Best low-fee index fund?

[Anonymous]

We sold our house recently and have some cash sitting (around $300k). I am trying to figure out what to do with it. The mortgage on our new house is 3.5% so I don't really want to throw it all at that, since I can (hopefully) get more than a 3.5% return somewhere. My kids are 4 and 1 and each have 529s that we make automatic contributions to - one is at about $30k and one is $10k. We max our TSPs (both feds) but we don't have any other savings.

I know I should buy ibonds, but that's only $20k. I will also put $25k in each of the 529s. My kids are little so I'm not sure it makes sense to do more than that, especially since I get a DC tax deduction of up to $4000 for yearly contributions (so I think it makes sense to continue those?).

I would like to park the rest of it in a low-fee index fund somewhere. Any recommendations? Vanguard? iShares? What funds?

[Anonymous]

Do you want all stocks, stocks & bonds, U.S., international, value v growth, etc.?

I have some VTSAX, VTV, and VIGI, among others. There are lots of low cost index funds out there so it depends on what makes up your current portfolio, your age, risk tolerance, blah blah blah.

[Anonymous]

The answer is to ask a different question: what is the best fund for me, given my personal objectives, time line, risk tolerance, tax sensitivities, etc.

Start here: https://investor.vanguard.com/investor-resources-education/understanding-investment-types

[Anonymous]

Open up an account with Fidelity and invest in one of their no fee mutual funds like a US broad market stock index fund. FSKAX is good. If you want to diversify you can put some into an international stock index fund too (like 10-20%) FTIHX. If this money is for retirement, then look at your TSP portfolio and view your asset allocation as a combo of all your money. Decide how much you want in fixed income, US, international, or anything else. Keep fixed income, like the terrific G Fund in the TSP, and keep the more tax efficient funds in your taxable account. Do you have a Roth IRA? If not, max those out too for each of you even if you have to do back door.

[Anonymous]

Anonymous wrote:Do you want all stocks, stocks & bonds, U.S., international, value v growth, etc.?

I have some VTSAX, VTV, and VIGI, among others. There are lots of low cost index funds out there so it depends on what makes up your current portfolio, your age, risk tolerance, blah blah blah.

I'm 36, only current investments are about $300k in my TSP (in a target fund) and $40k in 529s (also a target fund).

I'm not trying to play the stock market, just want something low-maintenance that will grow over time.

[Anonymous]

Anonymous wrote:Open up an account with Fidelity and invest in one of their no fee mutual funds like a US broad market stock index fund. FSKAX is good. If you want to diversify you can put some into an international stock index fund too (like 10-20%) FTIHX. If this money is for retirement, then look at your TSP portfolio and view your asset allocation as a combo of all your money. Decide how much you want in fixed income, US, international, or anything else. Keep fixed income, like the terrific G Fund in the TSP, and keep the more tax efficient funds in your taxable account. Do you have a Roth IRA? If not, max those out too for each of you even if you have to do back door.

I thought I made too much to qualify for a Roth IRA ($250k). Is that not right? What is "back door"?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Open up an account with Fidelity and invest in one of their no fee mutual funds like a US broad market stock index fund. FSKAX is good. If you want to diversify you can put some into an international stock index fund too (like 10-20%) FTIHX. If this money is for retirement, then look at your TSP portfolio and view your asset allocation as a combo of all your money. Decide how much you want in fixed income, US, international, or anything else. Keep fixed income, like the terrific G Fund in the TSP, and keep the more tax efficient funds in your taxable account. Do you have a Roth IRA? If not, max those out too for each of you even if you have to do back door.

I thought I made too much to qualify for a Roth IRA ($250k). Is that not right? What is "back door"?

As long as you don’t already have a traditional Ira, you can open one up, put in $6000, then the next day convert it to Roth. You won’t have to pay much in taxes if any because you probably wont gain much in 1 day. Keep the t IRA open with a zero balance so you can do it again next year.

[Anonymous]

whatever you do, don't put it in a vanguard index fund that is a taxable target date fund. I learned that the hard way after getting hit with high taxes this year!

[Anonymous]

SPY and VOO are frequently mentioned on this board. I’ve been happy with SpY. I think a post a while back said voo had a lower rate.