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Author: Lora726 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75381  
Subject: Index Accounts Date: 7/17/2001 6:23 PM
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So I hear I should be putting my 401(k) investments into an index fund; our plan offers two - a mid-size and a large cap fund; any benefits / downside to either?
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Author: bigcaat Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 30806 of 75381
Subject: Re: Index Accounts Date: 7/17/2001 6:50 PM
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So I hear I should be putting my 401(k) investments into an index fund; our plan offers two - a mid-size and a large cap fund; any benefits / downside to either?

*********************

It's like comparing apples and oranges. You need both to diversify. Ask yourself the following questions:

1. What is your asset allocation plan?
2. How long do you have to invest?
3. What other investments do you own? Would you be duplicating something that you already own with one or the other?

A good place to start answering some of these questions is the link below.
http://socialize.morningstar.com/NewSocialize/Asp/FullConv.asp?convSeqNumber=3321&forumId=F100000015&actionCode=

I see that this is your first post...welcome. Perhaps you could post back and let us know some specifics. What funds are you being offered? What else do you own? Any specifics you can give us about your situation will help us to help you better.

My last (and standard) suggestion is to pick up the book "Mutual Funds for Dummies." It's an excellent resource for novice investors.

Again, welcome to the Fool.
Caat



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Author: ResNullius Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 30807 of 75381
Subject: Re: Index Accounts Date: 7/17/2001 6:53 PM
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So I hear I should be putting my 401(k) investments into an index fund; our plan offers two - a mid-size and a large cap fund; any benefits / downside to either?

Both have benefits. If you invest in both, you will have greater diversification, but the choice is your's to make.

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Author: Lora726 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 30848 of 75381
Subject: Re: Index Accounts Date: 7/18/2001 7:55 PM
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Caat - Thanks for your quick response and the welcome.
My 401(k) is a non-employer-contributory one. They just switched to ING, Aetna Financial Services & are offering about 20 funds. About half of these are Aetna funds - Ascent, Balanced, Bond, Crossroads, Fixed Account, Growth, Growth & Income, Index Plus Large Cap, Mid Cap, International, Small Company, Technology, & Value Opportunity. There's a Fidelity Advisor Equity Income Fund, Invesco Dynamics and Health Sciences Funds, Janus Adviser Growth and Worldwide Funds, MFS Capital Opportunities Fund, Oppenheimer Capital Appreciation, Global, High Yield, and Main Street Growth & Income Funds, Pioneer Fund & Templeton Growth. I currently invest $500 a month, 300 in the Aetna Value Opportunity & 200 in the Aetna Index Large Cap. From a previous empoyer, I have balances in two TSAs,to which I can no longer contribute (it was for tax-exempt organizations only). One is a MetLife account, 60% in Fixed Growth & 40 in Stock Index (total amount is cuurently $48,800). The other TSA is a SunAmerica account and is split among 8 funds (including an equity index fund, bond fund, growth & equity funds) and that account totals just under $20,000.

This is really the extent of my retirement investing. I have some cd's and a savings account, but that's it. I'm 47 years old, so I have around 20 more years to work, & I don't mind some agressive investments.

I will check out the Morningstar Website & the Mutual Funds for Dummies books. Thanks, again.

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Author: bigcaat Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 30851 of 75381
Subject: Re: Index Accounts Date: 7/18/2001 9:51 PM
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Hi Lora,

My, quite a menagerie of funds, isn't it? I took a look at the two that you are actively contributing to...AVOIX and AELIX. I'm assuming that these are the ones, because they are the institutional shares. If that's the case, and your not in the loaded version of these funds, then you have funds with somewhat reasonable fees. (1.10% and .66% respectively.) AVOIX is classified by M* as a large blend fund, and seems to have done fairly well compared to it's catagory.
http://quicktake.morningstar.com/Fund/Snapshot.asp?Country=USA&Symbol=AVOIX

AELIX is also classified by M* as a large blend and seems to have flowed with the index, as it's name indicates.
http://quicktake.morningstar.com/Fund/Snapshot.asp?Country=USA&Symbol=AELIX&hsection=

My question is this. How much overlap do you have in these two funds...as well as the others you hold? You might want to check that out on the overlap tool at www.maxfunds.com.

The other thing is that you say your employer doesn't match your contributions? Are you eligible for a traditional, or better yet, a Roth IRA? If so, how about opening up something like that at someplace like Vanguard or TIAA-CREF (low-expense ratio fund companies) once you determine your holdings and your asset allocation plan? Just a thought.

Good Luck,
Caat

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