Personal Investments • Financial Plan Help for 35 Year Old

Since she is at Fidelity, wondering what the Fidelity equivalents are to the Vanguard funds you suggested (unless Vanguard funds are available without a transaction fee at Fidelity ... will check).

The Vanguard holdings I proposed are ETFs that she should be able to buy at Fidelity like any stock at no charge (other than the bid/ask spread, again like any other stock). If she would prefer mutual funds over ETFs, then the Fidelity funds are:

Fidelity Total Market Index Fund (FSKAX)
Fidelity Total International Index Fund (FTIHX)
Fidelity U.S. Bond Index Fund (FXNAX)

With regard to using a money market fund vs the combo of 6 month treasuries and Pimco MINT ... gIven the yield curve, right now the money market yield is comparable. With a rate adjustment (should that happen), that would change -- but thanks for pointing it out.
...
PS Wondering why another poster suggested an 18 month duration ... maybe to avoid reinvestment risk should rates fall?

Just to clarify, I'm not suggesting she drop the 6m T-Bills, only that she swap MINT for VUSXX to avoid volatility given such a short time-frame.

I think if she knows the home purchase is no sooner than 2 years out, you might get some delayed reaction to a rate cut by going with longer duration (12m instead of 6m). A rate cut is expected at least once before the end of 2024 per the last Fed meeting, but they can always change their minds. A quick Google search gave me these YCharts results:

6 Month Treasury Bill Rate is at 5.16%
...
12 Month Treasury Bill Rate is at 5.11%

That difference might not be big enough to matter now, but if the rate drops 0.5%, she'll see it sooner if she's rolling 6m vs 12m

The specific call for an 18m duration requires a 2y T-Note in the secondary market with 18m of remaining duration. T-Bills are 1, 2, 3, 4, 6, or 12 months and T-Notes are 2, 3, 5, 7, or 10 years; there's no Treasury I know of that auctions with an 18m duration (see TreasuryDirect T-Bill FAQ). If she's comfortable rolling 6m T-Bills, that's fine!

It's also fine if she isn't bothered by swings of ±$10K in MINT vs zero-volatility in a MMF like VUSXX (or SPAXX at Fido although Fido MMFs pay less than Van or Schwab).

Statistics: Posted by bonesly — Tue Jun 18, 2024 10:58 pm — Replies 6 — Views 1002

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