A good argument for adding international stocks, despite how the US has outperformed international for so long, is the concept of reversion to the mean. Worst case scenario, it never outperforms but it's only a small portion of your portfolio anyway. Best case scenario, it's a good partial hedge. You never buy insurance because you're never going to need it.
@enonknives5449 that's why international should only be a small percentage of your portfolio. American stocks have been very dominant for a while, but it's unlikely that this will always stay true.
@@thomaslunden -- US stocks have outperformed in the long run and are likely to outperform in the long run. International stocks have infrequently outperformed and are likely to outperform only infrequently. That's how reversion to the mean works. I agree that international stocks should only be a small percentage of your portfolio...preferably zero. However, I might consider an international high dividend ETF like VYMI yielding 4.38%, since I'd be chasing the yield and not the growth.
I prefer to put SCHD in a taxable account, because the dividends are likely to be low for a long time compared to your ordinary income. The qualified dividends will also be taxed at the lower long-term capital gains rate...which for many people will be 0%. The taxable account also gives you access to money that can be withdrawn without penalty. In the long run, you will want to use the SCHD dividends for funding retirement, and you can do that without selling something else and paying a lot of capital gains taxes to rebalance your allocation. I would use tax-deferred IRAs/401Ks for growth stocks/ETFs, and for any income producing assets (bonds, REITS) since those would be taxed at the ordinary income rate anyway. My Roth IRA is all in Vanguard Growth. Good call.
@@michaelak1416 -- Growth in taxable also makes sense because there wouldn't be taxes on growth until you sell. You're in control. Dividends and income in Roth also make sense. Literally everything is better in a Roth. It is the tax-deferred IRA/401K that causes people trouble. If I had to do it over again, I would have maxed out Roth, only put enough in 401K to get the match, and put everything else in taxable. Unfortunately, I'm thirty years too late.
Great video but I was a little confused about SCHD and REITs with dividends.. you were saying they are better in a traditional IRA or 401k where the dividend would not be taxed?? I'm under the impression you would be taxed in those, and not taxed in the Roth..
The truth is, we just don't know. The next decade going forward can be completely different. Just like 2010-2020 was the complete opposite of 2000-2009 (the lost decade). If you look at past performance at that time, then you would have been mostly in emerging markets in 2010 hoping to chase that recent outperformance. Instead, it completely flipped and US mega caps did best between 2010-2020, but did the worst between 2000-2009. We simply dont' know if the next 5, 10, 15 years will favor funds like SCHD, or VUG, or small caps, or international. The best thing we can do is be diversified (VTI + VXUS) because we just don't know which sector, market or country will outperform.
I do Total market and international also. But I have a REIT fund thrown in there as well. Even though I know REIT funds are crap….I am hopeful it makes a comeback in the future.
I just started a Roth. I'm starting by keeping it simple with VOO/SCHD. Wonder if keeping SCHD in there and using my taxable as a spillover is a good move? Or maybe that's complicating things and just have it in taxable?
My core in my traditional is VTSAX mutual fund or (VTI). My roth core fund is VOO. I won't disclose the other funds because they are very controversial and unconventional.
Just VR and chill. My HSA is 60% VT, 20% BNDW, 10% GLDM, 10% REET. (half of my portfolio is FDRXX while interest rates are high. This year I'll start changing that percentage more towards this portfolio).
I love VOO and have some VTI, too. In my Roth IRA as well as taxable brokerage account. The volatility lately has made me sit on the side to buy more. Just holding that extra cash in a money market getting 5.4% 7 day yield lately.
Great video. Thanks, Jarrad! I'm a bit lost on your thoughts on dividend stocks in a roth. I thought you would want to shield high taxes from dividends and reit payouts in a roth. I would be happier with 1 million dollars in SCHD and O in a roth than 1 million dollars in VUG and SCHG. HELP! :)
REITs should be in a Roth because they don't pay out qualified dividends taxed at the capital gains rate. Other securities paying qualified dividends can be held in taxable accounts. Option trading should be done only in retirement accounts as gains are taxed at short term rate otherwise.
@@JarradMorrow, if it's the same feature that made me feel dizzy, it was the wobbling of the supporting data such as the "Exposure" spreadsheets and "Stock Style" graphs.
