep this post short on purpose and straight to the point. I feel like AI agents have gotten good enough to give financial advice if you ask for pros and cons of something (e.g. pros and cons of investing in VTSAX vs VTI).