Vanguard 500 Index Fund

likme
likme

Hey Veeky Forums,

I'm looking at other alternatives to invest my money for retirement, and I was wondering if investing in a Vanguard 500 Index Fund would be a good idea. Currently I contribute 3% to a 401k and Roth IRA (401k is employer matching), but I don't think they're enough for securing my future.

Also one other question: can I dump my distributions into an IRA so I don't get taxed on them?

I have enough in my savings to cover the $3k minimum investment for the Vanguard 500 Index Fund. Just wanted to get some opinions from Veeky Forums.

All urls found in this thread:

bogleheads.org/wiki/Three-fund_portfolio

StonedTime
StonedTime

I was going to do the same thing and put 3k into VTSMX.

it was at $58 when i was thinking about it 2 months ago its at about 61 dollars now.

I think it's fine if you don't know of any stocks that can perform better or don't want to bother with any risk/research.

it will at least keep up with inflation.

idk anything about taxes sorry. I'll have to figure it all out soon enough.

happy_sad
happy_sad

Vanguard 500 Index Fund

What is the difference between VTSMX and VFINX?

Poker_Star
Poker_Star

how about you read the prospectus of either before actually investing in them

crazy concept in this crypto bubble, I know

GoogleCat
GoogleCat

I mean, you don't like the crypto spam, and you shoot down discussion like this. This board deserves to go to the dogs.

Snarelure
Snarelure

not now. overvalued. total U.S. stock market is now valued at more than 150% of annual gross domestic product.. the major problems with the US economy aren't fixed, and the only reason things look better than they should be is bc of QE wait for the next crash then buy buy buy to make a 150% return in a three years.

haveahappyday
haveahappyday

What do you believe will happen as the Fed begins a more contractional monetary policy (such as rate hikes)?

BunnyJinx
BunnyJinx

espers.io dedicated dev team and a community that's alive and kicking it's around 13-15 sat and will rise to 100 easy maybe even to 500 sad at the end of the summer 1000 if the market continues and it will be a $1 coin 10 years easy

farquit
farquit

What coin is this?

New_Cliche
New_Cliche

fed has already raised rates 3x in the past 2 years and nothing happened except bonds fell a little bit.

cum2soon
cum2soon

also retardedly out of date graph.

If you started buying in 2009 youve done 3x your money right now, probably about 4x including dividends

no reason to think this is a buble, especially if youre posting on a fucking crpyto forum

5mileys
5mileys

I invested in Vanguard's 500 fund, but if I were to do it all over again I would do the 3 fund portfolio:

bogleheads.org/wiki/Three-fund_portfolio

CodeBuns
CodeBuns

of course you would have made 3x your money, AFTER buying the crash. what caused 2008 was never fixe, and the problem has only exacerbated a decade later.. It's his decision if he wants to invest now, and even if there's a crash tomorrow he'll make his money back eventually. I'm saying he'd make even more buying at a recession price that reflects the recession economy, rather than buying into a market inflated with cheap money and trump optimism.

PackManBrainlure
PackManBrainlure

I've been buying VDE the past few weeks. Too much hot money going into tech and it feels like there will be a rotation out pretty soon. Oil stocks have also been falling faster relative to the price of crude and I could see there being support at the $45 (WTI) level.

Deadlyinx
Deadlyinx

you could do a lot worse (e.g. shitcoins like 99% of the posts on this board).

for US stocks, I'd probably opt for VTSAX/VTSMX instead to get more exposure to smaller companies

if you want to balance out being too heavy on US stocks, VTIAX/VGTSX covers the rest of the world

when you get older and worry about losing it all, you can exchange some stock funds for VBTLX to get some bonds for stability

AwesomeTucker
AwesomeTucker

Is it worth using a Roth IRA for index funds or should I go with big dividend paying stocks instead?

Sir_Gallonhead
Sir_Gallonhead

Index funds. Dividend paying stocks are better once you're in the retirement phase. You're looking for growth and dividend stocks do not provide this.