I haven't noticed any issues with the graphics in Jarrad's videos but flashing, spinning and wobbling graphics do make me feel like my vertigo is starting. Thanks, Jim
I am very new to the Roth IRA (made my first deposit on 9/13/24). Is it recommended to invest in all 4 of these or pick one or two of these? I watched a previous video on having a 2 fund portfolio that mentioned VOO and VTI. Thanks for the help.
Question, I am at the peek of my earning and so I am in a high tax bracket. Would that mean having my dividend stocks in my Rath IRA is better because it isn't added to my income? Having VOO in my taxable account let's me delay realizing that growth?
Unfortunately that past performance doesn't tell us how things will play out in the future. It's definitely possible that VOO could continue to outperform but none of us know. Which is why global diversification will set you up to capitalize on whatever happens.
And a broken clock is right twice a day, but it is still broken. $10k invested in VOO since 2014 is now worth almost $38k, while VXUS is worth less than half of that.
Again, you're referring to the past and not the unknown future. I'm not suggesting I know what's going to happen either, though, which is why I promote global investing. But if going 100% U.S. stocks works for your personal investing style and behavior, then stick with it because that's all that matters 👍🏻
You are mistaken. It’s not wrong to place a dividend ETF if a Roth account , it just doesn’t grow like a growth ETF. So your not maximizing tax free growth. However if you have enough growth and require diversification then by all means use the Roth for a dividend etf . It is wrong to place any dividend etf in a traditional Ira since now you’ll be paying ordinary tax rather than the reduced tax rate that qualified dividends pay you. That’s a mistake. And in fact you really should never have a traditional 401K or IRA unless you have no choice ( over a Roth) and there is a matching employer contribution. Any type of IRA or 401k is merely an IOU to the federal / state governments. Smoke and mirrors and were only created as a forced savings for the inept saver.
if you look up and compare the two tickers over the past 10 years, VOO has returned 236.28% vs SPLG has returned 233.07% even though they both follow the S&P index.
Nice video and recommendations. Any thoughts on where the following ETFs should be placed into? GPIQ / iWMi / TLTW . Each are relatively NEW ETFs that might be considered by some investors.
A good argument for adding international stocks, despite how the US has outperformed international for so long, is the concept of reversion to the mean. Worst case scenario, it never outperforms but it's only a small portion of your portfolio anyway. Best case scenario, it's a good partial hedge. You never buy insurance because you're never going to need it.
Unfortunately for international funds, the mean you revert to is low.
@enonknives5449 that's why international should only be a small percentage of your portfolio. American stocks have been very dominant for a while, but it's unlikely that this will always stay true.
@@thomaslunden -- US stocks have outperformed in the long run and are likely to outperform in the long run. International stocks have infrequently outperformed and are likely to outperform only infrequently. That's how reversion to the mean works. I agree that international stocks should only be a small percentage of your portfolio...preferably zero. However, I might consider an international high dividend ETF like VYMI yielding 4.38%, since I'd be chasing the yield and not the growth.
I’ve been following international stock funds since 1994 and they just don’t perform that well, not as well as US large cap stock funds.
@@SnowyCountryChicken -- Exactly.
FYI.....the expense ratio is cheaper with SPLG (.02) than VOO (.03). Love me some State Street!
Best for me is VGT-VTI and SCHD that’s the only ones u might need
I prefer to put SCHD in a taxable account, because the dividends are likely to be low for a long time compared to your ordinary income. The qualified dividends will also be taxed at the lower long-term capital gains rate...which for many people will be 0%. The taxable account also gives you access to money that can be withdrawn without penalty. In the long run, you will want to use the SCHD dividends for funding retirement, and you can do that without selling something else and paying a lot of capital gains taxes to rebalance your allocation.
I would use tax-deferred IRAs/401Ks for growth stocks/ETFs, and for any income producing assets (bonds, REITS) since those would be taxed at the ordinary income rate anyway.
My Roth IRA is all in Vanguard Growth. Good call.
i would do the exact opposite. dividend/income in roth. growth in taxable.
to each their own.
