UnThreaded | Threaded | Whole Thread (9) | Ignore Thread Prev | Next
Author: rookieJoe Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76235  
Subject: Re: Roth IRA Questions Date: 1/6/2005 6:23 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
So if I bought $3000 worth of VEXMX and $3000 worth of VXF and did nothing else for say 10 years, I could expect each to be worth about the same

There is another caveat to keep in mind.

With mutual funds you can have the dividends automatically invested. With ETFs, that depends on your broker. I recently asked Scottrade about dividend reinvestment on ETF – they don't do it. (I know Ameritrade does whole share reinvestment on stocks for free, I haven't asked about ETFs).

That means if you buy an ETF at Scottrade, the dividends will give you small amounts of cash (probably just a few percent per year depending on what you get). When you're starting out, the dividends on $3k aren't that much. It won't be cost effective to pay the commission to reinvest your dividends yourself for a few years...

As long as you keep making annual contributions, your dividend cash would never sit idle for more than a year, and won't make much difference.

If you don't make regular contributions, mutual funds might be better for small purchases.

-Joe
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (9) | Ignore Thread Prev | Next

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Post of the Day:
Macro Economics

Heads Up, Real Estate Investors
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement