PREIX
T. ROWE PRICE EQUITY INDEX 500 FUND T. ROWE PRICE EQUITY INDEX 500 FUND
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I’m about to open an IRA and I’ll probably start with an S&P index fund or something. I work for an investment firm and when I see the product catalogue of mutual funds we can invest in, here’s my question. Does it matter buying shares of a mutual fund (i.e. VFIAX closed at $633.31 per share vs. PREIX closed at $180.38) at a higher price or lower price? Expense ratio for VFIAX is .04 (my firm has an arrangement with Vanguard) or PREIX with a ratio of .18? Obviously the amount of shares owned will help with capital gains distributions, but apparently a lower expense ratio is better for returns? I have a S7 and S66 but I’m in compliance so I don’t do any financial planning lol
Yeah it’s hard to look away from the returns it’s generated without any contributions. But I feel like we should “take the money and run” now and just shoot for a hopefully steady 6-7% gain and much lower fees. The fees I’m seeing for POMIX are identical to PREIX at .18, that’s why I was up in the air about which. Logic for a more diversified spread would say the total market fund and with the current roller coaster ride, it might be the right choice for now. That said, now that it’s my understanding there are no tax implications by changing brokerages, we may make the swap to a similar portfolio at Vanguard for even lower fees. I like the idea of it being investor owned and not beholden to stockholders.
Look at those returns - pretty solid. But yeah, those fees are eating into your gains big time. Your 50/20/30 split sounds reasonable at her age. PREIX is actually a better choice than POMIX - lower expense ratio (0.19% vs 0.85%) and tracks S&P 500. With your pension + SS + that union fund, you're in a good spot. No need to chase aggressive returns. Focus on preserving what you've built while keeping up with inflation.
Mutual funds, if we mean mutual funds across the entire world, probably have far more assets under management than ETFs have. they're fine, in principle. the main advantages of ETfs are lower capital gains taxes (in a taxable brokerage) and portability across brokerages. otherwise, there's no major difference between VOO or FAXIX or PREIX. they're all S&P 500 funds, but VOO is an ETF and the others are mutual funds. ETfs are a new innovation, getting really popular in the last 5-10 years and starting about 2000. mutual funds, in the modern sense, go back to the 1940s but have roots that are centuries old. 'Closed end funds' are similar and go back to the 1920s if not earlier.
At your age, all stocks, no bonds. I'd strongly suggest you avoid "international" and "global" and "developed markets" and stick with American stocks, because the international investment funds never grow into anything. Vanguard Growth Index Admiral Fund (VIGAX) is a NASDAQ index fund, and T. Rowe Price Equity Index 500 (PREIX) is and S&P 500 index fund. Split halvsies between those two ... or maybe mix in a little of the mid-cap Schwab fund. Agreed that at your age, you do not want to pack all of your spare cash into a retirement fund. After you've got a pile of savings (enough to replace your car with a new one, make a down payment on a house, and still have plenty left over) then sure, max out the 401(k). Maxing out the 401(k) early in life is a mistake because then you end up needing the money where you can't touch it without paying RUINOUS tax penalties.
The best one I’ve seen is PREIX(TROW Equity 500) YTD: +5.23% 5Y: +75.85% 10Y: +166%
Been stuck in employer sponsored "target retirement 2025" fund for the past many years. (much through my ignorance, yes). The ten year performance is barely 6%. We want to roll it to an index fund IRA like SWPPX or PREIX asap. Is there reason to roll that in over 4 months or 12 months or should I just swap it 100% on Monday? We won't need this for at least 5 years. USA.
If you are with a good brokerage outside of Vanguard like Schwab or Fidelity, their equivalent index funds are good. Schwab's total us market mutual fund SWTSX, for example, has an expense ratio of .03% compared to VTSAX which is .04%. Fidelity has zero cost funds if you plan on staying with them. If your using a brokerage that kinda sucks, like say T Rowe Price, their in house S&P 500 index fund PREIX has an ER of .20%. So in that case, using a Vanguard ETF or fund would be a better choice.
If just starting invest in a mutual fund index fund something that tracks S&P 500 or something similar maybe T Rowe Price PREIX . put in regular amount every month. Fees are low and you dollar cost average. Over time you will be successful. Good luck.
Merrill Edge really needs to step their game up. It's not about small investors. It's about building up investors long-term and getting them into the banking side with BOA. However, with Schwab low cost per share ETFs ME has no need to change even if they don't offer fractional shares. SCHB is under $50 per share. SCHD is under $80 per share. Those 2 ETFs alone can easily build up wealth for young investors. At least up to $3K, and then they can switch to PREIX (T.Row S&P 500 fund).
I'd put into the cheapest index fund provided by your employer's 401(k) or deferred income plan, if any. I've been putting into PREIX for my 401(k) and VTSAX for my IRA every paycheck automatically. Don't plan to change it because of market conditions, but I may change my portfolio mix as I get older and risk appetite changes. I haven't done much fund investing on the taxable side aside from tax exempt bond funds. I've pretty much kept a taxable brokerage account to be an amateur stock trader or something to chit chat with coworkers about. Instead of sports teams, we talk stock picks. Even still, if I had serious money directed at a taxable account, I'd still do vtsax.