@@michaelak1416 -- Growth in taxable also makes sense because there wouldn't be taxes on growth until you sell. You're in control. Dividends and income in Roth also make sense. Literally everything is better in a Roth. It is the tax-deferred IRA/401K that causes people trouble.
If I had to do it over again, I would have maxed out Roth, only put enough in 401K to get the match, and put everything else in taxable. Unfortunately, I'm thirty years too late.
@@enonknives5449 maybe it isn’t too late.
You should read your tax form, unless you’re making less than $47k included the dividends, it’s not taxed at 0%
@@rubiirae -- Long-term capital gains are still a lower tax rate. Also, I'm not single, so I can make $94K over the standard deduction.
Good video. It's good to see what other people are doing. I still prefer my schd.
My Roth is 60% VTI, 20% VXUS, 20% AGG. I have 13 yrs until retirement.
Great video! Thanks for the breakdowns! I’m going to have to watch again to fully absorb I think.
Great video but I was a little confused about SCHD and REITs with dividends.. you were saying they are better in a traditional IRA or 401k where the dividend would not be taxed?? I'm under the impression you would be taxed in those, and not taxed in the Roth..
This was the best explanation on what investments go best in an account type I’ve seen, thanks!
The truth is, we just don't know. The next decade going forward can be completely different. Just like 2010-2020 was the complete opposite of 2000-2009 (the lost decade). If you look at past performance at that time, then you would have been mostly in emerging markets in 2010 hoping to chase that recent outperformance. Instead, it completely flipped and US mega caps did best between 2010-2020, but did the worst between 2000-2009. We simply dont' know if the next 5, 10, 15 years will favor funds like SCHD, or VUG, or small caps, or international. The best thing we can do is be diversified (VTI + VXUS) because we just don't know which sector, market or country will outperform.
I do Total market and international also. But I have a REIT fund thrown in there as well. Even though I know REIT funds are crap….I am hopeful it makes a comeback in the future.
Just need categories
Fundamentals
Growth
Dividends!
I just started a Roth. I'm starting by keeping it simple with VOO/SCHD. Wonder if keeping SCHD in there and using my taxable as a spillover is a good move? Or maybe that's complicating things and just have it in taxable?
My core in my traditional is VTSAX mutual fund or (VTI). My roth core fund is VOO. I won't disclose the other funds because they are very controversial and unconventional.
Just VR and chill.
My HSA is 60% VT, 20% BNDW, 10% GLDM, 10% REET. (half of my portfolio is FDRXX while interest rates are high. This year I'll start changing that percentage more towards this portfolio).
Ex-US I prefer VEA.
Growth SMH, VGT, VONG, XBI, and VCR.
Dividends DGRW, DGRO, VOO, PRF, and SCHD.
Bonds BND, VGIT, VCIT, and VCSH.
I love VOO and have some VTI, too. In my Roth IRA as well as taxable brokerage account. The volatility lately has made me sit on the side to buy more. Just holding that extra cash in a money market getting 5.4% 7 day yield lately.
Can you do Fidelity also? Thanks.
What about small cap value ETFs? They are more risky but have outperformed large cap value and large cap growth over multi-decade periods.
Yes, those would be good for a Roth IRA
Same argument as with International in my opinion. One day the Magnificent 7 will slow their outperformance so it is wise to diversify beyond them.
Great video. Thanks, Jarrad! I'm a bit lost on your thoughts on dividend stocks in a roth. I thought you would want to shield high taxes from dividends and reit payouts in a roth. I would be happier with 1 million dollars in SCHD and O in a roth than 1 million dollars in VUG and SCHG. HELP! :)
REITs should be in a Roth because they don't pay out qualified dividends taxed at the capital gains rate.
Other securities paying qualified dividends can be held in taxable accounts.
Option trading should be done only in retirement accounts as gains are taxed at short term rate otherwise.
I keep my Roth IRA simple, slightly different opinions mentioned in the video, 75% VTI & 25% SCHD
Good video as always... Except those graphics make me feel like I have vertigo LOL
Haha oh no, sorry! All of them or the features of particular ones? Looking for feedback so we can improve on the graphics if it's an issue.
