Investing megathread extravaganza

[DaFace]

A place to talk about investing stuff.

[Dunit35]

I don’t have a lot of money in my Charles Schwab account but noticed I’m down 3% for the year on SWISX international index. Should I stop putting money into it? I’m up 13% on SWTSX total stock market. I don’t know a thing about this stuff and have a much better police retirement I pour money into.

[ThaVirus]

The market was way too good this year to yield a negative return. You should definitely look into it.

[scho63]

Originally Posted by Dunit35

I don’t have a lot of money in my Charles Schwab account but noticed I’m down 3% for the year on SWISX international index. Should I stop putting money into it? I’m up 13% on SWTSX total stock market. I don’t know a thing about this stuff and have a much better police retirement I pour money into.

You've done something horribly wrong

[DaFace]

Originally Posted by Dunit35

I don’t have a lot of money in my Charles Schwab account but noticed I’m down 3% for the year on SWISX international index. Should I stop putting money into it? I’m up 13% on SWTSX total stock market. I don’t know a thing about this stuff and have a much better police retirement I pour money into.

Did you only start investing midway through the year? SWISX is up 4% YTD, and SWTSX is up 27%, so your returns don't seem right. I'm guessing whatever number you're looking at includes at least some investments that were made when the market was on a high and you just got unlucky with timing.

As for the broader question of allocations, short-term, past performance doesn't really suggest anything about future performance. In 2022, SWTSX lost 20% vs. 14% for SWISX, so there are some years where international stocks are a better bet. I personally go heavy on U.S. stocks (generally around 80/20 for US/international for my stock allocation), but your choice there comes down to risk tolerance. Regardless, the common recommendation is to figure out an allocation and stick with it rather than reacting to short-term performance.

[Buehler445]

Originally Posted by Dunit35

I don’t have a lot of money in my Charles Schwab account but noticed I’m down 3% for the year on SWISX international index. Should I stop putting money into it? I’m up 13% on SWTSX total stock market. I don’t know a thing about this stuff and have a much better police retirement I pour money into.

I dunno what your allocation is, but if SWISX is the only equity in the account, I'd pick a different one.

Everybody with a CFA designation suggests diversification into international funds, but every time I look into historic returns, I don't see it. I'd need a pretty compelling reason to look outside the US. There are a lot of profoundly boring stuff I'd love to discuss, but don't want to derail the discussion.

Again, if that's you're only equity in the account I'd look at a total market fund like DaFace posted.

If you're leaning on your pension to fund your retirement, I'd probably reach out and put in a growth fund like SCHG.

I'm partial to the S&P Index funds for a workhorse in a portfolio. Schwabs is SWPPX. I use VOO because the fees are a teensy bit cheaper, but the cost per share is pretty high and Schwab doesn't do fractional shares, so in your case I'd use SWPPX.

[ThaVirus]

As of the other day when I looked VOO was up almost exactly 30% YTD. IIRC, it historically returns around 10% per year over the last several decades. Buy and hold. You don’t even need to research anything.

You won’t get rich quick but that’s the way to go, IMO, if you’re a beginner like myself.

[Dunit35]

I don’t have much in either as I just started this year. The SWISX is -$18. I do see the 4% gain but mines definitely not that. Like I said, I do have a police pension which is pretty solid. This Roth would only net me $150k or so if I do it right upon retirement age.

Do I just sell the SWISX shares and put them into a different one? I do an 80% SWTSX/20% SWISX. I only put $100 in it per paycheck. Maybe that’s my problem.

[Buehler445]

Originally Posted by Dunit35

I don’t have much in either as I just started this year. The SWISX is -$18. I do see the 4% gain but mines definitely not that. Like I said, I do have a police pension which is pretty solid. This Roth would only net me $150k or so if I do it right upon retirement age.

Do I just sell the SWISX shares and put them into a different one? I do an 80% SWTSX/20% SWISX. I only put $100 in it per paycheck. Maybe that’s my problem.

Yeah, if you missed the first part of the year, it really ****s with your return.