5mileys
5mileys

I invested in Vanguard's 500 fund, but if I were to do it all over again I would do the 3 fund portfolio

for US stocks, I'd probably opt for VTSAX/VTSMX instead to get more exposure to smaller companies

These are the correct answers in this thread.

Also one other question: can I dump my distributions into an IRA so I don't get taxed on them?
No. Distributions (along with dividends, interest, and capital gains) are unearned income and cannot be used to make contributions to a tax-advantaged account like an IRA.

What is the difference between VTSMX and VFINX?
Total Market is an cap-weighted index of all stocks on the U.S. exchange. It's mostly large-cap stocks (70%) but also includes small and mid-caps. S&P500 is an index of 500 large-cap stocks.

Total Market is both more diversified and has a higher expected performance because small and mid-caps have historically outperformed large-caps over the last 90 years.

and the only reason things look better than they should be is bc of QE
QE ended in 2014. You're not very smart.

Dividend paying stocks are better once you're in the retirement phase. You're looking for growth and dividend stocks do not provide this.
Inside a tax-advantaged account, such as a Roth, the tax disadvantages of dividend stocks are neutralized. Therefore he should be looking for total return, not just growth. By the same token, most high-dividend stocks are depreciating assets and a poor investment for anyone. Therefore your recommendation (index funds) is correct, but not for the reason you state.

BunnyJinx
BunnyJinx

buying babby funds made for retarded boomers who are looking to be rich when they reach 80
Just buy crypto.

SomethingNew
SomethingNew

Long-term investor here.
We're in the second longest bull market in history. Yes, invest in that fund, but also get into bonds. I recommend the 3-fund lazy portfolio - I use that one for my husband because it's simple.

Make sure to take a hard look at yourself and consider whether you can hold through bear markets and crashes.

I have 75k at age 25 before I even have a full-time job using this method.

LuckyDusty
LuckyDusty

I plan to open a Roth IRA with vangaurd this year, as I don't qualify for the tax deductions with a regular IRA. Can anyone speak to the pros/cons of ETFs vs. Index Funds?

The minimum investments scare me with Index Funds, but having partial shares seems nice compared to ETFs. I feel like you can't go wrong with either - but it's scary to throw $3k into something as your first investment haha

Crazy_Nice
Crazy_Nice

ETFs can be index funds. Except they trade throughout the day on an exchange, hence the name. You can buy an ETF index fund but you must buy them in whole increments unlike with mutual funds.

The difference is that you can sell an ETF anytime the market is open, whereas a mutual fund transaction will occur at the end of the trading day.

ETFs are more liquid and can track the same index as a mutual fund. But an ETF will generally have a slightly higher expense ratio.

StonedTime
StonedTime

so for long term investing (think typical Boglehead "buy and hold" simple portfolio) is there any advantage to one ETFs vs. an equivalent fund like VTSMX?

Illusionz
Illusionz

I think in this case, and actually in most cases because I mispoke earlier, ETFs have lower expense ratios. Look into VTI which is the ETF version of VTSMX. The expense ratio is 0.04%.

Raving_Cute
Raving_Cute

mind sharing your portfolio allocations user?

Soft_member
Soft_member

Accumulating funds because I'm in Belgium and don't want double dividend taxation.

iluvmen
iluvmen

Oh, and my bond fund is not that good. there's lower management fee bond funds out there that cover global government bonds.

LuckyDusty
LuckyDusty

We're in the second longest bull market in history.
This isn't even remotely true. The 1990-2000 bull run is the longest since WW2, and there were bull runs of 12-16 years prior to that.

But your advice is solid nonetheless.

Stark_Naked
Stark_Naked

ETFs can be index funds
All ETFs are index funds. Well not exactly all, but 99.5% and every ETF that you've ever heard of is an index fund.

The regulations for an actively managed ETF are insane, and it's typically not practical to run one.

Sir_Gallonhead
Sir_Gallonhead

Oops, probably misremembered an article going "second longest since ____" :)

WebTool
WebTool

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