Investing gurus! Help needed with choosing Index Fund!

[InlineFive]

I'm new to investing and from what I have read and seen it seems Index Funds are a good way to go. Anyway since I can't deposit a lot intially I have narrowed the funds down to two possible candidates. Scudder S&P500 Index and the Drefus S&P500 Index. However I am at a bit of a loss as to which would be a better fund to go with. Any comments, ideas, suggestions?

I would be buying these through Ameritrade?.

Thank you!

-Por

 

[Viper GTS]

Mutual funds are great for people who don't have a lot of options available (think 401k) and for people who want relatively easy, mindless investing. Put money in, it will roughly follow the market (typically slightly worse)

If you're willing to invest the time & effort you can do much better than the market.

Those two funds seem to be very, very similar.

Viper GTS

 

[Kenazo]

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yes, I need it to rise.

 

[kranky]

Why didn't Vanguard make the cut?

All index funds based on the S&P 500 should perform similarly (obviously!), so pay attention to the expense ratios. In other words, how much does the management company take each year as compensation for managing the fund? Lower is better.

 

[InlineFive]

Originally posted by: kranky
Why didn't Vanguard make the cut?

All index funds based on the S&P 500 should perform similarly (obviously!), so pay attention to the expense ratios. In other words, how much does the management company take each year as compensation for managing the fund? Lower is better.

I would like Vanguard since they perform the same as the other ones (like you said, duh) and the fact that their expense ratio is about .4% lower then the ones I am looking at. Unfortunately it requres a minimum investment of $3k and I don't have that much right now to experiment with. Wish I did though...

Thanks for the help!

-Por

 

[FeathersMcGraw]

Originally posted by: kranky

All index funds based on the S&P 500 should perform similarly (obviously!), so pay attention to the expense ratios. In other words, how much does the management company take each year as compensation for managing the fund? Lower is better.

Not to mention front or back-end loads. Assuming that most index funds (which track the same index) perform similarly, why would you bother investing in one that charges fees to purchase or sell shares when there are plenty that don't?

 

[Drekce]

I bought into the Vanguard 500 Index after some research. I say that if you are staying in for the long haul you should wait until you have that $3,000 and go with them. That 0.4% lower expense ratio WILL make a difference in the long term.

 

[InlineFive]

Originally posted by: Drekce
I bought into the Vanguard 500 Index after some research. I say that if you are staying in for the long haul you should wait until you have that $3,000 and go with them. That 0.4% lower expense ratio WILL make a difference in the long term.

Hmm. What about putting money in the Scudder untill I have enough (in the fund and onhand) to afford the Vanguard?

-Por

 

[rufruf44]

Where are you buying this? From a brokerage account via their no load-no fee funds, or directly through the fund families themselves?
Vanguard has the lowest expense indeed, but they have mandatory $10 fee for all index funds below $10K. I think its waived for IRA over $5K or if your combined balance with them is over $50K, not 100% sure though.

 

[InlineFive]

I would be buying these through Ameritrade? with no-loads. I don't know how to buy them directly from the family. Is there a benefit from that? And is that mandatory fee annual, quarterly, etc?

-Por

 

[InlineFive]

Bump for more advice?

 

[DuffmanOhYeah]

Originally posted by: PorBleemo
I'm new to investing and from what I have read and seen it seems Index Funds are a good way to go. Anyway since I can't deposit a lot intially I have narrowed the funds down to two possible candidates. Scudder S&P500 Index and the Drefus S&P500 Index. However I am at a bit of a loss as to which would be a better fund to go with. Any comments, ideas, suggestions?

I would be buying these through Ameritrade?.

Thank you!

-Por

neither. If you are set on an index fund, VFINX is the way to go.

 

[dirtboy]

You don't need to be a guru to pick something as idiot proof as an index fund.

 

[InlineFive]

Originally posted by: dirtboy
You don't need to be a guru to pick something as idiot proof as an index fund.

