Good Day Bob,

Thanks for the response

Kind Regards,

BuyHoldGuy:

Good Day All,

I am creating my asset allocation for two rollovers.  Could I create a good portfolio all in ETFs, since there are no transaction fees or maintenance at the broker that I am looking at if you maintain a balance of 25K? 

The only downside is the bid/ask spreads when you trade; even if you don't pay a commission, you may get only $19.95 a share when you try to sell an ETF which last traded at $20.  If you don't trade too much, this is a fine strategy.

For the simple four-fund portfolio (Total Stock Market, Total Bond Market, Total International, and a money-market fund), you can get the first three in their ETF versions: VTI, BND, VEU.  VEU actually tracks a different index from Total International, but it serves the same purpose.  Since this is an IRA, you probably won't have your money-market fund there anyway; if you do, use the cash fund from your brokerage account.

If you want a more complex portfolio, you can also do that entirely with ETFs; almost all of the Vanguard index funds have ETFs, and there are non-Vanguard ETFs if you want an asset class that Vanguard doesn't cover.

grabiner:

"The only downside is the bid/ask spreads when you trade; even if you don't pay a commission, you may get only $19.95 a share when you try to sell an ETF which last traded at $20.  If you don't trade too much, this is a fine strategy."

I couldn't disagree more. Buying or selling ETF shares during market hours are a positive, something you can't do with mutual funds. On days when the entire market is taking a hit you can add to your position and lower your cost basis per share. Conversely when you want to take a profit or rebalance you can wait for a day when your particular ETF is doing well.

Regards

 Just to clarify another point regarding bid/ask spreads. You don't have to be within the bid-ask spread. You can bid 5 or 10 or whatever percent under the current bid price. On a limit order it will not execute until your bid price is met. You can set a limit order for the day or have it remain until you change it  or cancel.

Hope this helps
fredP