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Author: galenc Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76418  
Subject: vanguard index fund Date: 9/22/1999 12:54 PM
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Anybody have any good or bad to say about starting an IRA with Vanguard index 500 or any other Vanguard fund?
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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13998 of 76418
Subject: Re: vanguard index fund Date: 9/22/1999 1:26 PM
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Vanguard index 500 fund is very highly regarded by Fools. It is an especially low expense ratio fund. However, Vanguard does in some cases impose transaction charges and account maintanence fees on small accounts. If your account balance is under $10K, other index funds could be more cost effective for you.

For additional thoughts, try a search on the word Vanguard.

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Author: Selphiras Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 14003 of 76418
Subject: Re: vanguard index fund Date: 9/22/1999 2:44 PM
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Paul said Vanguard index 500 fund is very highly regarded by Fools. It is an
especially low expense ratio fund. However, Vanguard does in some
cases impose transaction charges and account maintanence fees on
small accounts. If your account balance is under $10K, other index
funds could be more cost effective for you.


I was under the impression that Vanguard was recommended right from the start of investing, when someone would have often a lot less than $10k. I thought I'd even heard it mentioned as a fund to use until you had enough to buy into the Foolish Four. Do others agree that it's fees are too high for less than 10k? I was planning on buying into it in the next year or so starting with just a few hundred a month.

Selphiras

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Author: joelmore One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 14013 of 76418
Subject: Re: vanguard index fund Date: 9/22/1999 5:28 PM
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According to the April 30, 1999 prospectus, there is a $2.50 per quarter account maintenance fee charged on Vanguard 500 Index Fund accounts under $10,000. The prospectus goes on to note "The account maintenance fee will be deducted from your quarterly distribution of the Fund's dividends. If your distribution is less than the fee, fractional shares will be automatically redeemded to make up the difference."

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Author: jnichols427 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 14014 of 76418
Subject: Re: vanguard index fund Date: 9/22/1999 5:29 PM
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I just opened a Roth IRA with Vanguard. The fee is only $10 a year for accounts under $10k. You can start an IRA with a minimum balance of $1000. They will let you pay the fee up front so you can contribute the full $2000 each year. They will even send you postage paid envelopes for deposits. As mentioned before they have Very low expense ratios.

Hope this helps.


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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 14018 of 76418
Subject: Re: vanguard index fund Date: 9/23/1999 9:29 AM
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Lets remember that $10 is 1% of $1000, and if you pay transaction fees on top of that, costs tend to be up there.

I do not know if others offer less costly accounts. Just keep an eye on those expenses.

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Author: Selphiras Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 14024 of 76418
Subject: Re: vanguard index fund Date: 9/23/1999 1:39 PM
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But $10/year is fairly typically for IRA account fees. At least, I pay that on the others I have.

Selphiras

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Author: galenc Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 14073 of 76418
Subject: Re: vanguard index fund Date: 9/27/1999 12:44 PM
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Hi, I am the author and wanted to thank you for your response, however, I'm looking at my current Mutual fund account which is over $70,000. Should I diversify between Vanguard and Foolish four? If so, what percent would you recommend? Any other suggestions for that amount. I'm 50 and want to grow the "nest egg".

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Author: BGPenhollo Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 14241 of 76418
Subject: Re: vanguard index fund Date: 10/5/1999 2:08 PM
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"But $10/year is fairly typically for IRA account fees. At least, I pay that on the others I have."

The idea is not that $10 is a high fee but in relationship to $1,000 investment it's 1%.

The point is that it may be better to select very few Mutual Funds for an IRA because each fund may charge $10 or so in fees. Thus 5 funds with $1,000 each will generate $50 in IRA fees or 1% whereas one fund with $5,000 may charge a $10 IRA fee or 0.2% in IRA fees.

While diversity is suppose to help reduce risk - too much diversity can reduce returns by increased individual IRA fees.

BGP



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