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Author: ObliqueApproach Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76115  
Subject: Re: After meeting with a Financial Advisor Date: 10/6/2003 9:00 PM
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Since I'm not going to buy separate stocks, does it make sense to open a Non-retirement account in any of the mentioned funds? I intend to open a RothIRA this year and contribute $3,000 in it. But I will still have some extra money (another $3k-$5k) to invest and I would like to do that. When people open Non-retirement accounts, do they follow the same logics as with Retirement accounts, that is look for no-load funds, buy and hold long-term, etc.? Which makes more sense: opening an account within a fund, sell it if I don't like it and invest with another mutual fund OR open an account at Scottrade and when I don't like one mutual fund I just transfer the money to another mutual fund of a different company?

An IRA is just a wrapper that transforms your investment into something that grows tax-free. Thus, if you think you would otherwise have dividends or capital gains distributions in your investment it is best to put that into an IRA instead of a regular account. Other than that, your investment should be dictated by your time horizon. If the taxable side of your portfolio is for a long term time horizon, like retirement, then you can invest it in the same way as the tax-free side if you wish.

You should be aware of fund supermarkets, which are accessible through your brokerage account. If I were interested in Fidelity funds, for example, and other funds, I would put the account with the brokerage side, not a specific fund account. Many fund companies participate free of charge (check the broker for details) in the supermarkets, though for cost reasons Vanguard doesn't participate in these places (for free at least).

However, if you plan to index but still want additional flexibility, you can also use one of the many exchange traded funds (SPY for the SP500, for example) in a brokerage account, which is just like buying a stock (and you should figure out how much the brokerage commission adds to the purchase before doing this). Alternatively, you can use Vanguard directly. Again, if you plan to index, you probably won't be doing any shifting anyway.

There is no "exact" answer here. You can do pretty much anything you please.
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