Vanguard Index Fund?

[HalMd]

Can anyone talk me out of the Vanguard Total Stock Market Index Fund (VTSMX)? I like it because it has a lower than average expense ratio, and I read good things about Vanguard funds in general.

This is for the more conservative portion of a non-retirement account. Time horizon of 5-10 years, or maybe even longer.

[safari]

Re: Vanguard Index Fund?

When investing in index funds, the most important thing to consider is the expense ratio because similar index funds from different companies invest in the same stocks, so the difference in the return on your investment will only be affected by the management fees which each respective fund charges. Take a look at Fidelity Spartan Index Funds, which have the lowest expense ratio in the industry (0.10%). The Fidelity's equivalent to Vanguard's VTSMX is Spartan Total Market Index Fund (FSTMX). Its only downside is that it requires a minimum initial deposit of $10K, compared to $3K at Vanguard.

Here is an interesting article that talks about a research study about investing in index mutual funds and the lack of understanding that a lot of investors have regarding the fees http://knowledge.wharton.upenn.edu/a...TOKEN=80152872

[HalMd]

Re: Vanguard Index Fund?

safari, thank you. That is a huge tip.

Vanguard has a similar index fund with a 0.09% expense ratio, but it requires a whopping $100,000 minimum investment.

Thanks again.

[Ima saver]

Re: Vanguard Index Fund?

I started with Vanguard many years ago. I am in their Index 500 fund. back then, Fidelity charged a 3% load, so that is why I went with vanguard instead.