Vanguard's Total World Stock Index Fund

Today, Vanguard announced it's new "Total World Stock Index Fund (VTWSX)". This fund will track FTSE All-world Index.

My view on this fund

Pros:

1) Good fund for starters who cannot afford minium down pay of $3000 for each Total Stock Market (VTSMX) & Total All-World ex-US (VFWIX). You get instant diversification world wide. Ideal for first time Roth (with $5000 cap for 2008) with 100% equity allocation.

2) Ideal for those who don't want to fight the market with domestic (US) & international allocation. This fund will automatically drive allocations.

3) I expect less turnover (stock churn) as most of the companies in this fund are international large cap.

Cons:

1) Expense Ratio of 0.45 is slightly on higher side. Combination of VTSMX & VFWIX has average expense ratio of 0.30.

2) No exposure to domestic small cap (which is provided by VTSMX).

3) Upfont purchase fee of 0.25% (though might be eliminated in future). While Vanguard just eliminated purchase fee for VFWIX.

4) This new fund only has around 2900 companies while VTSMX & VFWIX provide exposure to lot more.

Conclusion

I would recommend this fund to starters who want instant global equity diversification.

I am going to skip this fund and keep my allocation to VTSMX and Total International VGTSX. However, I might change from Total Interational (VGTSX) to All world ex-US (VFWIX) since there is no purchase fee for VFWIX now.

Are you diehard/Boglehead ?

Take this questionnaire and find out if you are diehard/Boglehead when it comes to your personal finance. I have copied this questionnaire from this thread on www.bogleheads.org

My score is 16. I lost one point on question 6 since my portfolio has small cap tilt. But I am comfortable with risks associated with small cap premiums (less volatile than REIT fund in my Roth :-D). And obviously, it meets my sleep test.

ARE YOU A DIEHARD/BOGLEHEAD?

1. In these trying times, do you think it's reasonable to make tactical allocation changes?
(Y=0, N = 1)

2. Is the best strategy to simply to hold a broadly diversified portfolio and stay the course?
(Y=1, N =0)

3. Critics argue that buy and holders are simply sticking their heads in the sand as risk rises in the marketplace. Do you agree?
(Y=0, N=1)

4. Do you manage risk by diversifying among different types of securities - including bonds - and then staying the course?
(Y=1, N =0)

5. Do you rebalance and make necessary adjustments based on our own personal situation -- not on market forecasts?
(Y=1, N =0)

6. Do you overweight your portfolio to take advantage of the so-called value and small-cap premiums?
(Y=0, N=1)

7. Do you hold a broad market index fund and stay the course?
(Y=1, N =0)

8. Do you actively trade ETFs?
(Y=0, N=1)

9. Do you invest in high-cost actively managed funds?
(Y=0, N=1)

10. Do you consider yourself a market timer?
(Y=0, N=1)

11. Do you save regularly?
(Y=1, N =0)

12. Do you avoid mistakes?
(Y=1, N =0)

13. Do you have an asset-allocation plan?
(Y=1, N =0)

14. Do you diversify with broad market index funds?
(Y=1, N =0)

15. Do you keep costs low (including taxes)?
(Y=1, N =0)

16. Do you strive for simplicity?
(Y=1, N =0)

17. Do you stay the course?
(Y=1, N =0)

****************************************************


SCORING:
17 = You ARE John Bogle!

13-16 = Give that man a Bogle Bobblehead! Charter member.

10-12 = Pretty Boglish! Stay the course!

6-9 = You've heard the word, but haven't quite walked the walk.

3-5 = Eek. Good luck with that!

0-2 = Unrepentant market timing stock trader!

Firefox 3 is here

Today, Mozilla foundation released Firefox 3.0. I downloaded it on my Windows machine (waiting for Ubuntu repos to update RC to final) and thus contributed my share to world record download.

I remember blogging about Firefox 1.0 release almost 4 years ago. Firefox 1.0 was slow and bloated. Firefox 2.0 was certainly better but Firefox 3.0 is nirvana.

Now I hope all themes and extensions get updated soon.

Linux Mint

Today I installed Linux Mint 5 (Elyssa). Two years after using Kubuntu, this certainly feels like a breathe of fresh air. Beautiful artwork, all codecs built in with base platform of Ubuntu. Wonderful !

However, Mint comes with its own share of problems (at least on my machine)

1) My netgear wireless stick (MA111v2 with SIS chipset) still does not work. There are no native WLAN drivers.

I tried to load windows driver using ndiswrapper. I was successful in making kernel detect a wireless interface. But I could make it get valid IP address from my wireless access point. I tried all the tricks in my book (using iwconfig + dhclient + GUI network tools) and finally gave up by uninstalling ndiswrapper. Back to wired network !!

2) Pulse Audio server shipped with Mint (through Ubuntu 8.04) has serious issue of "sound stuttering". If any sound application (like Totem, VLC, Amarok etc) is playing sound, and then one tries to start any other application, sound momentarily stutters. I googled for this issue and found several users complaining. Hope they fix it soon.

Other than these two issues, it has been smooth sailing. Here are couple of screen shots of my machine for your viewing pleasure :-)

Temple Visit

I went to temple today morning and spent some time there (No, this visit was not because India beat Pakistan in Cricket today. I used to do that in India :-D).

I only had two hours of sleep last night and I woke up stressed & fatigued. Visiting temple always gives me strength and lightens me up. The environment was quiet and peaceful.

I am feeling fresh now and have enough energy to get through my work day. Hopefully, I will sleep well tonight.

It hurts

It has been more than 2 months since I blogged. But past two months have been pretty interesting (and has changed me a lot). I have done things I never did before and I have said things I never said before. I preferred other things over my work (which I had never done before) and didn't bowl a single ball in cricket for two months (pretty unusual considering last two years).

I stopped watching online lectures..which I used to do pretty regularly and couldn't finish a single book lying in my bedroom since last two months. But then I never stopped watching movies and having fun time with friends. Frequency to gym was certainly reduced.

I feel that all this time (during which I did not do all these things) was not at all wasted. But it was time well spent. I discovered new abilities to do things and say few words which I never knew existed in me.

Sometimes I even wondered.."What the heck has happened to me ?"...I thought it was work stress for sure. But then something inner in me says there was more to it. May be I am bored with all those things..May be I want a change....But then, I still felt like doing these things I have been doing..its just that I never actually did it.

But now, I think I should get my act together and do things I have been enjoying. And if life throws lemons on me..I will make a lemonade and cool myself. If it throws oranges..I will turn them to orange juice..

I know you don't care about "whatever crap" (in somebody's language) I wrote above. But then why the heck did you visit this blog.

Back to gym and whey protein shake...