No. of Recommendations: 1
The article the link goes to is differnet than the one I think you are referring to (discusses investing in most agressive stocks in an IRA).

MF recommends investing in an S & P fund because the fund cost is low and you get diversification even with a small investment. They also recommend investing in individual stock.

The Money article also recommends investing in large cap stocks. The difference is that the article suggests investing in aggressive growth too (with a smaller portion of your savings). You may or may not agree depending on your personal situation.

The article advises you to put your most volatile investments in an IRA because you don't have to pay taxes every time something is bought and sold. If you buy stocks or funds outside of tax shelters like IRAs, you pay taxes every time someone buys and sells something. So it makes since to put your investments that have a high turnover ratio annually, or that you plan to buy and sell often, into these funds.

Personally, I don't think that agressive growth small cap funds are the way to go, but that is based on my own analysis of the market and my own goals. I think that for the next few years value will trump growth in this sector overall (not to say there aren't some great small cap growth sector funds or individual stocks). But if I were to buy a small cap fund, and also invest in an S&P fund, I would make sure all my small cap $ went in my IRA to avoid a potentially big annual tax bite, since it woudl have more turnover. I would not put an individual stock that I planned to hold for 20 years in an IRA though (no taxes till you sell or dividends are paid). Hope this helps!
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