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Re: Hey Taylor, read Bogleheads' Guide, need opinion Taylor Larimore  06-21-2008, 8:25 PM | Post #2531093
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Hi mtyogi:

You asked substantially the same question a few days ago and received replies from Chin and Jerry.  I will post their replies here:

 

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Hi mtyogi,
Just some thoughts. Total international is a Fund-of-Funds, and if I understand this correctly, you don’t get the foreign dividend tax credit for this fund.

FTSE All World ex-US has a higher expense ratio and lower dividend.

You might consider a combination of Developed Markets and Emerging Markets.

Don’t rebalance, just buy into value.

As far as 70/30, I see no reason to hold higher percentages of US, but lower percentages of emerging markets might be wise if you do not like volatility in your portfolio.

As a disclaimer, I am not a big fan of total markets.

Chin

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While I don't think you can go wrong with either FTSE All-World ex-US or Total International in a taxable account, I would go with (and do) the FTSE due to the foreign tax credit. All expectations are that with time the expense ratio will be lowered. I think you are correct to be aware of the tax impact of managed funds in a taxable account.

I use FTSE All-World ex-US and TSM (VTSMX) in a taxable account as two core investments and reserve tax advantaged accounts for slice, dice, tilt, etc...

Jerry

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You have received good replies. 

 I prefer the FTSE fund for taxable accounts for the reasons given by others. 

Regarding the percentag of each, it depends entirely on the rest of your portfolio which is unknown to us.   It appears you may not have an OVERALL asset allocation plan.  If not, and you need help, use this link:

https://personal.vanguard.com/us/planningeducation/general/PEdGPCreateHwToCreatePlnContent.jsp

I think 30% International and 70% domestic stocks is a reasonable equity allocation.  The third leg of diversification is bonds for safety and income.  Until you post your existing portfolio percentages and your desired portfolio percentages, it is impossible to answer your question about the percentage  of two funds.

You mentioned that you have mangaged funds in your taxable account.  This can be a serious mistake.  If the manager leaves or the fund underperforms, and you want to exchange to another fund, in a taxable account you will pay a capital gain tax on all the fund profits--leaving that much less to reinvest. 

In taxable accounts, try to own only tax-efficient funds that you can hold 'forever.' These are usually index funds or tax-managed funds.

Best wishes.
Taylor

 

 
Topics capital gain tax class developed markets domestic stock emerging markets View Complete Thread
 
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