Comfortable holding ITOT and/or SCHB “forever” ?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
Topic Author
Carbonate24
Posts: 72
Joined: Sun Mar 12, 2017 8:19 pm

Comfortable holding ITOT and/or SCHB “forever” ?

Post by Carbonate24 »

I have general question about whether you feel comfortable holding ITOT and/or SCHB forever…..

Background: I consider myself a novice investor always working to learn and get better. Prior to finding this site (and prior to reading numerous books BH Guide to Investing, etc..) I primarily bought individual stocks that I picked. After becoming more informed, I started putting my money nearly exclusively into VTI and VXUS. I’ve gotten very comfortable holding these Vanguard ETFs forever (including buying them in my kids custodial accounts with horizons of many many decades). Due windfall about a year ago, I put a chunk of money into VTI (in my taxable account), and that VTI lot currently has a sizable loss. I’d like to sell that VTI and TLH with some of those individual stocks (with substantial gain) that I bought over the past 30 years. Then I'd like to invest proceeds back into US Domestic Market, potentially through ITOT or SCHB.

Issue/Question: I feel totally comfortable holding my VTI forever. I am less familiar with instruments managed by Schwab, Fidelity, Black Rock just because I’ve kept it simple and stuck with a few Vanguard ETFs. For those of you who have ITOT and/or SCHB, are you comfortable holding those for the long haul?

I have reviewed a lot of posts on VTI vs ITOT vs SCHB, and I see a range of considerations including: expense ratios, number of holdings, whether they are substantially identical or not, slight differences in performance, liquidity/trading volume, and so on….all of which are considerations…..but taking all of those considerations into account, would you have any reservations about holding ITOT or SCHB for 50 years?
User avatar
mokaThought
Posts: 329
Joined: Tue Jan 01, 2019 7:57 pm
Location: Texas
Contact:

Re: Comfortable holding ITOT and/or SCHB “forever” ?

Post by mokaThought »

See this post concerning VTI and ITOT not being substantially identical: viewtopic.php?p=5056367#p5056367

(edit: In fact, see that whole thread about swapping ETFs for TLH.)
Jack FFR1846
Posts: 13692
Joined: Tue Dec 31, 2013 7:05 am
Location: 26 miles, 385 yards west of Copley Square

Re: Comfortable holding ITOT and/or SCHB “forever” ?

Post by Jack FFR1846 »

To *me*, they're all the same. I currently hold SCHB, SPTM, VTI, FZROX, FXAIX. As far as I'm concerned, there's no real difference. Feel free to TLH from your VTI into SCHB.
Bogle: Smart Beta is stupid
BlueMoonXD
Posts: 27
Joined: Sat Sep 14, 2019 11:50 pm

Re: Comfortable holding ITOT and/or SCHB “forever” ?

Post by BlueMoonXD »

Short answer -- Yes.

The difference between these funds is extremely negligible, both in terms of expenses and holdings. If you prefer to keep it simple and stick with all Vanguard funds that's perfectly fine, but IMO there's no real reason to treat ITOT or SCHB differently.

If the TLH benefits are significant, it would make sense to go ahead and realize the losses. There's a good likelihood that in 31 days the market will still be below your initial cost basis (and possibly lower than today), so you could still move back to VTI. But you'd be fine if you had to hold them for the long-haul.
MotoTrojan
Posts: 11094
Joined: Wed Feb 01, 2017 8:39 pm

Re: Comfortable holding ITOT and/or SCHB “forever” ?

Post by MotoTrojan »

ITOT has historically been even more tax-efficient than VTI, and it isn't going anywhere. Yes, I would feel comfortable holding it forever.
Topic Author
Carbonate24
Posts: 72
Joined: Sun Mar 12, 2017 8:19 pm

Re: Comfortable holding ITOT and/or SCHB “forever” ?

Post by Carbonate24 »

My unexpected windfall was large...all invested in VTI, and so my current loss is large as well....would allow me to get out of all but 3 of my individual stock holdings.
MotoTrojan
Posts: 11094
Joined: Wed Feb 01, 2017 8:39 pm

Re: Comfortable holding ITOT and/or SCHB “forever” ?

Post by MotoTrojan »

Carbonate24 wrote: Wed Apr 01, 2020 2:03 pm My unexpected windfall was large...all invested in VTI, and so my current loss is large as well....would allow me to get out of all but 3 of my individual stock holdings.
Sounds like a win. Just realize you'll have to pay that tax-savings someday (unless you die with the shares or give to charity) so it can be even more beneficial to use the loss for $3K/year in offset income (short-term rate), but nothing wrong with using it to wipe out some cap-gains either.
Post Reply