 

[Zenmervolt]

Scudder. Lower expense ratio.

ZV

 

[Zenmervolt]

And to those who say that you can do better than the market, I assume that you have the empirical studies to back that up and negate the reams of studies that for all intents prove that you cannot beat the market once transaction costs are figured in unless you are involved in insider trading.

ZV

 

[SuperTool]

I would not get an index fund. I think it's lame, because it's not selective enough. You are going to be riding the waves of the market instead of investing in what fits you.
half of my 401k is in NBGEX, which was making money both when the market was going down and going up.
my Roth IRA is in VEXPX, which is all right.

 

[robh23]

Originally posted by: Zenmervolt
And to those who say that you can do better than the market, I assume that you have the empirical studies to back that up and negate the reams of studies that for all intents prove that you cannot beat the market once transaction costs are figured in unless you are involved in insider trading.

ZV

listen to zv he is well versed in the basics of portfolio theory.

 

[sygyzy]

If you are investing in a Roth IRA, you only need $1000 for Vanguard Funds.

 

[Double Trouble]

If you're willing to invest the time & effort you can do much better than the market.

Nyet..... negatory on that one. While you can beat the market in the short run, you cannot outperform the market in terms of risk-adjusted returns over the long haul.

PorBleemo, have you considered a spiders? Take a peek at the here for an explanation of SPDR's (spiders). They are in fact very similar to a regular s&p 500 index fund, but spiders offer distinct advantages that may or may not make them more attractive to you as an investor. The expense ratio for SPY is only around .011% to .012% -- much less than the expense ratio of even the 'cheapest' mutual fund.....

 

[darkshadow1]

if you're investing through ameritrade, make sure you're above the $2000 maintanence fee level...if you're not above it, they charge you $15 a quarter which ends up eroding much of the benefit of investing in the market. at this point, given the amount of capital you have, you should probably invest in some shares of spiders (ticker SPY) and hold it until you have enough money to open up a vanguard or fidelity account. You might also consider making your account into an IRA.

As for whether you can beat the market or not...the average person may not be able to but there are plenty of individuals out there who are beating the market on a consistent basis (there are also plenty of people who are underperforming the market as well ). It's just usually the case that those who can get paid a lot to do so.

 

[abc]

Originally posted by: SuperTool
I would not get an index fund. I think it's lame, because it's not selective enough. You are going to be riding the waves of the market instead of investing in what fits you.
half of my 401k is in NBGEX, which was making money both when the market was going down and going up.
my Roth IRA is in VEXPX, which is all right.

what is nbgex?

 

[wbresson]

Whats everyone think about oil/power index's ? Vangaurd Energy comes to mind although I haven't personally looked at it

 

[InlineFive]

Originally posted by: darkshadow1
if you're investing through ameritrade, make sure you're above the $2000 maintanence fee level...if you're not above it, they charge you $15 a quarter which ends up eroding much of the benefit of investing in the market. at this point, given the amount of capital you have, you should probably invest in some shares of spiders (ticker SPY) and hold it until you have enough money to open up a vanguard or fidelity account. You might also consider making your account into an IRA.

As for whether you can beat the market or not...the average person may not be able to but there are plenty of individuals out there who are beating the market on a consistent basis (there are also plenty of people who are underperforming the market as well ). It's just usually the case that those who can get paid a lot to do so.

Hmm. I'll have to look at that Ameritrade fee. Thanks for telling me about it!

-Por

 

[Hector13]

Originally posted by: robh23

Originally posted by: Zenmervolt
And to those who say that you can do better than the market, I assume that you have the empirical studies to back that up and negate the reams of studies that for all intents prove that you cannot beat the market once transaction costs are figured in unless you are involved in insider trading.

ZV

listen to zv he is well versed in the basics of portfolio theory.

wow.. was that sarcasm or did you finally start reading the books they give you in class??