Author Topic: Created first IRA with Vanguard. Which stocks to choose?  (Read 606 times)

degrom7

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Created first IRA with Vanguard. Which stocks to choose?
« on: September 25, 2018, 04:08:43 PM »
After reading this blog, I've decided to create a Vanguard IRA account. I have $2,000 funded so far and will add in the remaining $3,500 before the tax deadline. My wife will do the same as me. We From looking at the previous topics and from MMM's articles, he used to recommend VFINX but now it's VTSAX or VTSMX? I'm not sure if I should focus on the investor share or the ETF. I know there's a minimum of $3,000 for investor shares and if it's pass $10,000 I can change it to Admiral Shares. This will happen after I add another $5,500 in 2019. For now with $2,000 in my account and once I fund the account with the max of $5,500, what do you recommend? I plan to put buy and hold for the long term since I'm in my early 30's.

Another question. Is it possible to combine mine and my wife into 1 IRA so I can have the max contribution of $11,000? Then I can get admiral shares right away?

Thanks everyone!

seattlecyclone

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Re: Created first IRA with Vanguard. Which stocks to choose?
« Reply #1 on: September 25, 2018, 04:28:18 PM »
Don't sweat the difference between Admiral and Investor shares, especially if you plan to upgrade to Admiral at the beginning of 2019.

VTSAX and VTSMX differ by 0.10% in their fees. For a $5,500 investment over six months the extra fees from the Investor shares add up to a whopping $2.75.

You may not combine IRAs with your living wife. They're called Individual Retirement Arrangements, after all.

degrom7

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Re: Created first IRA with Vanguard. Which stocks to choose?
« Reply #2 on: September 25, 2018, 04:34:58 PM »
Don't sweat the difference between Admiral and Investor shares, especially if you plan to upgrade to Admiral at the beginning of 2019.

VTSAX and VTSMX differ by 0.10% in their fees. For a $5,500 investment over six months the extra fees from the Investor shares add up to a whopping $2.75.
Thanks! I see that the ETF (VTI) has the same expense ratio (0.04) as VTSAX. How do you feel about VTI?

You may not combine IRAs with your living wife. They're called Individual Retirement Arrangements, after all.

seattlecyclone

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Re: Created first IRA with Vanguard. Which stocks to choose?
« Reply #3 on: September 25, 2018, 04:38:15 PM »
The mutual fund vs. ETF debate has played out many times on this forum. There's not much real difference. Pick whichever you like best. I go with mutual funds because you don't need to put in an order while the market is open, and you can invest your full cash balance rather than buying a whole number of shares.