Are you set on international stocks? I currently have nothing international, which probably isn't the answer either, so I don't really have much advice if you're looking for international investments.

I will say I saw some research recently that the marginal utility of diversification becomes negligible at like 30 stocks or some horrifically small number. Meaning, that you don't gain any additional expected return from a small number of stocks to like a total market fund. I disagree pretty hard with this notion, because I could certainly see myself picking the absolute wrong 30 stocks. But the point was the S&P 500 is plenty diversified enough. I'm not totally sure I agree with that, but I fully recognize that things like the total market funds diversify risk out entirely but also absorb every shitbox company that is going to 0.

If I'm in your shoes, I view my pension as all but guaranteed, so I'm taking some risk with it. I'd be inclined to put it in 100% SCHG or 50/50 SCHG/SWPPX. That will give you more upside potential and help fight inflation, which is what murders pension retirees. But, if you can't stomach some down years, probably best to stick to something like SWPPX.

I wouldn't think with a pension, you'd need the massive diversification that international or total market funds provide. Especially if you don't have any US exposure.

[DaFace]

Originally Posted by Dunit35

I don’t have much in either as I just started this year. The SWISX is -$18. I do see the 4% gain but mines definitely not that. Like I said, I do have a police pension which is pretty solid. This Roth would only net me $150k or so if I do it right upon retirement age.

Do I just sell the SWISX shares and put them into a different one? I do an 80% SWTSX/20% SWISX. I only put $100 in it per paycheck. Maybe that’s my problem.

Nothing wrong with $100 per paycheck (though more is always better in the long run). IMO, you're thinking of it wrong by focusing on this year's returns, though. Again, this year's performance means very little in predicting what will happen in the future.

80/20 US/Int'l is a pretty standard recommendation, so there's nothing wrong with just doing it as you are now. If you don't want international exposure, you can just go 100% US, but you lose a little diversification that way. As Buehler said, recent years have been good to the US compared to international, but there's nothing that says that couldn't change.

[Dunit35]

Thanks to all of you. Do I lose any of the funds I’ve put into the international funds? That is if I switch that to 100% US. There’s only $500ish in it.

I believe I’m up $300ish in the SWTSX. 13% or so.

[Buehler445]

Originally Posted by Dunit35

Thanks to all of you. Do I lose any of the funds I’ve put into the international funds? That is if I switch that to 100% US. There’s only $500ish in it.

I believe I’m up $300ish in the SWTSX. 13% or so.

No. You'll just go to the trade ticket select sell and market order. After that executes there will be cash in your account. You then use that cash to buy the ones you want. Then keep putting the $100 a month in and buy the equities after the deposit clears.

Understand that if it is a taxable brokerage account (as opposed to an IRA or a ROTH IRA) the gain you get will be taxable. Won't be a material amount if there is only $500 in there, just don't forget to do it.

[ThaVirus]

Does anyone here have both a traditional and ROTH IRA?

[Buehler445]

Originally Posted by ThaVirus

Does anyone here have both a traditional and ROTH IRA?

Yeah.

And I have both ROTH and traditional qualified plans.

I did some pretty intensive math and might switch to 100% traditional. But that isn't for everyone and I certainly wouldn't recommend it without knowing the math.

[ChiliConCarnage]

Originally Posted by ThaVirus

Does anyone here have both a traditional and ROTH IRA?

Good reminder, kicked off 2025 IRA contribution from my bank.

I do. I contribute actively to both Roth and traditional through my company 401k plan as well. I know some people try to work out exactly which is best for them but it takes a lot of assumptions about taxes and your life decades into the future so I use both a bit. Plus, knowing myself, I'll hate pulling out money once I have little to no income. Not owing taxes on some of it may help it not hurt so bad.

[DaFace]

Originally Posted by ThaVirus

Does anyone here have both a traditional and ROTH IRA?

I do ROTH primarily but my trad is a dumping ground for all of my orphaned 401ks. I find the idea of predicting future income in retirement to be pretty ambiguous, so I figure having a blend will give me a little flexibility.