@@JarradMorrow, if it's the same feature that made me feel dizzy, it was the wobbling of the supporting data such as the "Exposure" spreadsheets and "Stock Style" graphs.
I haven't noticed any issues with the graphics in Jarrad's videos but flashing, spinning and wobbling graphics do make me feel like my vertigo is starting. Thanks, Jim
XLK 💪🏽
I have VTI-SCHD-VT and VICI
I am very new to the Roth IRA (made my first deposit on 9/13/24). Is it recommended to invest in all 4 of these or pick one or two of these? I watched a previous video on having a 2 fund portfolio that mentioned VOO and VTI. Thanks for the help.
How do you feel about a covered call ETF like JEPI or JEPQ in a ROTH IRA? Any pitfalls that should be considered in a ROTH in your opinion?
What ETFs do you recommend holding in a ROTH IRA while in retirement and making withdrawals?
Question, I am at the peek of my earning and so I am in a high tax bracket. Would that mean having my dividend stocks in my Rath IRA is better because it isn't added to my income? Having VOO in my taxable account let's me delay realizing that growth?
Does it make more sense to include leveraged ETFs in the Roth IRA account for mid-term investments?
Does re-investing dividends into a roth ira count towards the contribution limit?
No. Only the cash you put in counts toward the limit.
Good info
Looking at the charts (1yr, 3yr, 5yr, Max) for VXUS against VOO tells me to stay away for international.
Unfortunately that past performance doesn't tell us how things will play out in the future. It's definitely possible that VOO could continue to outperform but none of us know. Which is why global diversification will set you up to capitalize on whatever happens.
And a broken clock is right twice a day, but it is still broken. $10k invested in VOO since 2014 is now worth almost $38k, while VXUS is worth less than half of that.
Again, you're referring to the past and not the unknown future. I'm not suggesting I know what's going to happen either, though, which is why I promote global investing. But if going 100% U.S. stocks works for your personal investing style and behavior, then stick with it because that's all that matters 👍🏻
@@xlavahott4547do you think voo is still worth investing in it at this moment since it’s at a all time high currently?
Buy volatility folks! Preserve what you have or get rich. 😮
So VOO or VTI
I’m a VOO lover!😂
Check out SPLG. The expense ratio is cheaper than VOO. 🙂
you forgot IBIT or FBTC.
FBTC -10.44% in the last 6 months.
@@shaereub4450 yet up 28% YTD. Please confirm.
@@shaereub4450 it's up 28% YTD unfortunately. Don't get shaken out by small moves.
@@shaereub4450expand out in the next 10 years
Congrats dude, too bad you dont invest in these. hope you get you subs.
I have VTI, SMH, and SCHD and im riding that train for the next 20 years
Same I threw vgt in also
Will a well balanced Roth IRA make me a more generous lover?
You are mistaken. It’s not wrong to place a dividend ETF if a Roth account , it just doesn’t grow like a growth ETF. So your not maximizing tax free growth. However if you have enough growth and require diversification then by all means use the Roth for a dividend etf . It is wrong to place any dividend etf in a traditional Ira since now you’ll be paying ordinary tax rather than the reduced tax rate that qualified dividends pay you. That’s a mistake. And in fact you really should never have a traditional 401K or IRA unless you have no choice ( over a Roth) and there is a matching employer contribution. Any type of IRA or 401k is merely an IOU to the federal / state governments. Smoke and mirrors and were only created as a forced savings for the inept saver.
VOO 90%, BND 10%
See you in 30 years
Out of curiosity, why do most people choose VOO over SPLG? I know it’s personal opinion. Just curious
if you look up and compare the two tickers over the past 10 years, VOO has returned 236.28% vs SPLG has returned 233.07% even though they both follow the S&P index.
90% VT, 10% BNDW
We wont have a Country in 5 yrs much less 30
@@commonsenseisntcommon1776 that’s what the south said in 1865
'very low 0.4 expense ratio' lol
.04% expense ratio is 40 cents per $1k. I know 2nd grade math is difficult, but try to keep up.
Nice video and recommendations. Any thoughts on where the following ETFs should be placed into? GPIQ / iWMi / TLTW . Each are relatively NEW ETFs that might be considered by some investors.