The makeup of the MSCI US Broad Market Index (tracked by VTSMX) and the Dow Jones Wilshire 5000 Composite Index (tracked by SWTSX) are so similar as to be functionally the same.

If you look up each fund on Morningstar and click on the “tax” tab, it appears that VTSMX has historically been somewhat more tax-efficient.

On the other hand, the expense ratio of the Schwab fund is lower, and its index generally should have lower turnover and therefore lower trading costs.

Given how similar the two funds are, I wouldn’t base my decision upon their differences, but rather upon which company I’d rather have an account with.

I am little confused as to what might be difference between SWTSX and VTSMX as they both belong to Large blend (only difference being the expenses and the minimum investment for both).

the expense ratio for SWTSX is .09 (after waivers ), that means there is no guarantee that it would stay there..sounds like a bait and switch?
I can afford the $3000 minimum at Vanguard, but the expense ratio is .18% and has 3395 stocks??

they both seem good but with the low cost history of Vanguard’s Iam leaning towards it. Is that a wise decision?Being a novice here, anyone here can throw some light?
The account that Iam planning to invest in is a taxable account (not a Roth or any IRA account) for the long term. (5- 10 yrs)

I don’t know anything about SWTIX, and Morningstar doesn’t have anything about it either. A Google search shows that it was called Schwab Total Stock Market, but I know the ticker for Schwab Total Stock Market Index Fund is SWTSX.

Sorry I’m not more helpful here…

Love your piece of advice. do you know why the schwab site doesn’t have any information on the SWTIX fund? I mean I dont see any detailed information like cost, performance etc etc.. is the fund closed now?

To me, at a minimum, an investor needs a U.S. stock index fund, an international stock index fund, and a bond index fund in order to be diversified. A portfolio properly allocated between three such funds should get the job done for just about every investor.

That said, I believe there are additional diversification benefits to be gained from picking up a couple additional funds, such as a REIT fund or a small-cap fund. (More on that topic here.)

My own portfolio looks very much like the “5 fund” portfolio mentioned in this post. (Though it has a lower bond allocation and a higher allocation to each of the other funds.)

http://moneywatch.bnet.com/investing/blog/irrational-investor/insurance-investing-and-the-10000000-challenge-the-outcome/654/?tag=col1;blog-river

Thanks.

Allan Roth

Happy to hear you’re finding the blog helpful. To me, the question of whether to pay off student loans prior to investing comes down entirely to the interest rate of the loans. A little more information can be found here:
http://www.obliviousinvestor.com/pay-down-debt-or-invest/

Also, I’d generally suggest keeping some cash on hand rather than using all of it to invest/pay down debt. More on that topic can be found here:
http://www.obliviousinvestor.com/investing-step-emergency-fund/

Hope that helps.

I happened to stumble across this great blog and I have to say I like the way you write your articles. But may I ask for your opinion/advice? I’ve been thinking really hard about investing in index funds, I plan on starting with Schwab since I only have about $3k in the bank. I just got out of college, and I have about $10k in my student loan. I don’t own any credit cards. They say (e.g. in Motley Fool) that I have to settle my debt first before investing. My family says the economy’s down so I’ll only lose my money if I invest. But when should I start?? I feel like a sponge o___o you know, just absorbing all the info I can get without applying them. I feel helpless as a sponge!! o___o

Regarding your earlier comment, my suggestion when it comes to asset allocation is to look at your portfolio as a whole, not as a separate Roth portfolio and taxable portfolio.

So, add up the total investable money you have (both in IRAs and in taxable). Then determine your appropriate asset allocation. Then go about buying funds/ETFs that will reach that allocation. (Ideally, doing it in the most tax-efficient way. So, for example, if there were any funds you wanted to own that were particularly tax inefficient, hold them in the Roth rather than the taxable account.)