Before investing in an index fund, take the time to compare its expense ratio to the expense ratios
of other index funds in the same fund category.
There has also been a large fund covering the entire stock market — not just the 500 biggest companies — as well
as other index funds which slice and dice the stock market to any flavor you might want.
But like
other index funds from Vanguard, the Vanguard 500 Index Fund offers an ultra-low annual expense ratio of 0.14 % — a tiny fraction of the 0.5 % to 1 % charged by most similar funds.
He added: «And don't let them talk to you
about other index funds... and say you know, you have to have foreign or maybe you can pick a better industry.
I was excited that diversifying
into other index funds beyond VTI helped me to actually beat the market for the past 5 years.
People like Warren Buffett and
other index fund managers have expert staffs that can do due diligence with personal visits to the many components of a company.
My question for Ramit and the rest of you is
what other index funds would you recommend for someone in my shoes?
As with
the other index funds, the main risk with the VMGIX would just be volatility and possible drop in price in down market years.
In my 401k, or
other index funds, I «ve been dollar cost averaging those for years with monthly contributions.
Before implementing this strategy (whether it's with the e-Series or
other index funds) call your brokerage and ask about their policies so you don't get whacked with a fee.
Daniel: e-Series funds are available only through the internet but they are exactly the same as
any other index fund that tracks the same index.
Many of
the other index fund products out there claiming to track some special index are gimmicks designed to convince you to pay extra.
The Schwab 1000 (SNXFX) had a higher expense ratio than
other index funds.
I'm mostly investing in index funds, but I may want to occasionally move my investments around to stocks,
other index funds, or move to cash to ride out stormy markets.
Chetan, from what I've read elsewhere, if you're buying a target retirement fund, it's not a good idea to mix
other index funds with it, because the target retirement fund has a set allocation that most likely includes a mix of index funds, and by buying other index funds, you're messing with the allocation.
This differs from
other index funds, in that most are capitalization - based, meaning stocks with higher market capitalization (or value) are held as a higher percentage of the fund.
ETFs are always indexed and tend to have management fees and expense ratios significantly lower than actively managed funds and in some cases lower than
other index funds.
Trading in an ETF is just like buying or selling the Sensex Fund or
any other Index Fund listed on the stock exchange.